Corteva, Inc.

Please stand by. We're about to begin. Good day and welcome to the Corteva Q1 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Megan Britt. Please go ahead, ma'am.

Thank you. Good morning and welcome to the first quarter 2020 earnings conference call for Corteva. I'm pleased to be joined today by Jim Collins, Chief Executive Officer, Tim Glenn, Executive Vice President and Chief Commercial Officer, Rajan Gajadia, Executive Vice President of Business Platforms, and Greg Friedman, Executive Vice President and Chief Financial Officer. We have prepared presentation slides to supplement our comments during this call, which are posted on the Investor Relations section of the Corteva website and through the link to our webcast. During this call, we will make forward-looking statements regarding our expectations for the future. Slides 2 and 3 of our earnings release contain our forward-looking statement disclaimers. All statements that address expectations or projections about the future are forward-looking statements. These statements reflect our current expectations but are not guarantees of future performance and are subject to risk and uncertainty regarding assumptions. Our SAC filings provide discussion of some of the factors that could cause material differences in our actual results. We provide a pro forma basis discussion in our earnings relief and slides. Unless otherwise specified, all historical financial measures presented today exclude significant items, which can be found in the schedules that accompany our earnings relief. We will also refer to non-GAAP measures. Our reconciliation to the most directly comparable GAAP financial measure where available is provided in our earnings release and on our website. It is now my pleasure to turn the call over to Jim.

Thank you, Megan, and thank you and welcome to participants that are joining this call. Before turning to our normal financial and strategic reporting for the quarter, I wanted to share some thoughts on our current situation. Every member of our global team has been tasked to overcome new challenges due to the global health crisis caused by COVID-19. I am completely in awe of how agile and resilient our team has been through this crisis, and I'm inspired by how we have leveraged our collective strengths to support our customers and our communities. One of our defining values is to live safely. Our crisis response started with ensuring the safety and security of our global team. In January, we activated a comprehensive crisis management effort and by mid-March, set new policies taking more than 50% of our organization to a work-from-home model, canceling travel and in-person meetings, ensuring our essential site personnel and field teams were properly equipped, and taking active strides to support every employee. I'm exceptionally proud of the resiliency of our organization, and I'm committed to keeping our team healthy, motivated, and intact. From a business continuity standpoint, as a reflection of our critical role in the global food supply, our operations were deemed essential. We leveraged our historical investments in supply chain resiliency and regional production assets to ensure that we could provide reliable product supply for our customers by quickly pivoting to alternative supply sources when disruptions emerged. To ensure the health and safety of our customers, We have migrated many field sales and agronomic service activities, normally done in person, to virtual or remote means and have quickly installed contactless procedures to facilitate our physical product deliveries. We are leaning harder on the digital sales enablement tools that we have in place, taking greater leverage on investments made in those capabilities in the past. Finally, we are proactively seeking opportunities to partner with society to devise solutions to mitigate the impacts of this crisis and facilitate a global restart. We are taking actions locally in communities where we operate to provide support in ways that underpin food security. We are also ready to put our innovation assets to work to become part of the solution to this crisis. Most recently, we announced our partnership with the MercyOne hospital system in Iowa to perform COVID-19 testing. We have some of the most advanced genetic sequencing capabilities in the world and are leveraging those assets to support our communities. We've responded aggressively to this current situation. As a result of our combined actions, I am confident that our team, our operations, and our communities will emerge stronger from this crisis. So moving to slide five, we show our key performance indicators for the quarter. Net sales on a reported basis increased 16% versus the prior year. Improvement was driven by early seed demand in North America and Europe, favorable weather, and strong operational execution. Currency, particularly in Brazil and Europe, was a 3% headwind. Portfolio represents a 1% hit in the quarter. On an organic basis, net sales increased 20%. with double-digit increases in both reporting segments and across all regions. In seed, organic sales were up 27% on early demand from favorable weather, the anticipated North American acreage rebound, and improved price, demonstrating the strength of our pipeline, particularly our Chrome and PowerCore Ultra corn products. In crop protection, organic sales increased 10%, supported by continued growth in new products, notably Aralex herbicide and Isoclast insecticide. Operating EBITDA increased 53%, and operating EBITDA margin improved more than 450 basis points for the quarter. In seed, price and volume gains in North America and Europe drove margin expansion. In crop protection, new product sales and merger cost synergies and productivity improvements contributed to gains. SG&A as a percent of net sales decreased by approximately 260 basis points in the quarter. RD costs declined 6%. These improvements reflect the benefit of cost synergies, productivity, and ongoing efforts to drive spending efficiencies. Overall, these indicators show building market momentum for our new products supported by strong regional execution that capitalized on favorable weather conditions and a resilient supply chain to overcome challenges related to COVID-19. We delivered on our cost synergy commitments and intensified our productivity and spending actions to create operating EBITDA expansion in the quarter. Now, we made substantial progress delivering on our strategy. I want to underscore that our performance during this period demonstrates operational excellence, resiliency, and our capacity to adapt and deliver. Slide six outlines our five priorities for shareholder value creation, and we made progress on each of these. From a cultural standpoint, we have increased our focus on instilling an owner mindset to reduce spending and support cash preservation. Now we are taking additional decisive and prudent actions like delaying non-essential hiring and dramatically reducing spending to drive further operating leverage. Additionally, we are also focused on working capital management as a driver of cash preservation and have a cross-functional cash action team in place. Diligence on costs and cash will reinforce our inherent operational defensiveness during this crisis. We are also working on taking additional organizational actions to assure we restart strong. Notably, we recently announced two key executive changes. Dr. Sam Eppington has been named as our Senior Vice President and Chief Technology Officer, succeeding Neil Gutterson following his announced retirement. Sam will lead our global R&D organization. Anne Alonzo has been named our Senior Vice President of External Affairs and Chief Sustainability Officer and is filling an open role. that will help us further our sustainability agenda. We are excited to have these talented leaders join the Corteva family. Moving to capital allocation, I'll highlight some actions that we have taken that positively impact our balance sheet. We have a strong balance sheet and liquidity position, which includes $6 billion in credit facilities and approximately $2 billion in cash and cash equivalents. We are evaluating further cost-effective approaches to both strengthen our liquidity and to address our longer-term funding requirements associated with our primary U.S. pension plan. In terms of returning cash to shareholders, we recently declared our second quarterly dividend for the year of 13 cents per share. We have also acted on share repurchases this quarter with approximately $50 million repurchased. On our priority related to developing innovative solutions, Corteva recently announced the first product registrations for Innotrack active in Europe, which adds to a series of early registrations. The favorable environmental profile of our newest technologies is helping to accelerate the speed of new crop protection product introductions to the market. In seed, increased adoption of new technology, including Chrome and PowerCore Ultra, enabled Corteva to gain momentum in North America and Latin America despite a competitive and challenging environment. On our priority around best-in-class cost structure, we delivered approximately $70 million in cost synergies in the quarter and remain on track to deliver $230 million in combined merger cost synergies and productivity savings by the end of the year. This was a large contributor to the over 450 basis point margin expansion in the quarter. Finally, on above-market growth, in the quarter, Pioneer seed corn deliveries were up approximately 60% versus the same period last year, and corn price was up 4% globally. Both are strong indicators of our market momentum. I'll now hand the call over to Tim to provide some details on our commercial performance.