Corteva, Inc.

Good day and welcome to the Corteva fourth quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jeff Rudolph, Vice President of Investor Relations. Please go ahead, sir.

Good morning and welcome to Corteva's fourth quarter 2021 earnings conference call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer, and Dave Anderson, Executive Vice President and Chief Financial Officer. Additionally, Tim Glenn, Executive Vice President and Chief Commercial Officer, and Rajan Gajaria, Executive Vice President of Business Platforms, will join the Q&A session. We have prepared presentation slides to supplement our remarks 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, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including but not limited to those discussed on this call and in the risk factor section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statement. Please note in today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press release and related schedules, along with our supplemental financial summary slide deck. available on our investor relations website. It is now my pleasure to turn the call over to Chuck.

Thanks, Jeff. Good morning, everyone, and thank you for joining us on the call and webcast today. Corteva executed well in 2021 as ag fundamentals drove strong customer demand. For the full year, the company delivered double-digit sales and earnings growth, meaningful margin expansion, and improved free cash flow. This included impressive performance out of Latin America, where the team delivered 27% organic growth on double-digit volume and price gains. In addition, we continued to advance our technology pipeline, where Enlist E3 soybeans reached 35% market penetration in the U.S., and new product sales and crop protection reached over $1.4 billion in total, an increase of more than 40% over the prior year. Our capital deployment, We returned more than $1.3 billion to shareholders via dividends and share repurchases for the year. This past year was certainly not without its challenges, including a dynamic operating environment that impacted most global industries and manifested as supply chain disruptions, raw material and labor shortages, and cost inflation. At the same time, the agricultural industry experienced significant demand for grain and oilseeds that easily outpaced supply, supporting crop prices and farmer income levels. Again, our teams executed very well in this environment. Turning to the outlook, we entered 2022 from a position of strength and looked to carry forward our execution with best-in-class technologies to deliver value for growers and Corteva. This is overlaid against a market backdrop where solid ag fundamentals will drive customer demand and challenges from supply chain disruptions and inflation will persist. As a result, we expect to deliver 8% sales growth and between $2.8 and $3 billion in operating EBITDA for the year. Our priorities for 2022 are straightforward. We are going to focus on what we can control and execute on a balanced plan that is expected to deliver both growth and margin expansion. This includes continuing the penetration of new and differentiated products globally, capturing price aligned with the value of our products created for our customers, and delivering on cost reduction initiatives. In order to achieve our full performance potential, we have begun a fresh look at various ways to unlock value at a faster pace, including our global product portfolio and operational footprint. I look forward to sharing more of these reviews as we progress this work. As I've shared with many of you already, I am very pleased with Corteva's balance sheet and cash flow potential. We have the financial strength to execute on a disciplined capital allocation strategy, and we'll focus on funding high margin growth opportunities and returning capital to shareholders. Now let's go to slide five, where I will provide a bit more detail on the market outlook, and some of our assumptions for 2022. Similar to 2021, agricultural demand remains solid as economies around the globe continue to recover from COVID-related shutdowns. This is expected to drive record demand for grains and oilseeds in 2022, which we believe will keep commodity prices at the elevated levels we are seeing in the market today. Over the medium to long term, we see constructive fundamentals continuing as possible new demand to support renewable fuels such as bio-based diesel will likely support healthy agricultural commodity price levels. Production will be vital in 2022 to balance supply and demand. For the U.S., planted area is expected to be 90 million acres for both corn and soybeans. Given the current relative economics of commodity prices, our assumption reflects some shift from corn into soybeans. as fertilizer prices remain high and some growers may be inclined to rotate into beans. This provides further support for systems like Enlist, where customer demand and industry-wide penetration remains strong, and we anticipate it will grow to at least 40% of total U.S. soybean acres in 2022. Current weather conditions in Latin America remain something we continue to monitor given the potential for risks around production and grower planting decisions. That said, Brazil continues to be a very attractive market for growth and Corteva has an increasing market position given our portfolio and farmer relationships. Planted area in Brazil for the 2022-2023 season is expected to increase mid-single digits and growers will remain focused on best-in-class technology in both seed and crop protection to drive yields and maximize profit in this market. Growers' balance sheets and income levels are healthy, and we believe that customers will look to prioritize technology for 2022 to maximize return, even with higher input costs across their operations. And lastly, on inflation, we do expect raw material and labor costs to continue to increase in 2022. However, we are confident that our global pricing execution will keep pace and more than offset inflation for this year. And with that, let me turn it over to Dave to provide details on our full year 2021 performance and our guidance for 2022.