Corteva, Inc.

After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw yourself from the queue, simply press star and one. I will now turn the call over to Kim Booth, Vice President of Investor Relations. You may begin.

Good morning and welcome to Corteva's second quarter and first half 2024 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, Seed Business Unit, and Robert King, Executive Vice President, Crop Protection Business Unit, 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 factors section of our reports filed with the SEC. We do not undertake any duty to update any forward-looking statements. 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's now my pleasure to turn the call over to Chuck.

Thanks, Kim. Good morning, everyone, and thanks for joining us. We plan to update you today on our second quarter and first half performance, share our latest expectations for the second half of this year. In the second quarter, Corteva delivered both top and bottom line growth in nearly 250 basis points of operating at the margin expansion. This was driven by strong demand for our proprietary technology, which was also particularly evident in our seed business results. We also saw crop protection volumes grow, a sign that the industry is starting to stabilize. after almost two years of decline. Seed continued its impressive trajectory in the first half of the year with 420 basis points of operating EBITDA margin expansion and broad-based pricing gains across all regions. While North America corn acres are down year over year, the team has managed to hold volumes relatively flat and gain share in the first half, a testament to both strong demand for our latest corn hybrids as well as the strength of the pioneer business model. Performance in seed remains strong across products and technologies, and we are proud to be number one in the North America seed market for both corn and soybeans. We are particularly pleased to see E3 continue to be valued by farmers, and we believe E3 technology is the future. It is on at least 65% of U.S. soybean acres in 2024. Earlier this year, we announced the commercial availability of Pioneer brand Z-series soybeans in the US and Canada, which is the next generation of industry leading genetics with the Enlist trait. This new class of soybeans offers farmers a strong defensive package with a generational leap in yield potential and agronomic performance over any soybean lineup Pioneer has ever introduced. In extensive 2023 impact trials, Z-series soybeans showed an average yield advantage of 2.7 bushels per acre over our own A series soybeans, which delivers substantial economic benefit to growers. And I know most of you are well aware of how the Enlist transition has supported our aim of becoming royalty neutral by the end of the decade. But it's worth noting that our royalty income stream is also accelerating quickly in corn. In the first half of this year, we grew our royalty income by an impressive 40% when compared to the same period last year led by the strength of new corn trade technologies like PowerCore and List. Our strategy of becoming a technology seller is gaining traction as reflected in our margins. Turning to the CP business, we can say that here too, our technology remains a driver for farmers. By the end of June, we had registered over 100 new crop protection products globally. These new product registrations give farmers access to new cutting-edge solutions that can help them increase yields and grow more food and fuel. Overall, the crop protection business continues to navigate an imbalanced market driven largely by residual destocking and competitive market dynamics. Still, we are encouraged by the 6% volume improvement in the second quarter. Although net sales and operating EBITDA were down for the half, we're still anticipating that 2024 will be another year of top and bottom line growth and margin improvement for Corteva. Record-setting demand for grain, oilseeds, and biofuels is expected to continue through the end of 2024. On-farm crop protection demand remains stable. as farmers prioritize technology to maximize yield, and we expect the market to begin to move towards more of a balance between sell in and sell out at the channel. We also anticipate that farmers will continue to prioritize investments in top tier seed technologies, given their direct impact on yields. To reflect the impact of the competitive market dynamics and weather driven missed applications in North America and Europe in the first half for crop protection, We are lowering our full year net sales guidance by about 1% in operating EBITDA by about 2% versus the midpoints we guided to last quarter. A few comments on 2025. It's still early, and we need to see how the full year of 2024 plays out. Generally speaking, we remain constructive on 2025, and we are on a path that would get us into the framework for operating EBITDA and margin improvement. We feel good about what we can control delivering meaningful royalty benefits, productivity, and cost deflation on a year-over-year basis. Recall when we adjusted the 2025 framework back in February, we indicated that it was contingent upon stabilization in the crop protection market in 2024 and a return to growth in 2025. The volume improvement in the second quarter has given us some optimism in our second half growth assumption but we're monitoring the competitive pricing environment very closely. We'll be providing more of a detailed update on our views of 2025 at our investor day event in November. Now turning to the outlook. The US crop mix shift from corn to soybeans played out as we expected. However, the main feature of 2024 growing season thus far has been the US corn and soybean crop condition ratings have been running well above 2023. creating an expectation for strong yields. Time will tell, but it is clear that strong yields are being dialed into the corn futures. As global stocks of major grains and oilseeds stabilize, commodity prices have started to come under pressure, indicative that we're now below mid-cycle pricing. These lower prices combined with higher interest rates have led farmers to tighten their operating approach. But there is still a lot of confidence with the vast majority of farmers, and they know the formula for success and how to be prudent with the investment decisions they make in their operations. And they know they have to drive productivity in order to be competitive in the marketplace. Brand trust and the years of experience and expertise behind it is also extremely important. Farmers can always find cheaper seed, but with Corteva brands, they know they can trust our long history of incremental annual yield improvement, which gives them confidence in the outcome as well as peace of mind. And like most of us, once you experience the best, it's hard for farmers to settle for anything less. With that, let me turn it over to Dave for insights on our financial results and outlook.