Corteva, Inc.

Thank you for standing by. My name is Ron and I will be conference operator today. At this time, I would like to welcome everyone to the Corteva AgriScience third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would 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 your question, press star 1 again. Thank you. I would now like to turn the call over to Kim Booth, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Corteva's third quarter 2024 earnings conference call. Our prepared remarks today will be led by Chuck Magro, Chief Executive Officer, and David Johnson, 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 factor 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. Corteva's results for the third quarter were largely in line with our expectations. Despite the fact that we had an operating loss in the quarter, We continue to execute well and are on track to deliver over 400 million of savings from our controllables this year. The crop protection business delivered earnings and margin growth led by demand for our differentiated technology, along with deflation benefits that have just begun. Today, we're also providing a first look at 2025. We are expecting to return to double digit earnings growth, which is largely driven by factors in our control. What continues to set us apart is the strength and leverage of our portfolio, the continued focus on execution and increased investment in innovation. In what has historically been our smallest quarter due to seed seasonality, we were still able to deliver over 160 million in controllable benefits. Our ability to pull multiple levers to improve overall performance makes us resilient when faced with variables not entirely in our control. including the ongoing crop protection market dynamics and acreage loss from Argentina corn stunt. Overall, the seed business is delivering a strong performance in 2024. From operational excellence perspective, the business drove approximately $175 million in controllable benefits on a year-to-date basis, including royalty improvement and productivity. Our seed business is also set up for continued growth with our pipeline of technology and pricing gains in most regions, as well as notable share gains in North America are a testament to the value our technologies provide to farmers. And for 2025, we will roll out several hundred new hybrids and varieties around the world. This is helping farmers increase yield and productivity when they need it the most. On the crop protection side, we're happy to see a second consecutive quarter of volume gains, as well as notable operating EBITDA growth, margin improvement, and the first meaningful tranche of deflation benefits in the third quarter. We remain committed to our strategy of focusing on differentiated and new technologies, which warrant a premium in the market. On a year-to-date basis, we received over 150 crop protection registration approvals spanning 25 active ingredients in almost 50 countries. And like seed, our CP business is generating substantial value through its focus on controllables. which drove approximately 170 million of benefits in the first nine months of the year. Overall, the ag markets remain mixed. We're still seeing record demand for food and fuel. Farmers continue to prioritize top tier seed technologies while managing tighter margins. And the crop protection market has turned the corner in every major market except Brazil, where we are early in the season. It's important to note that underlying farmer demand in terms of applications remains on track with historical levels. However, we continue to experience competitive market dynamics and expect that to continue into next year. So what does all this mean for the remainder of the year? We are updating our full year operating EBITDA range to 3.4 billion at the midpoint to reflect the impact of the current Latin America market conditions that will carry through to our full year results. However, we are still positioned to achieve approximately 20% for full year EBITDA margin. This adjustment reflects the latest market realities in Latin America, including expectations for an approximate 20% year over year reduction in Argentina's corn planted area due to corn stunt. It is fair to say that our full year estimates are assuming a big fourth quarter in Brazil, but this is something we've done before. It's also important to note that we remain committed to free cash flow in the range of 1.5 to 2 billion for the year, as well as a billion in share repurchases. Today, we'd also like to provide a first look at how we're thinking about 2025. We'll provide official guidance in early February, but we wanted to give some insights prior to Investor Day. From a macro perspective, we're anticipating a continuation of record demand for grain, oilseeds, meat, and biofuels. On-farm demand is expected to remain steady, and farmers will continue to prioritize top-tier technologies in order to maximize their yields. A farmer's seed selection is particularly critical and is non-discretionary when compared to other crop inputs. In terms of U.S. planted area assumptions, Total area planted by farmers in 2025 is expected to be nearly flat year over year. It is too early to say too much about Latin America for next year since farmers are in the fields right now planting the 24-25 crop in Brazil, which at this time is looking like a mid single digit increase for both corn and soybeans. Finally, it's too early to forecast a recovery for corn planted area in Argentina in the 25 crop year, until we see how the current season plays out. Our current view of the crop protection industry is a flattish 2025. It's a dynamic situation that we're monitoring daily, but all major markets are functioning normally except for Brazil, where as I've said, it's early in the season. Brazil remains an attractive market given it is the only geography in the world that is able to materially increase planted area for corn and soybeans. Farmer economic and agronomic benefits incentivize Brazilian soybean farmers to continue to plant corn in rotation. The strategic moves we've made, including investments in biologicals and tilting our portfolio towards differentiated technology, will allow our crop protection business to grow in 2025. When combined with sizable incremental benefits from our controllable levers, an increase in research and development investment, and a significant currency headwind, we're anticipating double digit operating EBITDA growth. So high level, although our top line and bottom line expectations have been impacted by the crop protection industry, our seed business has remained largely on plan, and we are expecting to achieve our enterprise goal of 21 to 23% EBITDA margins by 2025. We still have a lot of work to do, but the setup is looking good for 2025. And with that, let me turn it over to David Johnson to review our financial performance. As you know, David joined Corteva just under two months ago and has really hit the ground running as our CFO. I'm happy to have him on our leadership team and I'm impressed with how well he has immersed himself into the organization, which has allowed him, in very short order, to add valuable insights on our business and operations. David, over to you.