Corteva, Inc.

simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one 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 2025 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, Judd O'Connor, 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 included 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 releases 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. Before we get into our solid third quarter results, I'd like to address our October 1st announcement on our intent to separate into two public companies. This proactive strategic decision is rooted in our belief that separating our seed and crop protection businesses now allows both to be better positioned to achieve their maximum long-term growth potential in the future. Bringing these businesses together six years ago was undoubtedly the right thing to do, as demonstrated by our strong track record, including this most recent quarter. We have clearly been among the market leaders, but we have an obligation to look ahead. past the short term, and ensure both companies are able to pursue their distinct opportunities to the fullest extent. So it's not that we believe things aren't going well today. They are. It's that we believe things could be even better in the future as two separate companies. It's really that straightforward. As we said last month, the seed genetics landscape is changing due to new technologies like gene editing and artificial intelligence. which opens new markets and opportunities for companies with scalable ag science capabilities. At the same time, rising pest and disease pressures and changing weather patterns have driven a shift from single to multiple modes of action in crop protection, including biological solutions. As a result, the market has gradually transitioned away from integrated proprietary models to more open source licensing with collaborations now driving innovation success. As a result, industry players are increasingly open to working together, which also allows them to share resources and reduce risk. And importantly, it allows us to get affordable top technologies into the hands of farmers. So we are looking ahead with excitement and optimism, comforted by the fact that both of these businesses are leaders in their markets today and will remain so in the future. It's early days, but the process remains on schedule for a second half 2026 separation. Our board has initiated a global CEO search for new Corteva, and we will provide updates on the separation along the way. But our goal right now is to deliver a strong 2025 and 2026. So let's now move to our current financial performance. Our results for the third quarter were largely in line with our own expectations. with the exception of outperformance on our controllables and strong early safrinha seed demand in Brazil. Operationally, we continue to execute well with double digit operating EBITDA gains in both businesses. And we're now expecting to deliver over 600 million in controllable benefits this year, a notable improvement from our prior estimate of 530 million. In fact, this year's nine month earnings performance is already ahead of full year 2024. Our seed business is performing well again this year, including $200 million of productivity and deflation benefits, as well as $90 million in royalty improvement, reflecting our leading position in North America corn and progress in soybean out licensing in Brazil. Importantly, we now expect to cross double digit trade penetration for Conquesta next year in Brazil. largest soybean market on the planet capturing price for value in most regions as well as meaningful share gains in north america is a testament to the high return on investment our technologies provide to farmers in 2026 we will roll out several hundred new hybrids and varieties around the world once again helping farmers increase yield and productivity finally let me remind you that seed is the only crop input that gets better and better every year allowing the farmer a solid return on their investment. The crop protection business has also delivered solid earnings and margin growth so far this year. Led by demand for our differentiated technology, we are expecting full-year EBITDA to be up high single digits this year. We continue to see volume gains, and we remain committed to our strategy of focusing on differentiated and new technologies which carry a premium in the market. Today we're also announcing a brand name for our new next-gen insecticide active, Varpelgo, for chewing pests in fruits and vegetables, row crops, and rice. Expected to launch in the early 2030s and cross $750 million in revenues at its peak, this represents the latest addition to the Corteva portfolio of trusted crop protection active ingredients inspired by nature and globally recognized for their more environmentally friendly profiles. Included in our $9 billion crop protection technology pipeline are billion-dollar product families and biologicals and all three chemistry indications, as well as what we view to be a significant value unlock in our seed applied technologies business as a result of the separation. And like seed, our crop protection business is generating substantial value through its focus on controllables, which drove over $250 million of benefits in the first nine months of the year. From an industry perspective, the overall ag market fundamentals remain mixed. We're still seeing record demand for food and fuel, and major crop inventories are within normal ranges despite large crops in Brazil and North America. Farmers continue to prioritize top tier seed technologies while managing tighter margins. In the crop protection market, although we continue to experience competitive pricing dynamics, in some major markets, underlying farmer demand in terms of applications remain on track with historical levels. In other words, when farmers have crop problems, they spray with the best solution they can find. So what does all this mean for the remainder of the year? We are raising our full year operating EBITDA range to 3.8 to 3.9 billion, which at the midpoint translates to 14% growth versus the prior year. This update reflects growth of our new technologies, our outperformance on controllable levers, a more favorable currency impact, and our latest expectations on our fourth quarter performance in Brazil. One quick note. We look at our business by halves, not quarters. It's one reason why we don't provide quarterly guidance. Farmers plan their purchases and business by halves. and weather or other uncontrollable factors often move orders, sales, and shipping between quarters. Looking at this year, the halves really do tell a story. In the first half of this year, our operating EBITDA was up 14%, while our second half is expected to be up 17%, both really strong performances. On full-year EBITDA margin, we're now expecting improvement of over 160 basis points. and a solid step towards our goal of 24% at the midpoint by 2027. A quick reminder, when Corteva launched in 2019, our margins were below 15%. Finally, it's also important to note that we're still expecting a free cash flow conversion rate in the range of 50% for the year, as well as a billion in share repurchases this year. Now, let's move to the first look at how we're thinking about 2026. From a macro perspective, we're anticipating a continuation of record demand for grains, 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 seed selection is particularly critical and is nondiscretionary when compared to other crop inputs. Given the high corn area in the U.S. this year, It's logical to assume we'll see a couple million acres shift back to soybeans in 2026. With the overhang of global trade uncertainty, it would be premature to discuss how large a shift might be, but we do not consider it to be disruptive to our planning assumptions, given our market leading position on both crops now. Global trade discussions remain dynamic. However, last week, China committed to buying 12 million metric tons of soybeans this season. followed by at least 25 million metric tons per year for the next three years. We will continue to monitor the situation, but this should be welcome news for US farmers. Perhaps most notable is that we are now expecting low single digit growth in the crop protection industry, including high single digit growth in biologicals. This would be a good first step in the overall return to a healthy CP market. With the exception of Latin America, where we expect competitive pressure to keep prices flat to modestly down, we see overall CP market pricing stabilizing in 2026. Turning back to Corteva, what continues to set us apart is the strength of our portfolio, the continued focus on execution, and increased investment in innovation. The introduction of hundreds of new products is expected to continue to drive solid returns for farmers and thus a premium in the market and contribute to our volume growth. We're also expecting a continuation of sizable productivity benefits in both businesses, a defining characteristic of our margin enhancement journey. Overall, when considering the market backdrop in 2026, as well as the growth opportunities we have in motion, We're currently anticipating full-year operating EBITDA in the range of $4.1 billion, which translates to mid-single-digit growth year-over-year, and we'll provide a more detailed view in early February when we issue formal guidance. Let me wrap up by saying that we've built a foundation of strength that gives us the ability to shape the next chapter of value creation on our own terms. Our intended separation is about sharpening focus accelerating innovation, and unlocking value that's been earned through performance. And we are committed to delivering results like this past quarter throughout this transition period. And with that, let me turn it over to David.