Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Corteva, Inc. | a1231198kenr.htm |
| EX-99.2 - EX-99.2 - Corteva, Inc. | a123119enr.htm |
| EX-99.1 - EX-99.1 - Corteva, Inc. | q4fy19earningsreleasefin.htm |
DRAFT 4Q/FY 2019 Earnings Conference Call January 30, 2020 Insert Risk Classification
Safe Harbor Regarding Forward-Looking Statements Forward-Looking Statements This presentation contains certain estimates and forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva’s strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, as well as expected benefits from, the separation of Corteva from DuPont, are forward-looking statements. Forward-looking statements and other estimates are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements and other estimates also involve risks and uncertainties, many of which are beyond Corteva’s control. While the list of factors presented below is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements and other estimates. Consequences of material differences in results as compared with those anticipated in the forward-looking statements and other estimates could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Corteva’s business, results of operations and financial condition. Some of the important factors that could cause Corteva’s actual results to differ materially from those projected in any such forward-looking statements include: (i) effect of competition and consolidation in Corteva’s industry; (ii) failure to successfully develop and commercialize Corteva’s pipeline; (iii) failure to obtain or maintain the necessary regulatory approvals for some Corteva’s products; (iv) failure to enforce Corteva’s intellectual property rights or defend against intellectual property claims asserted by others; (v) effect of competition from manufacturers of generic products; (vi) impact of Corteva’s dependence on third parties with respect to certain of its raw materials or licenses and commercialization; (vii) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (viii) effect of the degree of public understanding and acceptance or perceived public acceptance of Corteva’s biotechnology and other agricultural products; (ix) effect of changes in agricultural and related policies of governments and international organizations; (x) effect of disruptions to Corteva’s supply chain, information technology or network systems; (xi) competitor’s establishment of an intermediary platform for distribution of Corteva’s products; (xii) effect of volatility in Corteva’s input costs; (xiii) failure to raise capital through the capital markets or short-term borrowings on terms acceptable to Corteva; (xiv) failure of Corteva’s customers to pay their debts to Corteva, including customer financing programs; (xv) failure to realize the anticipated benefits of the internal reorganizations taken by DowDuPont in connection with the spin-off of Corteva; (xvi) failure to benefit from significant cost synergies and risks related to the indemnification obligations of legacy DuPont liabilities in connection with the separation of Corteva; (xvii) increases in pension and other post-employment benefit plan funding obligations; (xviii) effect of compliance with environmental laws and requirements and adverse judgments on litigation; (xix) risks related to Corteva’s global operations; (xx) effect of climate change and unpredictable seasonal and weather factors; (xxi) effect of counterfeit products; (xxii) failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions; (xxiii) risks related to non-cash charges from the impairment of goodwill and intangible assets; and (xxiv) other risks related to Corteva’s Separation from DowDuPont. Additionally, there may be other risks and uncertainties that Corteva is unable to currently identify or that Corteva does not currently expect to have a material impact on its business. Where, in any forward-looking statement or other estimate, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Corteva’s management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Corteva disclaims and does not undertake any obligation to update or revise any forward-looking statement or other estimate, except as required by applicable law. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements or other estimates is included in the “Risk Factors” section of Exhibit 99.1 of Amendment No. 4 to Corteva’s Registration Statement on Form 10 and Corteva’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, as modified by subsequent reports on Forms 10-Q and 10-K and Current Reports on Form 8-K. 2
A Reminder About Non-GAAP Financial Measures and Pro Forma Financial Information Corteva Unaudited Pro Forma Financial Information In order to provide the most meaningful comparison of results of operations, supplemental unaudited pro forma financial information for the first quarter of 2019 and prior has been included in this presentation. This presentation presents the pro forma results of Corteva, after giving effect to events that are (1) directly attributable to the merger of DuPont and Dow, debt retirement transactions related to paying off or retiring portions of Historical DuPont’s existing debt liabilities, and the separation and distribution to DowDuPont stockholders of all the outstanding shares of Corteva common stock; (2) factually supportable and (3) with respect to the pro forma statements of income, expected to have a continuing impact on the consolidated results. Refer to Corteva’s Form 10 registration statement filed on May 6, 2019, which can be found on the investors section of the Corteva website, for further details on the above transactions. The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X, and are presented for informational purposes only, and do not purport to represent what the results of operations would have been had the above actually occurred on the dates indicated, nor do they purport to project the results of operations for any future period or as of any future date. Regulation G (Non-GAAP Financial Measures) This earnings release includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures include organic sales, operating EBITDA, pro forma operating EBITDA, operating EBITDA margin, pro forma operating EBITDA margin, operating earnings per share, pro forma operating earnings per share, base tax rate, pro forma base tax rate, and adjusted return on invested capital. Management believes that these non- GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year over year results. These non-GAAP measures supplement the Company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations for these non-GAAP measures to U.S. GAAP are provided in the Selected Financial Information and Non-GAAP Measures starting on page 5 of the Financial Statement Schedules. For first quarter 2019 and prior year, these non-GAAP measures are being reconciled to a pro forma GAAP financial measure prepared and presented in accordance with Article 11 of Regulation S-X. Reconciliations for these non-GAAP measures to their most directly attributable U.S. GAAP measure are provided on slides 21 - 28 of this presentation. Corteva is not able to reconcile its forward-looking non-GAAP financial measures to their most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of the company’s control, such as Significant Items, without unreasonable effort. For Significant Items reported in the periods presented, refer to page 8 of the Financial Statement Schedules. Beginning January 1, 2020, the company will present accelerated prepaid royalty amortization expense as a significant item. Accelerated prepaid royalty amortization represents the noncash charge associated with the recognition of upfront payments made to Monsanto in connection with the Company’s non-exclusive license in the United States and Canada for Monsanto's Genuity® Roundup Ready 2 Yield® Roundup Ready 2 Xtend® herbicide tolerance traits. During the five-year ramp-up period of Enlist E3TM, Corteva is expected to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits beginning in 2021, with expected minimal use of the trait platform after the completion of the ramp-up. Organic sales is defined as price and volume and excludes currency and portfolio impacts. Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits, net and foreign exchange gains (losses), excluding the impact of significant items (including goodwill impairment charges). Non-operating benefits, net consists of non-operating pension and other post-employment benefit (OPEB) credits, tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites of Historical DuPont. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. Operating EBITDA margin is defined as Operating EBITDA as a percentage of net sales. Operating earnings per share are defined as "Earnings per common share from continuing operations - diluted" excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, and the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont. Although amortization of the Company's intangible assets is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. Base tax rate is defined as the effective tax rate excluding the impacts of foreign exchange gains (losses), non-operating benefits, net, amortization of intangibles as of the Separation from DowDuPont, and significant items (including goodwill impairment charges). Adjusted return on invested capital is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, the after-tax impact of interest income and the after-tax impact of interest expense divided by debt plus equity excluding goodwill and intangibles (existing as of Separation). All periods for the first quarter of 2019 and prior are on a pro forma basis as discussed above in the paragraph ‘Corteva Unaudited Pro Forma Financial Information’. 3
Full Year 2019 Highlights Net Sales Operating EBITDA(1) Highlights Outside of North America, net sales grew 1% on a reported basis and 7% on $14.3B $13.8B $2.07B Reported an organic(1) basis $1.99B 3% Operating EBITDA(1) declined due to the impact of weather-related events in North (1) Organic America, partially offset by cost synergies, productivity actions, gain on Flat (2) (2) 2018 2019 2018 2019 divestitures, and new product growth (3) (1) Currency headwinds reduced Operating Rest of World Net Sales Operating EBITDA Margin EBITDA(1) by approximately $170 million, Margins declined approximately 10 basis points for Reported Organic(1) the year, despite over 30 basis points of margin primarily due to the Real and the Euro 1% 7% expansion in the Crop Protection segment SARD(4) costs down 4 percent over prior year Organic Growth(1) Outside of North America (1) Organic sales, Operating EBITDA and Operating EBITDA Margin are non-GAAP measures. See slide 3 for further discussion. (2) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. (3) Rest of World is defined as Europe, Middle East and Africa (EMEA), Latin America and Asia Pacific and excludes North America (U.S. and Canada). (4) SARD is defined as Selling, General & Administrative and Research & Development expense combined. 4
Continued Focus on ROIC(1) to Ensure Capital Discipline 2019 ROIC(1) Key Drivers › Delivering merger cost synergies consistent with commitments 19.8% › Executing comprehensive productivity program benefiting earnings and working capital Target › Harmonizing disparate ERP systems to improve inventory productivity and cycle time › Driving improvement across net working Mid to High Teens capital and capital deployment Percent › Optimizing manufacturing footprint Targeting Consistent Long-Term ROIC(1) in Mid to High Teens Percent (1) Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company's ROIC metric is adjusted and is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, the after-tax impact of interest income and the after-tax impact of interest expense divided by debt plus equity excluding goodwill and intangibles (existing as of Separation). 5
Progress on Five Priorities for Shareholder Value Creation 2019 Highlights 01 02 03 04 05 Instill a strong Drive disciplined Develop innovative Attain best-in-class Deliver above- culture capital allocation solutions cost structure market growth Launched new pure Authorized capital Launched Enlist E3™ Realized merger cost U.S. Pioneer brand (1) play agriculture expansion to support soybeans and Qrome® synergies of $350 share gain company with the Spinosyns growth corn million for the full year Insecticides global Corteva brand, Authorized $1 billion Received China import Authorized ERP growth values, and purpose share repurchase approval for Conkesta project targeted at Launched new Initiated company- program soybean trait eliminating inherited global retail brand costs wide effort focused Returned Ramped Arylex™ Brevant on instilling an owner approximately $220 herbicide, Isoclast™ Reduced R&D costs Restructured U.S. mindset to drive million to insecticide, and 15 percent regional seed sustainable shareholders through Zorvec™ fungicide Committed to holding brands productivity focus dividends and share Accelerated launch of Corporate costs at buybacks over 7 Enlist E3™(2) in North less than 1 percent of months since spin America net sales (1) Based on current reported USDA acreage for 2019 (2) Enlist E3™ soybeans are jointly developed by Dow AgroSciences and MS Technologies™ 6
Full Year 2019 Regional Highlights North America Latin America Asia Pacific Europe, Middle East, Africa Net Sales $1.3B $1.3B $2.9B $2.8B $2.7B $7.4B $2.8B Reported Reported Reported Reported $6.9B 7% 3% Flat 1% (1) Organic Organic (1) Organic (1) Organic (1) 6% 8% 3% 7% FY'18 FY'19 FY'18 FY'19 FY'18 FY'19 FY'18 FY'19 Regional Highlights Unprecedented year New product adoption Dynamic market Strategic moves Combined planted area Strong adoption of Growth in Pyraxalt™ and Market share gains due to down 7% in corn and PowerCore Ultra® in Brazil Spinetoram insecticides route-to-market changes soybeans due to weather- corn market and new products Continued launch of related impacts Launch of Brevant brand ArylexTM and RinskorTM Continued ramp of new Market competitiveness in Share gains in summer herbicides and ZorvecTM products, particularly soybeans and herbicides corn fungicide Arylex™ cereal herbicide and Lumiposa seed Share gains in Pioneer Strong growth in Market share gains in treatment brand corn and soybeans insecticides, particularly South Asia corn market TM Phasing out of regulatory MCS brand restructuring Spinosyns and Isoclast Drought impact in challenged products insecticide Australia, Indonesia, and (1) Organic sales growth is a non-GAAP measure. See slide 3 for further discussion. Thailand reduced volume 7
2019 Customer Event Highlights Customer at the center Enlist Trials Women Growers Field Day Pioneer Corn Plot Tour United States Mexico Kenya Brevant Demo Plots Fall Army Worm Training EduFarm Session Brazil India Indonesia 8
Full Year 2019 Segment Performance Highlights Crop Protection Seed ($ in millions) 2018(1) 2019(1) ($ in millions) 2018(1) 2019(1) Net Sales $6,445 $6,256 Net Sales $7,842 $7,590 Operating EBITDA $1,074 $1,066 Operating EBITDA $1,139 $1,040 Operating EBITDA Margin 16.7% 17.0% Operating EBITDA Margin 14.5% 13.7% Operating EBITDA Bridge ($ in millions) Operating EBITDA Bridge ($ in millions) 1,074 1,066 1,139 1,040 (1) Portfolio Currency Non- Other(4) (1) (1) Currency Non- 2018 Volume Price Production 2019 2018 Portfolio Volume Price Production Other 2019(1) Costs(2) Production Costs(2) Production Costs(3) Costs(3) (1) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. (2) Production costs are net of synergies realized in the period. (3) Non-Production Costs includes costs such as selling, leveraged function costs and product development, net of synergies realized in the period. (4) Other includes gain on divestitures 9
2019 Product Highlights Insecticides Corn Seed Soybean Seed Insecticide Net Sales FY 2018 FY 2019 Corn Net Sales FY 2018 FY 2019 Soybean Net Sales FY 2018 FY 2019 Net Sales ($MM) $1,506 $1,652 Net Sales ($MM) $5,180 $5,111 Net Sales ($MM) $1,494 $1,371 Spinosyns Expansion for Midland, MI facility underway ~30% of corn acres as addressable market Accelerating ramp plan into commercial with full productivity expected in 2024 in U.S. for triple stack of defensive traits portfolio Capacity expansion will essentially double Expanded availability of high-yield potential Estimated coverage of ~20% of total North pre-merger levels at full utilization to products across U.S. corn belt in 2020, America acres(1) in 2020 vs. previous target address global market growth in representing ~20% of lineup of >10% insecticides to handle chewing pests Strong performance and high yields ~30% of market represents licensing Differentiated technology with proprietary reported by farmers using Qrome® – nearly opportunity - Executed ~120 licenses to date formulation and manufacturing process ~7 bushel/acre yield advantage Pioneer branded business key value creator Corteva holds ~10% share of global Received import authorization from China in insecticide market 2019 which was delayed by 3 years vs. Long-term value creation by shift in portfolio expectations to proprietary trait with margin expansion Contributed ~40% of total Crop Protection beginning in 2023 organic sales growth(2) outside of North Low single digit mix benefit contributing to America in 2019 revenue growth in 2020 Overall, EnlistTM system contributed >$200 million of sales in 2019 (1) Represents coverage of total North America market, including branded, competitors and licensees. (2) Organic sales is a non-GAAP measure. Refer to slide 3 for further details. 10
4Q 2019 Highlights ($’s in millions, except EPS) 4Q 2018(1) 4Q 2019 Change Net Sales $2,815 $2,983 6% GAAP Loss from Continuing Operations After Income Taxes $(746) $(42) 94% Operating EBITDA(2) $50 $224 348% Operating EBITDA Margin(2) 1.8% 7.5% ~570 bps GAAP EPS from Continuing Operations $(1.00) $(0.06) 94% Operating EPS(2) $(0.10) $0.07 170% 4Q 2019 Net Sales Bridge ($ in millions) 4Q 2019 Operating EBITDA (2) Bridge ($ in millions) 224 2,983 2,815 50 (5) North Latin (2) Asia (1) Price Production Non- Other 4Q 2018 (2) (2) EMEA (2) Portfolio Currency 4Q 2019 4Q 2018 Portfolio Currency Volume 4Q 2019 America America Pacific Costs(3) Production Costs(4) Earnings and Margin Improvement Over Prior Year (1) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. (2) Organic sales, Operating EBITDA, Operating EBITDA margin and Operating earnings per share are non-GAAP measures. See slide 3 for further discussion. (3) Production costs are net of synergies realized in the period. (4) Non-Production Costs includes costs such as selling, leveraged function costs and product development, net of synergies realized in the period. (5) Other includes gains on divestitures 11
Full Year 2019 Operating EPS(1) Variance Operating EPS(1) Bridge ($) $1.52 ($0.19 ) $0.08 $0.10 $0.02 $1.43 ($0.04 ) ($0.06 ) 2018(2) Currency Volume/Price Costs Change in Base EGL(3) Portfolio/Other 2019 (2) Tax Rate Key Drivers Volume and price decline primarily due to weather-related impacts in North America Cost benefit of 8 cents primarily due to merger-related cost synergies and ongoing productivity Portfolio/Other includes gain on divestitures Synergy Realization Offset by Currency Headwinds (1) Operating earnings per share is a non-GAAP measures. See slide 3 for further discussion. GAAP EPS for the full year 2018 and 2019 was $(6.63) and $0.02, respectively. Full year 2019 improvement over prior year for Loss from Continuing Operations After Income Taxes and GAAP EPS is primarily due to the absence of a goodwill impairment charge recognized in the third quarter 2018. (2) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. (3) EGL is defined as Exchange Gain / (Loss) 12
Full Year 2020 Guidance Net Sales Operating EBITDA(1) Operating EPS(1) ~$14.5B $1.45 - $1.55 ~$2.2B $13.8B $1.43 Reported Operating $1.987B EBITDA(1) ~4-5% ~12% FY'19 FY'20E (2) (2) FY'19 FY'20E FY'19 FY'20E Above Market Growth Op. EBITDA Margin(1) Improvement Operating EPS(1) Improvement Vs. Market 1 – 2.5% ~100bps Mid-point 5% Guidance aligned with mid-term targets and risk-adjusted for market uncertainties (1) Operating EBITDA, Operating EBITDA Margin and Operating EPS are non-GAAP measures. See slide 3 for further discussion. (2) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. 13
2020 Key Assumptions Sales Growth Synergies / Costs Other Financial Organic Growth(1) +4 – 5% Synergies / Productivity Commitment to Return Cash . U.S. planted area: +11 million . $200 million in merger-related to Shareholders acres (1/3 corn, 2/3 soybeans) synergies – COGS improvement . Dividends: ~$400 million . Low single digit realized pricing . Productivity actions ~$30 million . Continued execution against share on corn globally . Combined SG&A and R&D as a repurchase program with excess . ~$50 million North America percent of sales down ~20 bps cash soybean price headwind . 2020 Corporate costs <1% of sales . Crop Protection new product sales growth ~$250 million Investment / Input Costs Pension . Funded level ~80% (GAAP) . ~$150 million of COGS related . ~$300 million in Pension and Currency flat versus prior headwinds, including higher royalty OPEB payments year costs due to ramp of EnlistTM E3 . ~$50 million in costs associated Product divestitures with ERP implementation – on Capital Expenditures . . 2019 net sales for divested track to begin deliver savings by $500 - $600 million product ~$(70) million on an 2022 annualized basis (1) Organic sales is a non-GAAP measures. See slide 3 for further discussion. 14
15
Full Year 2019 Regional Net Sales Highlights – Crop Protection North Reported Organic(1) Latin Reported Organic(1) Global Net Sales (3) America 10% 9% America 3% 8% $6.4B $6.3B FY 2018 FY 2019 FY 2018 FY 2019 Net Sales ($MM) $2,438 $2,205 Net Sales ($MM) $1,715 $1,759 Reported Volume Price Currency Portfolio Volume Price Currency Portfolio 3% (6)% (3)% - % (1)% 7% 1% (5)% - % Reduced volumes on lower applications Strong demand for new products, including Organic(1) from weather-related delays and lower IsoclastTM insecticide and VessaryaTM planted area fungicide 1% Pricing reflects continued penetration of Unfavorable currency impact from Brazilian customer incentives and programs Real FY'18 FY'19 Reported Organic(1) Asia Reported Organic(1) Volume Price Currency Portfolio EMEA Flat 7% Pacific 1% 3% 1% - % (3)% (1)% FY 2018 FY 2019 FY 2018 FY 2019 Net Sales ($MM) $1,357 $1,362 Net Sales ($MM) $935 $930 Volume Price Currency Portfolio Volume Price Currency Portfolio (2) Rest of World Net Sales 5% 2% (7)% - % - % 3% (3)% (1)% Continued penetration of new products, (1) Price improvement in insecticides Reported 1% Organic 7% including ArylexTM herbicide and ZorvecTM fungicide Successful farmer engagement programs (1) Organic sales growth is a non-GAAP measures. See slide 3 for further discussion. Phase-out of regulatory challenged and retailer interface underpinning (2) Rest of World is defined as Europe, Middle East and Africa (EMEA), Latin America and Asia Pacific and excludes North America (U.S. and Canada). products performance (3) North America is defined as U.S. and Canada. 16
Full Year 2019 Regional Net Sales Highlights – Seed North Reported Organic(1) Latin Reported Organic(1) (3) Global Net Sales America 5% 5% America 3% 7% FY 2018 4Q 2019 FY 2018 FY 2019 $7.8B Net Sales ($MM) $4,974 $4,724 Net Sales ($MM) $1,102 $1,130 $7.6B Volume Price Currency Portfolio Volume Price Currency Portfolio Reported (3)% (2)% - % - % (1)% 8% (4)% - % 3% Weather-related events led to delayed Continued penetration of PowerCore Ultra® in Organic(1) planting and lower planted area, impacting corn and Intacta in soybean drove sales seed volumes growth 1% Competitive pressures in soybeans and Early start to Safrinha in 4Q18 impacted replant led to downward pricing volumes FY'18 FY'19 Reported Organic(1) Asia Reported Organic(1) EMEA 2% 6% Flat 4% Volume Price Currency Portfolio Pacific (1)% - % (2)% - % FY 2018 FY 2019 FY 2018 FY 2019 Net Sales ($MM) $1,408 $1,378 Net Sales ($MM) $358 $358 Volume Price Currency Portfolio Volume Price Currency Portfolio Rest of World Net Sales(2) 5% 1% (8)% - % 2% 2% (4)% - % (1) RTM changes in Eastern Europe to Volume and price growth in corn in South Asia Reported Flat Organic 6% Direct Model drove volume growth (1) Organic sales growth is a non-GAAP measures. See slide 3 for further discussion. Share gains in sunflower and corn (2) Rest of World is defined as Europe, Middle East and Africa (EMEA), Latin America and Asia Pacific and excludes North America (U.S. and Canada). (3) North America is defined as U.S. and Canada. 17
4Q 2019 Segment Performance Highlights Crop Protection Performance Highlights . Strong demand in North America led by ramp up of EnlistTM (1) ($’s in millions) 4Q 2018 4Q 2019 herbicide and in Latin America for insecticides, partially offset Net Sales $1,689 $1,740 by currency headwinds, customer program discounts and portfolio changes Operating EBITDA $169 $277 . Operating EBITDA improvement led by cost synergies, gains on divestitures and improved volumes on new products, Operating EBITDA Margin 10.0% 15.9% partially offset by increased selling costs. Gains on divestitures in the quarter were approximately $70 million Seed Performance Highlights ($’s in millions) 4Q 2018(1) 4Q 2019 . Stronger sales due to favorable mix in Latin America on PowerCore Ultra® penetration and increased deliveries of Net Sales $1,126 $1,243 multi-channel brands in North America, partially offset by unfavorable currency Operating EBITDA $(87) $(26) . Operating EBITDA improvement on stronger pricing and cost Operating EBITDA Margin (7.7)% (2.1)% synergies and ongoing productivity, partially offset by higher input costs (1) First quarter 2019 and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. 18
FY20 Modeling Guidance - Operating Earnings Per Share(1) ($ in millions, except where noted) Guidance Commentary Depreciation (575 – 625) Interest Income 25 – 30 (90 – 110) Primarily represents cost of short-term borrowings to fund working Interest Expense capital Base Tax Rate(1) 19% - 21% Exchange Losses – net, Represents cost of balance sheet hedging program, net of tax after tax (60 – 80) Net Income – Non- controlling interest (20 – 30) Diluted Shares ~750 - 752 Operating Earnings Per ~$1.45 – 1.55 +5% vPY using the midpoint Share(1) (1) Base tax rate and operating earnings per share are non-GAAP measures. Corteva does not provide a reconciliation of forward-looking non-GAAP measures. See slide 3 for further discussion. 19
Continued Focus on ROIC to Ensure Capital Discipline Return on Invested Capital (ROIC) 2019 ROIC Calculation(3) Numerator 19.8% (1) Operating Earnings ($ in millions) Numerator FY 2019 (-) Interest Expense, pre-tax Net income (loss) from continuing operations attributable to Corteva $ 13 (-) (Interest Income, pre-tax) Less: Non-operating benefits - net, after tax 100 Less: Amortization of intangibles (as of Separation), after tax (376) Less: Significant(1) items charge, after tax (784) (-) Provision on interest income/(expense), net Operating Earnings $ 1,073 Less: Interest Expense, pre-tax (91) Adjusted NOPAT Less: Interest Income, pre-tax 59 Less: Benefit from income taxes on interest income and expense, net 6 Adjusted NOPAT $ 1,099 Denominator (Four quarter avg.) Denominator Goodwill 10,212 (+) Shareholder's Equity incl. NCI Other Intangibles 11,721 Total goodwill and other intangible assets (as of (+) Total debt Separation) $ 21,933 Short term borrowings and finance lease obligations 2,096 (-) Total goodwill and intangibles (existing as Long-term debt 133 Total Debt $ 2,229 (2) of Separation) Total Equity $ 25,257 Adjusted Invested Capital Total Debt plus Equity $ 27,486 Total Debt plus Equity, less goodwill and other intangible assets ("Adjusted Invested Capital") $ 5,553 ROIC Target of Mid to High Teens Percent(3) (1) Operating earnings is a non-GAAP measure. See slide 3 for further details. (2) The company has revised the balance of additional paid in capital as of 6/30/2019 in the amount of $76 million to reflect the removal of an asset related to the Separation. (3) Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company's ROIC metric is adjusted and is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, the after-tax impact of interest income and the after-tax impact of interest expense divided by debt plus equity excluding goodwill and intangibles (existing as of Separation). 20
Corteva Non-GAAP Calculation of Corteva Operating EBITDA Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma 1 (Loss) income from continuing operations, net of tax (GAAP) $ (42) $ (746) $ 26 $ (4,937) (Benefit for) provision for income taxes (145) 201 1 395 (Loss) income from continuing operations before income taxes $ (187) $ (545) $ 27 $ (4,542) + Depreciation and Amortization 289 242 1,000 909 - Interest income (13) (23) (59) (86) + Interest expense 24 25 91 76 + / - Exchange losses (gains), net 29 (63) 66 77 + / - Non-operating benefits, net (23) (56) (129) (211) + Goodwill impairment charge - - - 4,503 + Significant items charge 105 470 991 1,346 2 Corteva Operating EBITDA (Non-GAAP) $ 224 $ 50 $ 1,987 $ 2,072 1. Pro forma (loss) income from continuing operations, net of tax, has been prepared in accordance with Article 11 of Regulation S-X and is considered the most directly comparable GAAP measure to Pro Forma Operating EBITDA. 2. Corteva Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits (costs) - net and foreign exchange gains (losses), excluding the impact of significant items (including goodwill impairment charges). Non-operating benefits (costs) - net consists of non-operating pension and other post-employment benefit (OPEB) credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with Historical DuPont businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. 21
Corteva Segment Information Net sales by segment In millions Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 Seed $ 1,243 $ 1,126 $ 7,590 $ 7,842 Crop Protection 1,740 1,689 6,256 6,445 Total net sales $ 2,983 $ 2,815 $ 13,846 $ 14,287 Corteva Operating EBITDA Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma Seed $ (26) $ (87) $ 1,040 $ 1,139 Crop Protection 277 169 1,066 1,074 Corporate (27) (32) (119) (141) 1 Corteva Operating EBITDA (Non-GAAP) $ 224 $ 50 $ 1,987 $ 2,072 1. Corteva Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation, amortization, non- operating benefits (costs) - net and foreign exchange gains (losses), excluding the impact of significant items (including goodwill impairment charges). Non- operating benefits (costs) - net consists of non-operating pension and other post-employment benefit (OPEB) credits (costs), tax indemnification adjustments, environmental remediation and legal costs associated with Historical DuPont businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the company as pre-tax income or expense. Operating EBITDA margin Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 As Reported Pro Forma Pro Forma Pro Forma Seed -2.1% -7.7% 13.7% 14.5% Crop Protection 15.9% 10.0% 17.0% 16.7% 2,3 Total Operating EBITDA margin (Non-GAAP) 7.5% 1.8% 14.4% 14.5% 2. Operating EBITDA margin is Operating EBITDA as a percentage of net sales. 3. Operating EBITDA margin %'s for Corporate are not presented separately above as they are not meaningful; however, the results are included in the Total margin %'s above. 22
Corteva significant items (Pretax) Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma Seed Loss on deconsolidation - (53) - (53) Loss on divestiture - (2) (24) (2) Gain on sale of assets - - - 24 Restructuring and asset-related charges - net (90) (95) (213) (368) Inventory amortization - - (67) - Total Seed (90) (150) (304) (399) Crop Protection Restructuring and asset-related benefits (charges) - net 1 (16) (23) (58) Total Crop Protection 1 (16) (23) (58) Corporate Integration and separation costs (50) (187) (632) (571) Loss on debt extinguishment - - (13) - Restructuring and asset-related charges - net 34 (117) 14 (268) Argentina devaluation - - (33) - Income tax items 1 - - - (50) Total Corporate (16) (304) (664) (889) Total significant items by segment (Pretax) (105) (470) (991) (1,346) Total tax impact of significant items 83 107 135 239 Tax only significant items 34 (274) 72 (347) Total significant items benefit (charge), net of tax $ 12 $ (637) $ (784) $ (1,454) 1. Includes a foreign exchange loss related to adjustments to Historical DuPont’s foreign currency exchange contracts as a result of U.S. tax reform, included in other income - net. 23
Corteva Segment Information - Price, Volume Currency Analysis Region Q4 2019 vs. Q4 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ 151 15% $ 156 16% 2% 14% —% -1% EM EA 18 5% 25 7% 4% 3% -2% —% Asia Pacific (27) -7% (23) -6% -2% -4% 1% -2% Latin America 26 2% 95 8% 4% 4% -6% —% Rest of World 17 1% 97 5% 3% 2% -4% —% Total $ 168 6% $ 253 9% 3% 6% -3% —% Seed Q4 2019 vs. Q4 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ 102 27% $ 100 26% 10% 16% —% 1% EM EA (8) -4% (7) -3% -1% -2% -1% —% Asia Pacific (1) -1% (4) -4% -2% -2% 3% —% Latin America 24 5% 53 11% 12% -1% -6% —% Rest of World 15 2% 42 6% 7% -1% -4% —% Total $ 117 10% $ 142 13% 8% 5% -3% —% Crop Protection Q4 2019 vs. Q4 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ 49 8% $ 56 9% -4% 13% —% -1% EM EA 26 13% 32 16% 9% 7% -3% —% Asia Pacific (26) -9% (19) -7% -2% -5% 1% -3% Latin America 2 —% 42 7% -1% 8% -7% —% Rest of World 2 —% 55 5% 1% 4% -4% -1% Total $ 51 3% $ 111 7% -1% 8% -3% -1% 24
Corteva Segment Information - Price, Volume Currency Analysis Region Twelve Months Ended December 31, 2019 vs. Twelve Months Ended December 31, 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ (483) -7% $ (448) -6% -2% -4% -1% —% EM EA (25) -1% 189 7% 2% 5% -8% —% Asia Pacific (5) —% 43 3% 2% 1% -3% —% Latin America 72 3% 208 8% 4% 4% -5% —% Rest of World 42 1% 440 7% 3% 4% -6% —% Total $ (441) -3% $ (8) —% —% —% -3% —% Seed Twelve Months Ended December 31, 2019 vs. Twelve Months Ended December 31, 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ (250) -5% $ (237) -5% -2% -3% —% —% EM EA (30) -2% 85 6% 1% 5% -8% —% Asia Pacific — —% 14 4% 2% 2% -4% —% Latin America 28 3% 82 7% 8% -1% -4% —% Rest of World (2) —% 181 6% 4% 2% -6% —% Total $ (252) -3% $ (56) -1% —% -1% -2% —% Crop Protection Twelve Months Ended December 31, 2019 vs. Twelve Months Ended December 31, 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ (233) -10% $ (211) -9% -3% -6% —% -1% EM EA 5 —% 104 7% 2% 5% -7% —% Asia Pacific (5) -1% 29 3% 3% —% -3% -1% Latin America 44 3% 126 8% 1% 7% -5% —% Rest of World 44 1% 259 7% 2% 5% -5% -1% Total $ (189) -3% $ 48 1% —% 1% -3% -1% 25
Corteva Non-GAAP Calculation of Corteva Operating EPS Three Months Ended December 31, 2019 2018 2019 2018 $ (millions) $ (millions) EPS (diluted) EPS (diluted) As Reported Pro Forma As Reported Pro Forma Net loss from continuing operations attributable to Corteva (GAAP) $ (45) $ (752) $ (0.06) $ (1.00) Less: Non-operating benefits - net, after tax 16 44 0.02 0.06 Less: Amortization of intangibles (existing as of Separation), after tax (126) (86) (0.17) (0.11) Less: Significant items benefit (charge), after tax 12 (637) 0.02 (0.85) 1 Operating Earnings (Loss) (Non-GAAP) $ 53 $ (73) $ 0.07 $ (0.10) Twelve Months Ended December 31, 2019 2018 2019 2018 $ (millions) $ (millions) EPS (diluted) EPS (diluted) Pro Forma Pro Forma Pro Forma Pro Forma Net income (loss) from continuing operations attributable to Corteva (GAAP) $ 13 $ (4,966) $ 0.02 $ (6.63) Less: Non-operating benefits - net, after tax 100 165 0.13 0.22 Less: Amortization of intangibles (existing as of Separation), after tax (376) (313) (0.50) (0.42) Less: Goodwill impairment charge, after tax - (4,503) - (6.01) Less: Significant items charge, after tax (784) (1,454) (1.04) (1.94) 1 Operating Earnings (Non-GAAP) $ 1,073 $ 1,139 $ 1.43 $ 1.52 Less: Interest Expense, pre-tax (91) Less: Interest Income, pre-tax 59 Less: Benefit from income taxes on interest income and expense, net 6 2 Adjusted NOPAT (Non-GAAP) $ 1,099 1. Operating earnings is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), non-operating benefits - net, and amortization of intangible assets (existing as of Separation). Although amortization of intangible assets (existing as of Separation) is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets 2. Adjusted NOPAT is defined as operating earnings excluding interest expense, interest income, and the income tax effects of interest expense and interest income. 26
Corteva Non-GAAP Calculation of Corteva Base Tax Rate Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 As Reported Pro Forma Pro Forma Pro Forma Net (loss) income from continuing operations before income taxes (GAAP) $ (187) $ (545) $ 27 $ (4,542) Add: Significant items - charge 105 470 991 1,346 Goodwill impairment charge - - - 4,503 Non-operating benefits - net (23) (56) (129) (211) Amortization of intangibles (existing as of Separation) 161 107 475 391 Less: Exchange (losses) gains, net (29) 63 (66) (77) Income (loss) from continuing operations before income taxes, significant items, goodwill impairment charges, non-operating benefits - net, amortization of intangibles (existing as of Separation), and exchange gains (losses), net (Non-GAAP) $ 85 $ (87) $ 1,430 $ 1,564 (Benefit from) provision for income taxes on continuing operations (GAAP) $ (145) $ 201 $ 1 $ 395 Add: Tax benefits (expenses) on significant items charge 117 (167) 207 (108) Tax expenses on goodwill impairment charge - - - - Tax expenses on non-operating benefits - net (7) (12) (29) (46) Tax benefits on amortization of intangibles (existing as of Separation) 35 21 99 78 Tax benefits (expenses) on exchange gains (losses), net 15 (78) 2 (64) Provision for (benefit from) income taxes on continuing operations before significant items, goodwill impairment charges, non- operating benefits - net, amortization of intangibles (existing as of Separation), and exchange (gains) losses, net (Non-GAAP) $ 15 $ (35) $ 280 $ 255 Effective income tax rate (GAAP) 77.5% -36.9% 3.7% -8.7% Significant items, goodwill impairment charge, non-operating benefits, and amortization of intangibles (existing as of Separation) effect -77.5% -142.3% 16.7% 30.2% Tax rate from continuing operations before significant items, goodwill impairment charge, non-operating benefits - net, and amortization of intangibles (existing as of Separation) 0.0% -179.2% 20.4% 21.5% Exchange gains (losses) effect 17.6% 219.4% -0.8% -5.2% Base income tax rate from continuing operations (Non-GAAP)1 17.6% 40.2% 19.6% 16.3% 1. Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), significant items, goodwill impairment charges, amortization of intangibles (existing as of Separation), and non-operating benefits - net. 27
Corteva Non-GAAP Calculation of Adjusted Return on Invested Capital (ROIC) Adjusted Invested Capital (in millions) March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Trailing Twelve Months Pro Forma As Reported As Reported As Reported Pro Forma Goodwill $ 10,203 $ 10,249 $ 10,168 $ 10,229 $ 10,212 Other intangible assets 11,961 11,832 11,667 11,424 11,721 Total goodwill and other intangible assets (existing as of Separation) 22,164 22,081 21,835 21,653 21,933 Short term borrowings and finance lease obligations $ 2,716 $ 2,058 $ 3,604 $ 7 $ 2,096 Long-term debt 183 117 116 115 133 Total Debt 2,899 2,175 3,720 122 2,229 1 Total Equity 25,145 26,067 25,261 24,555 25,257 Total Debt plus Equity 28,044 28,242 28,981 24,677 27,486 Total Debt plus Equity, less goodwill and other intangible assets (existing as of Separation) ("Adjusted Invested Capital") $ 5,880 $ 6,161 $ 7,146 $ 3,024 $ 5,553 2 Adjusted NOPAT $ 1,099 Adjusted Invested Capital $ 5,553 3 Adjusted Return on Invested Capital 19.8% 1. The company has revised the balance of additional paid in capital as of 6/30/2019 in the amount of $76 million to reflect the removal of an asset related to the Separation. 2. Adjusted NOPAT is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, the after-tax impact of amortization expense associated with intangible assets existing as of Separation, the after-tax impact of interest income and the after-tax impact of interest expense divided by debt plus equity excluding goodwill and intangibles (existing as of Separation). 3. Adjust ed Ret urn on Invest ed Capit al ("ROIC") is defined as Adjust ed NOPAT divided by debt plus equit y excluding goodwill and int angibles (exist ing as of Separat ion). 28