10-QPeriod: Q1 FY2020

Corteva, Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:CTVA

Summary

Corteva, Inc. reported a strong first quarter in 2020, with net sales increasing by 16% year-over-year to $3.96 billion. This growth was primarily driven by a significant 17% increase in volume, particularly in the Seed segment, supported by favorable weather conditions and strong demand. The company also benefited from price increases, though partially offset by currency headwinds. Net income attributable to Corteva was $272 million, a substantial improvement from the prior year's comparable period and a significant rebound from the net loss reported in Q1 2019 from continuing operations. This performance was bolstered by the absence of integration and separation costs incurred in the prior year and improved operating leverage. The company also highlighted operational efficiencies and progress on its "Execute to Win" productivity program, positioning it for continued operational improvements.

Financial Highlights

51 data points
Beta

Revenue

$3.96B

42.6% Gross Margin

Net Income

$272.00M

6.9% Net Margin

EPS (Diluted)

$0.36

Total Assets

$42.98B

Cash & Equivalents

$1.96B

Free Cash Flow

-$1.93B

Financial Statements
Beta
Revenue$3.96B
Cost of Revenue$2.27B
Gross Profit$1.69B
R&D Expenses$280.00M
SG&A Expenses$757.00M
Net Income$272.00M
EPS (Basic)$0.36
EPS (Diluted)$0.36
Shares Outstanding (Basic)749.90M
Shares Outstanding (Diluted)752.50M

Key Highlights

  • 1Net sales increased 16% year-over-year to $3.96 billion, driven by a 17% volume increase and a 3% price increase, partially offset by currency impacts.
  • 2Net income attributable to Corteva was $272 million, a significant improvement from $164 million in the prior year, reflecting strong operational performance.
  • 3Seed segment sales grew 25% to $2.46 billion, driven by strong volume in North America and EMEA, and favorable pricing.
  • 4Crop Protection segment sales increased 5% to $1.50 billion, supported by new product launches and strong demand in Latin America and EMEA.
  • 5The company repurchased $50 million of its common stock under its $1 billion share repurchase program.
  • 6Corteva suspended its full-year 2020 financial outlook due to uncertainty surrounding the COVID-19 pandemic.
  • 7Segment Operating EBITDA increased to $819 million from $545 million (pro forma) in the prior year, demonstrating improved profitability.

Frequently Asked Questions

Corteva's net sales increased by 16% to $3.96 billion in the first quarter of 2020 compared to $3.40 billion in the first quarter of 2019. This growth was primarily attributed to a 17% increase in volume and a 3% increase in local price, though partially offset by a 3% decline due to currency fluctuations and a 1% impact from portfolio changes.

Net income attributable to Corteva was $272 million for the first quarter of 2020. This represents a significant improvement from $164 million in the same period of 2019. Income from continuing operations after income taxes was $281 million, a substantial rebound from a loss of $184 million in Q1 2019.

Corteva suspended its full-year 2020 financial outlook due to the uncertainty created by the COVID-19 pandemic and its impact on global markets. While agriculture was largely considered an 'essential business' and the company experienced localized disruptions that were temporary, the broader economic impact and market volatility are significant concerns for future demand and potential asset impairments. The company has sufficient liquidity and is monitoring the situation closely.

The Seed segment saw strong growth, with net sales up 25% to $2.46 billion, driven by increased volume and favorable pricing. The Crop Protection segment also grew, with net sales up 5% to $1.50 billion, supported by new product launches and strong demand. Segment Operating EBITDA for Seed was $581 million, and for Crop Protection was $238 million, both showing year-over-year increases.