10-QPeriod: Q3 FY2021

Corteva, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 4, 2021For Securities:CTVA

Summary

Corteva, Inc. (CTVA) reported a significant turnaround in its third quarter of 2021 compared to the same period in 2020, demonstrating strong top-line growth and improved profitability. Net sales surged by 27% year-over-year, driven by a robust 17% increase in volume and a 7% price increase, reflecting successful new technology adoption and effective pricing strategies across its Seed and Crop Protection segments. The company's Operating EBITDA also saw substantial improvement, turning positive and indicating effective cost management amidst inflationary pressures. For the nine-month period, Corteva continued its positive momentum with an 11% increase in net sales, driven by solid volume and price gains. The company successfully navigated cost headwinds, such as higher input and logistics expenses, through ongoing productivity initiatives and favorable currency impacts. Corteva also reaffirmed its full-year 2021 outlook for net sales and operating earnings per share, signaling confidence in its continued performance. The company also returned significant capital to shareholders through share repurchases and dividends.

Financial Highlights

50 data points
Beta

Revenue

$2.37B

34.3% Gross Margin

Net Income

$32.00M

1.3% Net Margin

EPS (Diluted)

$0.04

Total Assets

$41.12B

Cash & Equivalents

$2.78B

Free Cash Flow

-$176.00M

Financial Statements
Beta
Revenue$2.37B
Cost of Revenue$1.56B
Gross Profit$813.00M
R&D Expenses$297.00M
SG&A Expenses$672.00M
Net Income$32.00M
EPS (Basic)$0.04
EPS (Diluted)$0.04
Shares Outstanding (Basic)733.80M
Shares Outstanding (Diluted)739.50M

Key Highlights

  • 1Net sales increased by 27% to $2,371 million for the three months ended September 30, 2021, compared to the prior year, driven by 17% volume growth and 7% price increase.
  • 2Nine-month net sales grew by 11% to $12,176 million, supported by 6% volume growth and 3% price increase.
  • 3Operating EBITDA improved significantly, turning positive to $(51) million for Q3 2021 from $(179) million in Q3 2020, and increased to $2,314 million for the nine months ended September 30, 2021, from $1,851 million in the prior year.
  • 4The company reaffirmed its full-year 2021 outlook, expecting net sales between $15.5 billion and $15.7 billion and Operating Earnings Per Share between $2.05 and $2.15.
  • 5Corteva returned approximately $1 billion to shareholders in the first nine months of 2021 through share repurchases and dividends, including the completion of its $1 billion 2019 share buyback plan and commencing a new $1.5 billion program.
  • 6Both Seed and Crop Protection segments showed strong performance, with net sales up 41% and 22% respectively in the third quarter, driven by volume and price increases.
  • 7Restructuring and asset-related charges decreased to $26 million in Q3 2021 from $49 million in Q3 2020, reflecting the completion of certain restructuring initiatives.

Frequently Asked Questions

Corteva's net sales increased by 27% in Q3 2021 compared to Q3 2020, primarily driven by a 17% increase in volume and a 7% increase in price. This growth was fueled by the continued penetration of new technologies in both the Seed and Crop Protection segments, strong global execution, and effective pricing strategies.

While Corteva experienced cost headwinds from higher input, freight, and logistics costs, it managed these pressures through ongoing cost and productivity actions. These efforts, along with favorable currency impacts and strong price execution, helped to largely offset these increased expenses.

Corteva reaffirmed its full-year 2021 outlook, expecting net sales between $15.5 billion and $15.7 billion and Operating Earnings Per Share between $2.05 and $2.15. The company continues to return capital to shareholders, having repurchased approximately $1 billion worth of shares and paid dividends in the first nine months of 2021. They also initiated a new $1.5 billion share repurchase program.

Corteva is involved in various legal proceedings and environmental matters, including those related to legacy EID businesses. A significant ongoing issue involves potential liabilities related to per- and polyfluoroalkyl substances (PFAS). The company has entered into a memorandum of understanding (MOU) with Chemours and DuPont to establish a cost-sharing arrangement and escrow account for certain PFAS liabilities. While the company accrues for these matters when probable and estimable, it notes that it is reasonably possible that liabilities could exceed current accruals for some environmental matters, though specific amounts are not always estimable.