Corteva at Wolfe Research Conference: Strategic Growth and Challenges

On Tuesday, 17 June 2025, Corteva Inc. (NYSE:CTVA) presented at the Wolfe Research 2nd Annual Materials of the Future Conference. The discussion, led by CEO Chuck Magro and CFO Dave Johnson, highlighted the company’s strategic initiatives and growth prospects, while also acknowledging market challenges. Key topics included the company’s technological advancements and financial performance, alongside the impact of external factors such as tariffs and agricultural policies.

Key Takeaways

• Corteva’s Q1 EBITDA increased by 15% year-over-year, with a revised first-half growth outlook in the mid to upper single digits.
• The company is focused on technology leadership, particularly in seed technology and biologicals.
• Tariffs are expected to impact Corteva by $25 to $30 million in 2025, primarily in the crop protection segment.
• Corteva aims for $400 million in net cost improvements this year, with significant restructuring in crop protection.
• Strategic capital allocation includes increased R&D investment and a 30% dividend raise.

Financial Results

• Corteva reported a 15% year-over-year increase in Q1 EBITDA.
• The initial full-year guidance indicated a 10% increase, later revised to a 5% increase for the first half.
• Tariffs are projected to impose a $25 to $30 million impact in 2025, affecting the crop protection products.
• The company targets $400 million in net cost improvements, with $700 million of the anticipated $1 billion EBITDA improvement over three years attributed to these savings.

Operational Updates

• Corteva has strategically pruned its portfolio, exiting non-economical markets, and focusing on technology-driven seed sales.
• The company is addressing challenges in the crop protection market, with price pressures expected to persist.
• Corteva has multisourced 70% of its imports, with key products Enlist and Spinosyns produced domestically.
• The technology pipeline includes short stature corn and hybrid wheat, expected to enhance yield and planting density by 2027.

Future Outlook

• Corteva is investing in gene editing, biofuels, and hybrid wheat, with launches anticipated in 2027.
• The company is targeting growth beyond 2027 through technological advancements and out-licensing opportunities.
• Strategic M&A and R&D investments are prioritized to drive long-term value.

Q&A Highlights

• Tariffs are considered manageable, with the primary impact on crop protection.
• Corteva’s capital allocation strategy balances share buybacks, M&A, and dividends to enhance shareholder value.
• The company’s long-term growth potential, particularly in new technologies and licensing, may be underappreciated by the market.

For a detailed account of the conference call, please refer to the full transcript below.

Full transcript - Wolfe Research 2nd Annual Materials of the Future Conference:

Chris, Analyst: Sup? We have Corteva. We have Chuck Magro, the CEO. Is Dave Johnson, the CFO, I think, almost a year in?

Dave Johnson, CFO, Corteva: Nine months, but

Chris, Analyst: Not getting there.

Chuck Magro, CEO, Corteva: Feels like a year.

Chris, Analyst: Feels like a year? It’s been a fun year, though.

Dave Johnson, CFO, Corteva: Yeah. It’s a

Chuck Magro, CEO, Corteva: good year.

Chris, Analyst: You know, I I really start like to start this off as by saying that, you know, the the thesis is and if I do say so myself, being on the the top of the Wolf Alpha list, the thesis have been evolving really nicely over the last two years. And that’s not without hiccups. It’s not without macro challenges, FX, you name it. But Chuck, as CEO, what are the two things you’re the most happy with? What are two things you feel Corteva needs to be doing better?

And then perhaps we’ll launch into a longer term discussion from there. Thank you.

Chuck Magro, CEO, Corteva: Chris, good to see you. Hi, everyone. Great to be here. Yeah. Look.

So Corteva just turned six, last week. So pretty new company still. I’d say that the things that we’ve been working on, it has to do with strategy and then just getting really good at execution. So I generally, I’m pleased with both of those. If you think about the strategic direction of the company, several years ago, we made the tough choices.

We pruned the portfolio. We exited a bunch of countries that didn’t make economic sense for us. And then when you look at seed, we decided we were gonna be a technology seller, not a technology buyer. And we embarked on sort of that journey to royalty neutrality, as we call it. And in CP, we we decided we wanted to be the leader in biologicals.

So we made a couple acquisitions, we beefed up our r and d. All of that seems to be going very well. And then execution, I’m a big believer that we have to do what we say, say what we do, and continually just be boringly reliable when it comes to our performance. And we we’ve done a I I think a very good job of that. What we missed and maybe the things that kinda caught us, obviously, crop protection destocking caught all of us.

You know, I’ve said this before, I don’t think I would have changed, I wouldn’t have slowed down selling. I just wouldn’t have done it if we had major customers that wanted the product. But we probably could have looked around the corners a bit more, saw where this was going, pulled back our inventories and our production, and got ready for the storm. And and so we’ve put some things in place to to fix that. I’d say the thing that I’m most excited about, and that is probably the the new part for Corteva, is just the short term, but also the medium term growth strategy we’ve got.

If you start thinking about what’s in the pipeline from a technology perspective, we literally can change the way we farm in the next decade. And and that, to me, is why we’re here, and and it’s very exciting for me.

Chris, Analyst: Just, you know, I I don’t wanna be short term, and I don’t wanna at hinge your growth strategy on what’s been happening in The US marketplace. But, I mean, since January, there’s been a lot of change between, first of all, the growth outlook based on US ag policy, we can certainly get to that. But also just the shift in terms of being a little bit more positive on coarse grains, perhaps a little bit more cautious at least to start the year on soybeans. Just how has the first half holistically been developing for you? Have there been any surprises?

Where do we stand? And perhaps we’ll once again go into the longer term from there.

Chuck Magro, CEO, Corteva: Yep. Do you want to hit the numbers?

Dave Johnson, CFO, Corteva: I can hit the numbers. You’re interested in that, Chris. So basically, you know, when we first came out with our Q1 numbers, we did have a very strong start to the year. Our EBITDA was up about 15% year over year, and our full year guide was up 10%. Now in our business, we don’t really look at quarters.

It’s really the half that matters. Right? Because you do have timing, weather elements, and what have you between March and April. So when we first provide our guide, we said, okay, first half, we’re probably gonna be now up about 5% year over year, where when we had first put out our guide earlier in the year, we said we’d be flat. So a little bit ahead of where we thought.

As q two’s progressed, I would say that we feel pretty good that we’re transitioning or going closer between in that mid single digit to upper single digit. So I feel like, you know, the first half is gonna play out pretty well for us. But we’ll have to see and evaluate what, if any, that changes our full year outlook given that we still have a strong second half of the year baked in, and we’ll do that after, you know, close.

Chuck Magro, CEO, Corteva: And I say, Chris, just the broader economy. So I I’ve spent the last two months traveling through Argentina, Brazil, of course, The US and Canada. And I’m actually surprised at how much optimism is on the farm. So we’re seeing most of the, you know, progressive farmers still acquiring land, investing in infrastructure. They’re preparing their children to take over the farming operations.

I think that they and the one thing that I wanted to hear, which we see in spades, is they they’re craving that next generation of technology. They they actually need it right now. Where they’re where they’re focused on and where their concern areas are, obviously, in The US, crop pricing has been muted a bit. So that’s pinching some margin. So we have to watch that.

It’s not an emergency today, but it is something that we need to really, think through what happens over the next, six, nine months, maybe twelve months. And then trade. So farmers are farming right now. The crop’s coming out of the ground. Things are looking good very good.

I think the question is what happens at harvest, and will the trade situation be stable enough where they can sell the the grain because they do require the export markets to be open. So that’s on a a lot of people’s minds. We can dive into other parts of the of the world when you’re ready, but I’d say generally there was more optimism than I thought.

Chris, Analyst: So I want to know on tariffs after this, but since the beginning of the year, and to be clear, this is not a just a year question, it’s a how do we build from here question. But you’ve had some things I mean, the market’s been rocky, but at the same time, as you’ve also had a few things fall a little bit more in your favor, you’ve been positioned very, very well. And I could get into some product things, but I’ll just say US ag policy, even in the last week, seems to be edging in the right direction. Let me know if you disagree with this, but it seems Brazil maybe have increased our acreage for the first time in half a almost half a decade. Oh, wow.

It has. Argentina, you mentioned. It seems like the ag policy is edging in the right direction, perhaps a little bit slower. But FX, we could talk about interest if you you want. But just how do we think does does 2025 seem to be evolving in a at a time when you think this is kind of more comfortably setting up a better foundation to hit some of your ’27 targets versus your expectations about four to six months?

I’ll give you a little leeway on the response there.

Chuck Magro, CEO, Corteva: So so the answer is yes. Look, if you look at what will move the needle for Corteva, it would be okay. So gene editing. We need freedom to operate, and it looks like the EU is very close. So that’s another really important, I think, linchpin to get that product on on farms around the world.

So that’s moving in the right direction. I think, like you said, Brazil and US biofuels policy are both heading in the right direction. And and I I I’m shocked at the speed at which Brazil is moving to be, you know, they’re the second largest corn ethanol producer now in the world. They’re they’re still putting infrastructure in for that, and they’re very excited about the next generation of biofuels, so biodiesel and and SAF. And then you have the decisions that were made just in the last six or seven days with The US, the man the blend mandate going up pretty substantially, and you start thinking about that plus laying the the discussion to have a healthy conversation around SAF and and biodiesel here in this country, this is all in the right direction.

This is exactly what farming should be about, would be finding ways to rely a little less on export markets, consume the the the, crop commodities inside of these core countries, and then rely on the export markets for the rest, of course. So there’s a lot here that we really like. And then from a technology perspective, you know, our biofuel program had another very successful winter grow program, and we’re just, you know, counting up the the harvest data now, but it looks great. So we’re gonna take that to the next level. I’d be remiss not to call out hybrid wheat.

It’s one of my favorite topics lately. But literally, we can transform, that food system. It it goes a long way to global food security because, 20% of the calories we consume as humanity is is wheat based. And so if we can drive up yields by 10 or 15% in the early days, because we’re gonna launch this in 2027, it’s a good business for us. It’ll be a big business for us.

We’re saying it could be a peak billion dollars of revenue for us. But also, I think it goes a long way to feeding a lot more people.

Chris, Analyst: You know, on the Brazilian ag policy, Chuck, even at the time you and I have known each other, which has been about a decade and a half in the last ten years, Brazilian consumption of corn has gone from 2% to 17%. It’s not a small move. Everybody’s like, oh, they always had ethanol. Like, yeah, it’s sugarcane based.

Chuck Magro, CEO, Corteva: It was all cane based. Yeah.

Chris, Analyst: So it’s a pretty fascinating topic. So when we take a step back and look at, you know, depart from ag policies, the one issue that I’m gonna knock on wood before I bring it up has been you know, the one issue that has been driving some uncertainty has been tariffs.

Chuck Magro, CEO, Corteva: Yes.

Chris, Analyst: You’ve had this with China. You’ve had this with Europe. You had it with Mexico. It seems to be alleviating if I do so myself. But, know, how has Corteva been prepping for that?

I mean, you seem to be taking a pretty balanced, methodical approach and just being ready for whatever curveballs are thrown at you. But could you just give us an update where we stand today, just given all the news flow that we’ve had over the last few weeks?

Chuck Magro, CEO, Corteva: Yeah. So David will give you our direct impacts. Go ahead, Dave.

Dave Johnson, CFO, Corteva: So right now where we are, when we take in consideration, you know, all the exemptions, which are pretty difficult to go through all, and our team’s doing a really good job of preparing us for that. And then you look at the ninety day delay that was put in recently. Our impact, we have estimated about 25 to $30,000,000 for ’25. And, Chris, as you know, that’s all CP related. It really is not seed at this point in time.

We feel like that’s definitely a manageable number, certainly manageable within our range of our guide. I think the more important part is when you look at what the CP business did with their supply chains and their footprint and everything they did, you know, three years ago to prepare us for this, I think we’re in a pretty good spot where we’re multisourced on 70% of our imports and this sort of thing. And the teams are doing a really good job of trying to mitigate that 25,000,000 to $30,000,000 We’re also we’ll look at maybe a modest price increase. I think the industry will be looking at that if if this continues. So I think we’re in, you know, pretty good shape whenever it comes to to managing tariffs overall.

And then the other thing to just remind everyone, our two big franchises like Enlist and Spinosyns are actually produced here in The US. So we’re actually in a pretty good spot vis a vis perhaps others, you know, with our supply chain where we manufacture.

Chris, Analyst: One of the other things, and I won’t imply any edge on this, but one of things the investment community, the sell side and the buy side have loved is just the complete pendulum swing from licensee outflows. I don’t wanna get ahead of myself, so I’ll say neutralization. But you’ve been I mean, you’ve already swung about $650,000,000 from peak to roughly where we are today, like $8.50 to 200 ish.

Chuck Magro, CEO, Corteva: That’s right.

Chris, Analyst: Somewhere plus or minus in there. You’ve done incredibly well from the list. You know, now it seems the narrative seems to be shipping a little bit more towards, you know, PowerCore, VorSeed. Obviously, a lot of things that could, you know, replace Chrome over time. And I know I’m missing one.

Concasta, Jenna knows that’s my favorite, obviously, in Brazil. But, you know, how confident are you in that neutralization time line? You already kind of expedited a little bit at your Analyst Day. How are we thinking about that for the next few years? And then also, dare I say a longer term question, can you get that swing into the other side of it where it’s actually an inflow?

Chuck Magro, CEO, Corteva: We absolutely will. And we we can and we will. So you’re you’ve got the numbers, right? We when we started this as a publicly traded company, we were like 800,000,000 in the hole as a net expense, and we’re around 200 now. So we we’ve clawed clawed back about 600,000,000.

And then we originally said we would be neutral by 2030. Now we’re saying 2028, and we feel good in in that bucket of timeline, so for sure. But that that’s just the beginning. Right? That’s just sort of, I think, was always gonna be step one.

Where we’re highly focused and where the team is now turning its attention to is, this is about a $4,000,000,000 market that we really are a modest player when it comes to out licensing revenue, and it’s really separated between the The US and Brazil. And so the the real opportunity for us is to get our fair share of that $4,000,000,000, and that’s gonna take time. But once we get to new neutrality at late this decade, we’ll enter 20 the 2030 decade with, I think, technology that is second to none. And we’ve already got a 100 licensees for both corn and soybean technology today. And so we we know who the players are.

We know how to do this. And the technology is in high high demand. It’s in fact, we’re probably supply limited, not demand limited when it comes to the the out licensing capability that we have. So I I think that this is something that’s got another ten years plus to run, and we will be very disappointed if we don’t get our fair share of that $4,000,000,000 market, which is still growing, by the way.

Chris, Analyst: So what about the other I mean, obviously, it’s always nice to talk about all the traits and all the kind of the payoff of a decade plus of development. You already hit on the wheat side of it. But could you also hit on some of the double cropping, the short stature corn, some of the other kind of pieces of the base business in terms of just creating that second to none, I’d say complex for your, you know, farmers?

Chuck Magro, CEO, Corteva: Yep. So, on reduced corn, very excited about the potential, the technology. For those that aren’t, sort of familiar with it, it’ll be a shorter corn. The reason that’s has advantages is because you had access to the canopy. It will hold up a lot in high high winds.

And the other, I think, magic to this is you’ll be able to plant the crops closer together, so density. So you’ll drive a lot of yield benefits on the farm because you’ll be able to plant the corn crop, closer together. So this is a win win for everyone involved. We have a dual path strategy where we have a conventional bred corn system that’s that’s reduced corn, and we have a gene edited. So as soon as we get freedom to operate with gene edited, we won’t skip a beat, and we’ll be able to, I think, to catapult anything that’s out there.

So that that’s really our philosophy, and we plan to launch, in 2027. So, again, this is right on the doorstep of of a part of our platform. Hybrid wheat, I I talked about, could be a billion dollars of revenue. The system looks phenomenal. We’re our our initial expectation is that growers will see a 10 to 20% yield in in improvement, and I just have to kinda tell you the significance of that.

So, our corn business, we’re we were the first hybrid company in the world about ninety nine years ago, so we’ll turn a hundred years next year. That when when it was first rolled out a hundred years ago, there was no yield improvement, back then. And we’re already seeing a 10 to 20% yield improvement with the first hybrids coming out of our wheat system. That’ll be the worst it ever gets because we’ll just get better with the breeding. So this has a huge potential for growers around the world.

So that that is another thing that we’re very excited about. And then we mentioned I mentioned gene editing capability. As soon as we get freedom to operate, we’ll bring our first corn hybrids out about two years after that, and it is a multi disease protection, in the genetics. We’ve spent enough time with this to know that this is going to be game changing for specifically for corn growers in The United States.

Chris, Analyst: I always joke that, you know, I thank goodness Field of Dreams was filmed back in, like, ’87 because you never would have gotten James Earl Jones or any of those players on the White Sox into the field and short shot satch your corn based on the declining rows. So it’s an ag joke, people. Relax. Alright. So what yeah.

One of the things I’m particularly enthusiastic about and I’ve been enthusiastic about this and Chuck Alsberry, I know the think I know the answer to this, but I really want you to answer for the audience. You know, gene editing has been on our radar screens for years. And every single time one of these crossed my desk for somebody who had a technology when I was at my old employer, I used to say, well, what about Corteva? And every single time there’s somebody with technologies, all roads always led back to you. So the question is it can be very simple and yet complex.

Why do you have the right to win there and how insulated did say is the moment the EU gives that green light, why are you the ultimate winner?

Chuck Magro, CEO, Corteva: Yeah. It’s it’s a great question. So I I actually think that the technology over time won’t be the differentiator, even though we are the largest estate holder for gNetted outside of the country of China. So there’s China, and then there’s Corteva, and then there’s everybody else. So we’ve built a a nice I I I p estate, for for sure.

But I don’t think that that’s gonna be the determining factor for who wins this. I think what’s gonna be determined is, look, gene editing is simply cutting and pasting. I know the scientists hate it when I say that, but as an engineer, that’s as complex as I can get. And so you have to have something to edit. And we have a 100 of germplasm in corn that that we understand better than anybody else in the world.

So I think the material that we’re gonna take to the next level and edit, that’s gonna make all the difference in the world. And and, of course, we’re in a 125 countries, so we we have the channels to the market. And then if you think about I I mentioned pioneers turning a 100 next year. We have the a very unique route to market. Right?

In in The United States, have 2,600 pioneer agents that are independent business owners that work on the farm every day, and all they do is sell pioneer seed. So can you imagine the power of this, if you’ve got the latest and greatest technology, the best germplasm that is a 100 years old, and a channel to market that is unique? I I like our odds of success when it comes to this, but I don’t think the differentiation will actually be the editing itself. In fact, we’re licensing the gene editing technology to anybody that wants to buy it, because we don’t think that that we think commoditizing that to some degree is the right thing to do. The world needs this technology.

We need to see gene edited material on the planet because, like, you probably all know this, but there’s another 2,000,000,000 people that we have to feed by twenty twenty fifty. So it’s a 25% increase in our human population. If you look at the last twenty years, we had the same increase. Right? 25%, but we had to increase land by 10%.

So we we can’t really increase that much land in the next 2,000,000,000 people we need to feed. The only way to do that is to bring the next generation of technology, which I think will be led by gene edited capability.

Chris, Analyst: I always love it when I’m talking about the seed business. It’s one of the few businesses that basic materials analysts cover where certain countries literally have to hide it in seed vaults in Arctic Circle to ensure the heat, you know, can continuity of the human race, God forbid, something bad happens. So it’s a pretty interesting business that I think people still, despite everybody talking about it, underappreciate. So we’re going to dip down to an unpleasant topic and then get back to a positive topic down the presentation. But c p the CPC market has been challenging, Chuck, and I think you’ve gone on every single call, it’s just it’s just undeniable across the industry.

I will say you are in a better position than most for sure. It seems like that’s now, you know, perhaps, dare I say, normalizing North America, Europe, perhaps Asia, you still have some pockets of issues, Latin America. What’s your current assessment of the marketplace right here, right now?

Chuck Magro, CEO, Corteva: Yeah. So this will be the third year where it’s been sort of uninspiring. Right? And we won’t sugarcoat it. It it’s been a tough couple of years for the industry and then, of course, for our business.

I’d say 2025 is certainly looking better than ’24 and 2023, and what we’re seeing is healthy volume. So the channels seem to be functioning relatively normal. Yes, there’ll be pockets, as you called out. But generally speaking, I’d say that within the kind of the realms of normality, the CP business is back to normal. Where we’re what we’re still facing though is is low single digit price pressure.

And that’s coming from a whole host of areas including, you know, that we’re still seeing elevated generics. So it’s it feels a lot better than what we saw from a price perspective the last two years. But when we did give our our recent earnings, we said, look, we thought that that we were gonna see low single digit pricing until the first half of this year. Now we’re thinking that’s gonna persist for the rest rest of the year. That’s all built into the the communication that we gave.

There’s nothing new here, but it would be nice to see the pricing turn positive eventually, and eventually it has to. In fact, when you go back in our history as an industry, you really don’t see three continuous years of price declines. It’s extremely unusual for our industry. But I’m not here prepared to say, expect that in this quarter or this year because I I think that we have to see if this is structural or cyclical. My opinion right now is that this is still purely supply demand, and so it would not be a structural change.

In fact, on farm demand for crop protection is flat to modestly up. So growers are using the products the way they they they need them. And that that is something that we can’t forget. Right? We’ve seen a lot of noise when it comes to the crop protection market, but the behavior on the farm has not changed.

These are still core products which they need to grow that crop, and they’re using it the way they should.

Chris, Analyst: I think the I think the temporary on farm storage post COVID or during COVID and the the evolution of the broker market during that same time when people are trying to clear their balance sheets, I think, threw people off. But I’m glad to hear it seems like it’s certainly in the right direction. One quick clarification on that, Chuck, just in terms of pricing expectations. I mean, guidance basically still implies that pricing will be slightly down in the second half. That’s still the best way to think about it.

No change of thought process.

Dave Johnson, CFO, Corteva: No change right now.

Chris, Analyst: Got it. Okay. Clear. One of the other things you’ve been doing behind the scenes, just going just continuously going back to this thesis of not being complacent at all, you have two things that could potentially help margins outside of price and mix. One is you’re being much more effective with your capacity, closing Pittsburgh, And then obviously, being more optimizing your manufacturing, I’d say, holistically around that.

And then also on the cost side, it seems like you’re getting some benefits. And I know that’s a little bit tougher because you only turn inventory two times a year, so it’s a little bit tougher. But just can you just give us the latest and greatest on, you know, how you’re thinking about that? Is everything kind of in line with how you’re thinking about it? Perhaps a little bit better?

Dave Johnson, CFO, Corteva: So when you step back and look at what we expected for like our net cost improvements for the year, We’re about $400,000,000 this year, which is a significant number and a lot of that is self help. So in CP, we’ve been on a little bit of a journey on footprint rationalization, kind of going through all those restructurings and what have you. We expect that to add of that 400, like a $100,000,000 of incremental benefit in 02/2025. So a pretty significant piece. And then you look at on the seed side, is about half again of that 400,000,000 for this year, it’s all about efficiency and how we produce seed.

About half of the COGS is actually the underlying commodity itself, but there’s a whole another half of logistics and packaging and all these sort of things that I think the teams are now starting to use actually artificial intelligent models to where they’re able to go a little bit more efficient. And so I think over time, we’re going to see that really benefit seed and then CP is on this continuous journey. If you step back, Chris, and look at our three year horizon, we had a billion dollars of EBITDA improvement, dollars 700,000,000 of it is this net cost. So we’re seeing it not only in this first year, but we do expect it to continue in ’26 and ’27.

Chris, Analyst: The other thing I wanted to add on to Crop Protection is about three weeks ago, a press release came out from one of your competitors, FMC, with its new product Flindapir, which is a substantial portion of its second half growth. And essentially, you’ll be I know this isn’t the right term, but redistributed in The U. S. Market just given your breadth and access to the marketplace. Could you just perhaps, for those unfamiliar with these types of agreements, hit on why you would, in perception wise, a competitor even though we know you wouldn’t do it if it wasn’t helpful to Corteva.

Perhaps that, and just how that ultimately helps your holistic offering in the marketplace.

Chuck Magro, CEO, Corteva: Yep. Sure. So, look, this is the definition of standard in our industry. I don’t know how else to say it. Right?

We we all none of us it’s a very competitive industry. We all have great products, and so if there’s something out there that is new, we wanna get access to it, and there’s licensing and cross selling agreements across the board because that’s good for farmers. When I look at this specific agreement, what I’d say is I I think it’s a win win for for both companies and for farmers. Look, for for us, we’re gonna get an interesting new product. We’ll be able to put in front of our, specifically, our our corn growers, and it it has to do with the three way fungicide market, which is a good market for us.

And we it’s complementary to the rest of our product slate that we are currently selling. So I think for us, it’s great. For for FMC, they they get access through the Pioneer network, our corn growers, so it opens up a bit of a market for them. So this is one of these definitions where I think it’s good for FMC, it’s good for Corteva, and it’s good for growers. But this is very standard.

We don’t usually make a lot of noise around these things because they happen very frequently, and and they’re usually incrementally beneficial for both companies.

Chris, Analyst: With the minutes we have remaining, capital allocation has been a big topic, I’d say, since, I guess, once again, six birthdays. You’ve guided to about 40% to 45% of cash. Two part question. First of all, is that just do you think that’s just the intermediate long term run rate? We all know you’ve been here nine months and you didn’t want to over prosper and deliver, and we certainly appreciate that.

At the same time, I’ve highlighted, and if I’m wrong on this, please call me out, but I like to highlight just, hey, a lot of cash turns hands between January and the December versus the December, whether it’s The US and early pay savings and Corteva cash, you know, things or the Brazilian marketplace. I tend to think that gives you a reason to have enable yourself some leeway there. How should we be thinking about that?

Dave Johnson, CFO, Corteva: Very complicated question, actually. But when you step back and you look at the 40 the 45%, we feel comfortable with that, Chris. I think last year, we were at a 50% conversion. One of the reasons for that is we did have a tailwind of working capital. So we did work our our inventories down, adjusting again to the CP market and and that sort of thing.

I think this year, we started off very well, and and so I think over a three year period of time, 4045% is good. We could, as we grow EBITDA, start to work that up slightly because you’re actually mixing up because we won’t need all the working capital and all that sort of thing when you have that incremental billion dollars of EBITDA. So I think that’s that’s very much a positive. The the one thing on forecasting the cash flow, to your point, for those, we do get a lot of cash very much at the very end of the year, which is this cash credit mix with farmers. So we could do a terrific job the first ten months and we could miss it on those last couple of months.

So I think maybe we’re a little conservative, but I think it’s prudent to be that way to see kind of how the year unfolds. But so far, a good start to the year. And I think the teams, again, going back to self help and what we do, are doing everything possible. We’ll be very efficient in the way we manage our working capital investment in general.

Chris, Analyst: Obviously, you’ve done some M and A, you’ve done some buybacks, you have a pretty healthy authorization. I think I have a lot of confidence in Dave’s ability to get to the high end of that range, so perhaps you have a couple extra bucks in the bank. When we take a step back and we look at your share performance, you know, some, let’s say, growth opportunities, you’ve been very big in plant health, biologicals, how should we weigh how your what’s in your thought process on share buybacks versus, you know, tuck tucking in bolt in M and A?

Chuck Magro, CEO, Corteva: Yeah. So look, I I think when I look step back and look at the company, we got an a rated balance sheet and we’re generating a lot of cash. We can argue on the fringes, but that’s gonna continue. And so we’re gonna have the financial horsepower, I I think, to do it all. We’ve also raised our dividend 30% since nobody talks about the dividend.

Amazing. But on a basis, it’s it’s relatively small, and we bought back $4,000,000,000 of stock in the last four years or so. So that’s pretty remarkable. And I think, again, when when you look at the priorities for capital is we want to return capital to shareholders where it makes sense, but our overall focus is just maximum long term value creation. We also raised the amount worth investing in r and d because we were when I first joined Corteva, we were investing too little.

And I wanted to accelerate the seed portfolio, so we we put more money into that and we raised it to 8 percent of our revenue. I think over time, that’s gonna prove to be the right decision. Now, you’re asking about inorganic growth. We’re always on the lookout for ways to use the balance sheet inorganically, but it has to be the right deal that that aligns with our strategy. And the areas that we kind of are looking at are they won’t surprise you.

Right? So biologicals, gene editing capabilities, anything where we can acquire the next generation of capability where Sam Effingham says, well, I can develop it, but it’s gonna cost more. We’re always looking at build versus buy, especially around our technology portfolio. We’ve got a great organic machine. The last three or four years now, we’ve built a great or inorganic m and a team.

And I think that the two deals we have done, Symborg and Stoller, I I think they’ve proven so far to be the the right acquisitions at the right time for the right price. And we would be very excited if we can find a few more of those.

Dave Johnson, CFO, Corteva: I think also our Catalyst program too is another one where, you know, last couple, three years getting some muscle memory around that and making small investments in in multitudes of technology will pay off over time.

Chris, Analyst: I have a friend who’s portfolio manager, and he always tells me, he’s like, tell Corteva to get the dividend yield up. Tell them to get up. I said, it’s not their fault. The stock keeps going up. I think he needs 1.6% over the S and P is.

So it may be a little tough draw this year, but, you know, we can get it there. Final question, Chuck. You know, we we’ve known each other a long time. Dave, it’s been a pleasure working with you. I’m really glad you could attend today.

But, you know, there’s always things, the sell side and less so the buy side, of course. We’ll blame the sell side that investors miss about the story. And you’ve been very transparent. You had a great event last November, and I think we’re particularly enthusiastic about that. But is there one are there one or two things you think the sell side is still missing?

Like, why isn’t XYZ sell side or writing about this? Why am I not getting a question on the call about this?

Chuck Magro, CEO, Corteva: Yeah. Look, I I think in the first few years of Corteva, like, didn’t have the fifteen years of of performance. So people were wondering, can they generate the right numbers with sub $4 or or sub $4.50 corn? And I think we’ve proven. So check, yeah, look, the company is doing okay, with kind of moderate, crop pricing.

The other thing is, look, when we first joined, we had this big gap in our margins. So over the last six years now, the the margins are up something like 600 basis points, and there’s not a lot of daylight now between us and everyone else. So check that box. So I I think it was really the blocking and tackling of the company, standing it up as a publicly traded company. All that, I think the market’s gotten.

I think where the market is missing right now, and we’re starting to talk about it, is the growth potential beyond 2027. I know that we’ve put 2027 financial targets out there, but there is a probably a decade or longer of of what I would consider to be really interesting technology growth from gene editing, biologicals, hybrid wheat, out licensing of our general seed portfolio, all these things. And that is it’s gonna take a little bit of time for the market to say, yeah, can build that in. But some of these things are going like, usually when a science company says, we got this great product, come back and see us ten years from now. Right?

Because it takes that long in our industry. We’re talking about hybrid wheat. It’s launching in 2027 in The United States. I was in Canada. Farmers were saying, Chuck, why are you gonna wait to bring it up to Canada?

We want it now. So, look, I I do think that we’re on the doorstep here with these new technologies in 2027, 2028, 2029. Once the market starts to get comfortable that that timeline is gonna hold, I think we become a growth story.

Chris, Analyst: Thank you very much. Always a pleasure, gentlemen. Thank you. You.

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