Corteva Inc

The company operates in two reportable segments: Seed and Crop Protection.

Seed

The company’s seed segment is a global leader in developing and supplying advanced germplasm and traits that produce optimum yield for farms around the world. The segment is a leader in many of the company’s key seed markets, including North America corn and soybeans, Europe corn and sunflower, as well as Brazil, India, South Africa and Argentina corn. The segment offers trait technologies that improve resistance to weather, disease, insects and enhance food and nutritional characteristics, herbicides used to control weeds, and digital solutions that assist farmer decision-making to help maximize yield and profitability.

Crop Protection

The crop protection segment serves the global agricultural input industry with products that protect against weeds, insects and other pests, and disease, and that improve overall crop health both above and below ground via nitrogen management and seed-applied technologies. The segment offers crop protection solutions and digital solutions that provide farmers the tools they need to improve productivity and profitability, and help keep fields free of weeds, insects and diseases. The segment is a leader in global herbicides, insecticides, nitrogen stabilizers, pasture and range management herbicides and biologicals.

Summarized below are comments on individual segment net sales and segment operating EBITDA for the three months ended March 31, 2024 compared with the same period in 2023. The company defines segment operating EBITDA as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, corporate expenses, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and OPEB credits (costs), tax indemnification adjustments and environmental remediation and legal costs associated with legacy EIDP 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. See Note 18 - Segment Information, to the interim Consolidated Financial Statements, for details related to significant pre-tax benefits (charges) excluded from segment operating EBITDA. All references to prices are based on local price unless otherwise specified.

A reconciliation of segment operating EBITDA to income (loss) from continuing operations after income taxes for the three months ended March 31, 2024 and 2023 is included in Note 18 - Segment Information, to the interim Consolidated Financial Statements.

Seed

Seed net sales were $2,751 million in the first quarter of 2024, up 2 percent from $2,695 million in the first quarter of 2023. The sales increase was driven by a 6 percent increase in price, partially offset by a 2 percent unfavorable currency impact and a 1 percent decline in both volume and portfolio and other.

Price gains were driven by strong execution globally, led by EMEA, as farmers prioritize the use of top technology to drive higher yields. Volume gains in North America from higher corn deliveries were offset by volume declines in EMEA due to delayed demand from unfavorable weather. Unfavorable currency impacts were led by the Turkish lira.

Segment operating EBITDA was $748 million in the first quarter of 2024, an improvement of $96 million from $652 million in the first quarter of 2023. Price execution, improvement in net royalty expense and ongoing cost and productivity actions more than offset higher commodity and production costs and the unfavorable impact of currency. Segment operating EBITDA margin improved by approximately 300 basis points versus the prior-year period.

Crop Protection

Crop protection net sales were $1,741 million in the first quarter of 2024, down 20 percent from $2,189 million in the first quarter of 2023. The sales decrease was driven by an 18 percent decrease in volume, a 3 percent decrease in price and a 1 percent unfavorable currency impact, partially offset by a 2 percent favorable impact from portfolio and other.

The decrease in volume against a strong prior year comparison was primarily due to farmer purchases closer to the application window, as well as weather and destocking impacts in EMEA. Price declines in North America and Latin America due to competitive market dynamics were partially offset by pricing gains in EMEA to largely offset currency. Unfavorable currency impacts were primarily related to the Turkish Lira.

Segment Operating EBITDA was $310 million in the first quarter of 2024, down $293 million from $603 million in the first quarter of 2023. Volume declines and unfavorable mix, pricing pressure, the unfavorable impact of currency, and raw material cost inflation, more than offset productivity actions. Segment operating EBITDA margin contracted by more than 970 basis points versus the prior-year period.