Corteva, Inc. (NYSE:CTVA) Q4 2022 Earnings Call Transcript

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Dave Anderson : Sure. Q4 is one that played out really in South America for us and Latin America. As you look at the big volumes, we had a strong Northern Hemisphere with Enlist continuing to go to fill tanks and took over a lot of tanks this Q4. But in Latin America the drought is really bad. When it comes to Argentina and Southern Brazil and so the fungicide growth that we typically would see there we thought we would see didn’t come through just wasn’t in demand. And so that’s really what the difference was in Q4 when you look at volumes. The other thing, I would mention is roll back to Q4 2021 Brazil had mid-20s growth in that quarter alone and so had a huge mountain to compare against as well when you begin to look at Q4 versus Q4.

Operator: And we have a question from Steve Byrne with Bank of America.

Unidentified Analyst : Yes. Thank you very much. This is filling in for Steve. Just wanted to ask about the settlement charges you’re taking on Lorsban. I think this was the third quarter this year that you took a charge. And given that can you start providing commentary on what you expect next year for any charges? And what is — as we think about that I think $7 million this year what is the cash flow impact from these settlements? Are they mostly for future cash flow impacted? Have you already paid the settlement? How should we think about that?

Dave Anderson: Yes. This is Dave. So as we — as you know we really have not provided — cannot provide any kind of forward view. There’s just no estimate that’s available that would allow us to do that. We do — we’ll have an $87 million charge for the full year of 2022. There’s just at this time limited forecast visibility as to what that would translate to in terms of 2023 and we’ve really just not prepared to comment on that. In the same way on the cash side, I mean, I think that’s very, very much a TBD. We’ll obviously update as actuals occur and actuals progress.

Operator: And our next question will come from Frank Mitsch with Fermium Research.

Frank Mitsch: Yes. Good morning. I wanted to follow up on the Crop Protection Chemical. Growth that you saw in new products, obviously, that was a nice success story for 2022. The original guidance was for $300 million increase in 2022 and you came in at $475 million and you’re guiding again for $300 million in 2023. So I’m wondering what went right in 2022? And what could go right in 2023, or what could go wrong in 2023?

Dave Anderson: Frank, thanks. Hopefully more goes right than wrong in 2023. But as you begin to look at new products, yes, we had a great year finishing up about $1.9 billion for the year in the sales of those products. And as you stated there $475 million increase. The strengths around it really centered around three big molecules that led this. Enlist primarily with the demand that we’re following with Tim in the seed. And we’re 80-plus percent at our last estimate now of acres over-the-top spray with Enlist. Arylex in Latin America — excuse me in Europe was a strong performer as well. And as you know this herbicide is one that has a growing demand also. And then finally I would say our insecticide of Inatreq was the third one that was a standout there that helping us grow this.

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