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

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And again pricing I was in Europe last week and our pricing is holding well in the marketplace and great implementation. You think about exposure for the rest of the year on seed. Latin America we’re still in the field, producing our seed in Brazil especially but also Argentina. And so we have a little bit more exposure if you will in terms of those costs, but obviously we’re working hard and we factor that in I think to our guide so far. And in terms of pricing, we still have flexibility there. We’re not live in the marketplace per se. And so we’re going to continue to evaluate where we’re at there. We got a great track record of capturing value in Latin America and so we believe we’re positioned very well for value — strong value proposition.

Again we’ve got an excellent track record in terms of being able to capture value and confident that we’re going to be able to more than offset what that inflation pressure is.

Robert King: And in Crop Protection, just to add a little bit to that is that we continue to see as I said before mid-single digits inflation that will continue with us. It will be heavier in the first half than the second half, but our price for value strategy and productivity will continue to help offset that. So far we’re seeing good progress in all of our markets with what we’re doing and what we’re going to market with. And the other thing I’d say is just a comment that one of the key indicators for us is what’s going on in the generic market and how is pricing holding there. And all the leading generic producers have come out and said that prices are stable for the first half of the year from what they can see so far. And so that’s always a good indicator for us as well as what’s price going on there. So we expect we can offset the cost using the same strategy that we’ve used in the past for Crop Protection.

Operator: And our next question will come from Joshua Spector with UBS.

Unidentified Analyst: Good morning. This is Lucas on for Josh. I just wanted to go back to the path for the 2025 targets. So, looking at your EBITDA for this year, I mean that seems to be progressing pretty ratably. You sort of highlighted why your free cash flow is going to be depressed in the next year. So you’re kind of looking at like a mid-30s conversion versus the 55 to 75 target. So could you just kind of help us bridge how the free cash flow is going to converge there towards the target range? And if you see any risk there now given it’s sort of more back weighted versus what’s happening with EBITDA.

Dave Anderson: I think I would just comment that we’ve got on a year-over-year basis, obviously, those additional headwinds that I mentioned to you. The other thing that I would mention is that we will get the cash contribution over time from acquisitions. It’s not going to be significant, but it will be important to the overall equation. But the other thing is just the growth in EBITDA that’s going to occur over that period of time. So, we also see some call it improvement as we look to more normal patterns in terms of the cost and inflation issues and some of the supply chain issues that we’ve been dealing with and the industry have been dealing with in general. All of those are going to be able to be contributors towards the targets that we’ve talked about. And by the way just to reinforce again, the 2022 performance combined with the 2022-2023 guide is again a very important statement we think we’re making about the attainment of those 2025 numbers.

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