Corteva (CTVA) Q4 2023 earnings summary

Executive summary

• FY 2023 net sales declined 1% to $17.226B; organic sales fell 3%. Operating EBITDA rose 5% to $3.381B and Operating EPS increased 1% to $2.69.

• Seed strength, pricing, productivity and cost discipline supported earnings despite Crop Protection destocking, Brazil market pressures, product exits and currency headwinds.

Financial highlights

• FY 2023 income from continuing operations after tax was $941M versus $1.216B; GAAP EPS was $1.30, down 22%.

• FY 2023 cash from continuing operating activities was $1.8B, up 98%; free cash flow was $1.214B.

• Q4 net sales fell 3% to $3.707B and organic sales declined 8%; GAAP loss from continuing operations was $231M versus $41M.

• Q4 Operating EBITDA rose 4% to $386M and margin increased 74 bps to 10.4%; Operating EPS was $0.15 versus $0.16, and GAAP EPS was -$0.33 versus -$0.06.

Outlook and guidance

• FY 2024 net sales guidance is $17.4B–$17.7B, up 2% at midpoint; Operating EBITDA guidance is $3.5B–$3.7B, up 6%, with ~90 bps of margin improvement.

• FY 2024 Operating EPS guidance is $2.70–$2.90, up 4% at midpoint; higher earnings are partly offset by interest expense and a higher base tax rate.

• FY 2024 continuing operating cash flow guidance is $2.1B–$2.6B; free cash flow guidance is $1.5B–$2.0B, with ~50% free-cash-flow-to-EBITDA conversion at midpoint.

• FY 2025 Operating EBITDA outlook is $3.9B–$4.4B, with a 21%–23% margin; drivers include Seed growth, Crop Protection rebalancing, royalty gains and productivity.

• 2024 guidance assumes no extreme weather, operational disruptions, material shifts in demand or customer payment capacity, or further acceleration of currency and inflation impacts.