Corteva, Inc. Q4 FY2025 earnings call

• Separation Update: On track for second half separation, likely in 4Q; global CEO search in progress, SpinCo name and brand identity to be launched in first half, core executive leadership teams announced in latter part of first half, capital structure submissions to credit agencies, Form 10 filings, and Investor Day in mid-September. - 2025 Financial Performance: 2025 was a strong year with low single-digit top line growth, over 20% operating EBITDA margin expansion, Seed Licensing business momentum, Crop Protection volumes driven by new products and biologicals. - Bayer Agreement: Reached comprehensive resolution with Bayer, accelerating seed freedom to operate, royalty neutrality in 2026 (2 years ahead of expectation), acceleration of corn licensing to 2027 (5 years ahead), acceleration of third gen aboveground trait platform in North America corn to end of decade (2 years ahead), and entry into cotton licensing market in U.S.

Seed Business: Performed well with organic growth in every region and share gains in corn and soybeans. Delivered about $340 million of net cost improvements and $90 million in royalty improvement. Crop Protection Business: Also performed well with top and bottom line growth, margin expansion, and generated over $300 million of productivity and cost benefits for the full year.

• 2026 operating EBITDA midpoint $4.1 billion, 7% growth vs prior year. - Operating EPS range $3.45 to $3.70 per share, increase of 7% at midpoint. - Free cash flow impacted by separation items and Bayer agreement, but absent these, in line with long-term target. - Target about $500 million of share repurchases in first half of 2026.

• Competitive pricing dynamics in some major markets like Latin America and Asia Pacific. - Tariffs with an estimated $80 million impact in 2026. - Regulatory uncertainties, such as in the EU and China regarding gene-edited seeds.

Q: SG&A and R&D increase in 4Q?

A: Charles Magro said R&D increased as percentage of sales to over 8%, SG&A had additional compensation expense. Judd O’Connor said Conkesta in Brazil expected to double or more in 2026.

Q: Crop Protection business patent and new products share in 2026?

A: Robert King said Crop Protection business will remain flat, 2/3 differentiated, with new products and biologicals growing, and [Visa] fungicide launch expected later in 2026.

Q: Major crops market share gains in Seed?

A: Judd O’Connor said North America corn and soy share gains, Latin America summer and safrinha share gains, and positive impacts in almost all regions.

Q: 2026 EBITDA guide and Conkesta impact?

A: David Johnson discussed 2026 EBITDA guide details, including $120 million net royalty benefit and $80 million tariff impact, and Judd O’Connor said Conkesta transition and share increase contribute to Seed earnings growth in Brazil.

Q: Tariff estimation secondary effects?

A: Robert King and Charles Magro said tariff estimate encompasses all companies and countries, with biggest part from CP and China actives into U.S.

Q: $200 million productivity benefits breakdown and ongoing opportunity?

A: Judd O’Connor said $200 million split equally between Seed and CP, and Charles Magro said productivity pipeline healthy with more than $700 million net productivity and cost improvement framework by 2027.

Q: Latin American CP market and farmer credit?

A: Robert King said LatAm CP market expects volume growth with pricing pressures, channels normal, and farmer cash flow tight but barter program near $1 billion for revenue.

Q: Prioritization of new markets in Seed business?

A: Charles Magro said will discuss in detail at Investor Day in September, focusing on core businesses, seed licensing, cotton, gene editing, and hybrid wheat.

Q: Crop Protection market rebound in 2026 and Brazil pricing?

A: Robert King said CP market expects modest growth with volume growth and pricing pressures in Brazil, but differentiated products command higher margins.

Q: Competitive pricing in other markets like North America or Europe?

A: Charles Magro said markets structurally different, generics present in all markets, but Brazil has unique dynamics with China export controls and M&A potentially constructive.