Corteva(CTVA) - 2024 Q4 - Annual Report

Business Strategy and Operations - The company began accelerating the ramp-up of the Enlist E3 trait platform in its soybean portfolio in 2019, significantly reducing the use of Roundup Ready 2 Yield and Roundup Ready 2 Xtend traits starting in 2021[40] - The company has a unique Pioneer agency model that allows direct sales to farmers, providing real-time insights into customer ordering decisions[42] - Corteva's supply chain strategy includes managing global supplies of active and intermediate ingredients with a robust and flexible global footprint to support future growth[51] - The company focuses on customer-driven innovation to enhance seed product quality and has invested in data digitization and analytics to improve responsiveness to customer needs[44] - The Crop Protection segment is a leader in global herbicides, insecticides, nitrogen stabilizers, and biologicals, contributing to overall crop health[46] - The company operates 96 production sites globally, with 47 in North America, 20 in EMEA, 21 in Latin America, and 8 in Asia Pacific[172] - The company has a significant presence in the seed business, with 63 seed production sites globally[172] Financial Performance - The company reported net sales of $16,908 million for the year ended December 31, 2024, a decrease of 2$17,226 million in 2023, driven by a 1% decrease in price and a 3% unfavorable currency impact, partially offset by a 2% increase in volume[210] - Cost of goods sold (COGS) totaled $9,529 million, down from$9,920 million in 2023, primarily due to favorable currency effects and ongoing cost and productivity actions[210] - Income from continuing operations after income taxes was $863 million, compared to$941 million in 2023[210] - Operating EBITDA was $3,376 million, slightly down from$3,381 million in 2023, primarily due to competitive pricing in Crop Protection and continued investment in Seed R&D[210] - The company returned approximately $1.5 billion to shareholders in 2024 through share repurchase programs and common stock dividends[210] - The company expects to contribute approximately$40 million to its pension plans other than the principal U.S. pension plan, and about $105 million for its other post-employment benefit plans in 2025[132] - Corteva's liquidity could be impaired if it is unable to raise capital through the capital markets or short-term debt borrowings, which could negatively affect its financial condition[128] Competition and Market Environment - The company faces intense competition in the seed germplasm and crop protection market, competing with major players like BASF, Bayer, FMC, Syngenta, and ChemChina[68] - Corteva faces intense competition with increasing product availability and the risk of revenue loss from patent expirations, which could adversely affect its business[100] - The company is subject to extensive environmental regulations, which could result in significant costs or liabilities due to compliance failures or changes in regulations[93] - Climate change and unpredictable weather factors could negatively impact Corteva's sales and earnings, affecting crop protection product demand and seed supply chains[97] - Disruptions in the global economy due to geopolitical conflicts, such as the Russia-Ukraine war, have negatively impacted Corteva's supply chains and increased costs for materials and transportation[103] Regulatory and Compliance Challenges - Regulatory approval processes for genetically modified organisms (GMOs) are becoming increasingly complex, leading to longer approval timelines and higher development costs[71] - The company must periodically renew its approvals for biotechnology and crop protection products, which can be lengthy and costly, impacting sales and profitability[83] - The company continues to invest in keeping regulatory dossiers current and responding to evolving standards, which is essential for maintaining market access[71] - Concerns regarding the safety of biotechnology products may affect public perception and regulatory approvals, impacting sales and operational results[91] - The regulatory environment may be influenced by non-governmental organizations and public sentiment, potentially leading to increased scrutiny and compliance costs[85] Risk Management - The company actively manages risks associated with cybersecurity and supply chain disruptions, which could materially affect its operations and reputation[114] - The company faces risks from various litigation matters, including product liability and environmental lawsuits, which could materially affect its financial results[119] - Corteva's reliance on third parties for raw materials and commercialization could negatively impact its ability to develop and market new products[122] - The company anticipates that adverse outcomes in litigation could result in losses not fully covered by insurance, potentially affecting its financial results[119] - The company is engaged in a dispute resolution process with DuPont regarding tax indemnification liabilities, which could affect its financial standing[157] Employee and Corporate Culture - The company employs approximately 22,000 employees globally, with a diverse workforce composition across North America (47$1,402 million (8% of net sales) in 2024 from $1,337 million (8$61.42 per share, with a remaining buyback authorization of $3.5 billion[198] - The company authorized a$3 billion share repurchase program on November 19, 2024, with no expiration date[222] - In 2024, the company paid a total dividend of $0.66 per share, an increase from$0.62 in 2023[197]