Dave Anderson
Executive Vice President and Chief Financial Officer at Corteva
Thanks, Chuck. And welcome everyone to the call. Let's start on slide seven, which provides the financial results for the quarter and the half. As Chuck said and as you can see from the numbers we've started the year strong quickly touching on the quarter, organic sales increased 13% compared to 2021, with gains in both segments and all regions. This translated into earnings growth of 18% and margin improvement of more than 150 basis points, another solid quarter of continued growth and margin expansion and I think differentiating Corteva in this environment.
Now focusing on the half, organic sales grew 14% over prior year, with broad-based price and volume gains. Global pricing was up 9% with notable increases in both Seed and Crop Protection. Volume growth in crop protection of 16% was driven by strength of new products, which delivered approximately $400 million of sales growth year-over-year, an increase of more than 60%. We delivered $2.8 billion in operating EBITDA on the half, a 17% increase from the same period last year. This is noteworthy given the continued inflation of raw and energy costs, commodity price volatility and the war in Ukraine.
Pricing and productivity, more than offset the higher cost incurred, as well as an approximate $200 million currency headwind driven predominantly by European currencies. This improvement translated into almost a 130 basis points of margin expansion year-over-year. Let's go to slide eight, where you can see the broad-based growth with strong organic sales gains in every region.
In North America, organic sales were up 9% driven by crop protection on demand for new technology including Enlist herbicide. Seed volumes were down versus prior year primarily primarily due to a reduction in US corn acres and supply constraints in canola. Soybean volumes were up 4% versus prior year, driven by continued penetration of Enlist. Both segments delivered pricing gains with corn and soy up 6% and 7%, respectively, and double-digit pricing gains in Crop Protection, more than offsetting higher input costs.
In Europe, Middle East and Africa, organic sales increased 19% compared to prior year, driven by both, price and volume gains, again in both segments. It's an impressive performance by the organization considering the impact from the war in Ukraine and the recent dry weather condition in parts of Western Europe. Seed pricing increased 12% and helped to mitigate currency impacts. And for Crop Protection, demand remains high for new and differentiated products, driving volume growth of 15% year-over-year.
In Latin America, we delivered 31% organic growth with double-digit volume and price gains. Pricing increased 13% compared to prior year driven by our price for value strategy coupled with increases to offset rising input costs. Seed volumes were flat due to tight supply of corn, while crop protection volumes increased 34%. We also had a timing benefit on an early customer demand in Brazil, shifting some forecasted volume into the second quarter.
Asia-Pacific organic sales were up 13% over prior year on both volume and price gains. Seed organic sales increased 24% on strong price execution and the recovery of corn planted area from last year's COVID-related impacts. Crop Protection volume growth of 5% was again led by demand for new and differentiated products.
Let's now turn to slide nine for a summary of our operating EBITDA performance. First half operating EBITDA increased nearly $400 million to $2.8 billion and as I covered on the prior slide, strong customer demand drove broad-based organic growth with price and volume gains in all regions.
On costs, we incurred more than $500 million of market-driven cost headwinds in the half, driven by higher seed commodity costs. Crop protection raw material costs as well as freight and logistics. The company achieved approximately $130 million in productivity savings in the half, which helped to partially offset this impact. Currency, was a $200 million headwind, primarily by European currencies. The organization's focus on meeting increased customer demand, while effectively managing cost headwinds through pricing, product mix and productivity resulted in nearly 130 basis points of margin improvement for the half.
Let's turn now to slide 10, I'd like to expand just a little bit on our cost actions. In connection with the business realignment the Chuck referenced, we've completed a strategic assessment of our priorities and operational structure.
As a result of this assessment, we anticipate incurring restructuring charges on a quarterly basis through the second quarter of 2023 of approximately $400 million. Roughly half of the $400 million of restructuring will result in cash payments and the remaining $200 million is related to long-lived assets, the Russia withdrawal, and some inventory write-off.
This quarter, we recognized $68 million in restructuring and other charges, these charges were primarily a result of contract terminations, a reduction in headcount and a $45 million charge related to our previously announced withdrawal from Russia. We expect additional restructuring and other charges of approximately $325 million over the next 12 months, including charges from headcount reduction and rightsizing our operations and functional support structure.
And finally, and a key point, we expect the restructuring actions will deliver more than $200 million in run rate savings by 2025. More to come on this, but we believe these actions will position us to deliver increased value in both, the short and long term.
Let's go now to slide 11 and talk about the remainder of the year and our updated expectations for 2022. With the backdrop of our strong first half performance, we're raising our reported net sales guidance to be in the range of $17.2 billion to $17.5 billion for the year, representing a 11% growth at the midpoint and includes an approximately 2% to 3% currency headwind.
We are also raising our operating EBITDA guidance to a range of $2.95 billion to $3.1 billion or 17% growth over prior year at the midpoint. This increase reflects continued strong price execution in both segments and all regions, both for our technology in response to rising input costs.
We now anticipate $500 million of year-over-year improvement in sales from our new crop protection products, an increase of $200 million over our original annual assumption driven by strong demand in every region and as we focus on the second half of the year, we expect pricing and productivity to more than offset cost headwinds, which are driven by crop protection raw material costs, seed commodity costs as well as freight and logistics.
Volume growth will be led by crop protection, primarily in Latin America as farmers look to the newest technology to drive productivity on the farm. Seed volumes are expected to be relatively flat in the back half of the year with tight seed supply in Latin America corn and regarding the third and fourth quarter outlooks, we expect the distribution of both revenue and operating EBITDA between the quarters to be consistent with our historic patterns.
The volatility of exchange rates continues to be a key variable that we're monitoring, primarily the Brazilian real, while we are largely hedged for this currency exposure, we currently expect an approximately $15 [Phonetic] million headwind in the second half.
We continue to maintain disciplined spending we anticipate that SG&A as a percent of sales will improve by more than 100 basis points for the full year. Increased customer demand, coupled with the ability to manage cost headwinds through pricing and productivity is expected to result in approximately 100 basis points of margin improvement for the full year at the midpoint.
We're raising our operating EPS guidance to a range of $2.45 to $2.60 per share, a lower share count driven by the $600 million of share repurchases completed in the first half of this year, coupled with strong operating earnings is driving an expected 17% increase in operating EPS year-over-year.
Lastly, we expect free cash flow to be in the range of $1 billion to $1.3 billion, lower than our earlier assumption of $1.3 billion to $1.6 billion. The change is led largely by higher accounts receivable balances on higher revenue. Despite the increase in working capital balances all working capital metrics including days sales outstanding receivables and our inventory day's supply continue to be strong.
Let's now go to slide 12, just to summarize a few key takeaways. It's clear that our organization, as Chuck has said, is executing very well. We're obviously very pleased with the strength of the first half results. This momentum gives us confidence to raise our full year revenue and earnings guidance and we've taken very important steps in our strategic road map to accelerate operational performance, and drive continued operating EBITDA margin expansion, we've completed comprehensive portfolio reviews, we're taking cost actions to support our strategic priorities and our performance outlook.
And finally, we plan to maintain our track record on capital deployment with our recently announced 7% increase in the dividend, and we expect to complete approximately $1 billion in share repurchases for the year. So, we're excited to share more about this at our upcoming investor event.
And with that, Kim, I'll turn it over to you.
