Deere & Company · NYSE:DE
Deere & — Q1 2021 Earnings Presentation
26 slides from Deere &'s earnings presentation, Feb 19, 2021
Slide 1: 1Q 2021 Earnings Call
1Q 2021 Earnings Call 19 February 2021
Slide 2: Safe Harbor Statement & Disclosures
Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the company’s plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acce
Slide 3: 1Q 2021 Results
1Q 2021 Results ($ millions except where noted) Net Sales & Net Sales Net Income Diluted EPS (Equipment Operations) (attributable to ($ per share) Revenues Deere & Company) $9,112 $8,051 $1,224 $7,631 $3.87 $6,530 $517 $1.63 1Q 2020 1Q 2021 1Q 2020 1Q 2021 1Q 2020 1Q 2021 1Q 2020 1Q 2021 19% 23% 137
Slide 4: New Segment Reporting
New Segment Reporting BUSINESS PRODUCTION AND SMALL AG AND TURF UNITS PRECISION AG PRODUCTION Corn and Soy Small Grains Dairy and Livestock High-value Crops SYSTEMS Sugar Cane Cotton Turf and Compact Utility Large Tractors Sprayers Small Tractors Commercial Mowing Combines Seeding Hay and Forage Uti
Slide 5: Production and Precision Ag
Production and Precision Ag 1Q 2021 Results $ in millions Net Sales 22% Operating Profit Comparison $90 $15 $3,069 $196 ($55) $6 ($38) $26 $643 $2,507 $185 $218 1Q 2020 1Q 2021 1Q20 Volume/ Price Currency Warranty Production SA&G/ Special Other 1Q21 Mix Costs R&D Items 5 John Deere | 1Q 2021 Earning
Slide 6: Small Ag and Turf
Small Ag and Turf 1Q 2021 Results $ in millions Net Sales 27% Operating Profit Comparison $21 $33 $2,515 $8 ($17) $14 $112 $5 $469 $1,979 $138 $155 1Q20 Volume/ Price Currency Warranty Production SA&G/ Special Other 1Q21 1Q 2020 1Q 2021 Mix Costs R&D Items 6 John Deere | 1Q 2021 Earnings Call | Febr
Slide 7: Ag & Turf Industry Outlook – FY 2021
Ag & Turf Industry Outlook – FY 2021 U.S. & CANADA U.S. & CANADA EUROPE AG LARGE AG SMALL AG & TURF 15-20% ~5% ~5% SOUTH AMERICA AG ASIA AG (tractors and combines) ~10% Slightly Source: Deere & Company forecast as of 19 February 2021 7 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 8: Production and Precision Ag Business Segment Outlook
Production and Precision Ag Business Segment Outlook FY 2021 FORECAST Net Sales Operating Margin $15.5-16.5B 19.5-20.5% Source: Deere & Company forecast as of 19 February 2021 8 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 9: Small Ag and Turf Business Segment Outlook
Small Ag and Turf Business Segment Outlook FY 2021 FORECAST Net Sales Operating Margin $10.5-11.5B 14.5-15.5% Source: Deere & Company forecast as of 19 February 2021 9 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 10: Construction and Forestry
Construction and Forestry 1Q 2021 Results $ in millions Net Sales 21% Operating Profit Comparison $67 ($13) ($2) ($19) $2,467 $41 ($21) ($13) $2,044 $135 $268 $93 1Q 2020 1Q 2021 1Q20 Volume/Mix Price Currency Warranty Production SA&G/ Special Items Other 1Q21 Costs R&D 10 John Deere | 1Q 2021 Earni
Slide 11: Construction and Forestry Industry Outlook – FY 2021
Construction and Forestry Industry Outlook – FY 2021 NORTH AMERICA NORTH AMERICA COMPACT GLOBAL FORESTRY CONSTRUCTION EQUIPMENT CONSTRUCTION EQUIPMENT ~5% ~10% 5-10% Source: Deere & Company forecast as of 19 February 2021 11 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 12: Construction and Forestry Business Segment Outlook
Construction and Forestry Business Segment Outlook FY 2021 FORECAST Net Sales Operating Margin $10.5-11.0B 10.5-11.5% Source: Deere & Company forecast as of 19 February 2021 12 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 13: Financial Services Net Income - Results and Outlook
Financial Services Net Income - Results and Outlook Quarter Results Fiscal Year Forecast $204 $730 $566 $137 1Q 2020 1Q 2021 FY 2020 FY 2021 Fcst Source: Deere & Company forecast as of 19 February 2021 13 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 14: Deere & Company Outlook
Deere & Company Outlook FY 2021 FORECAST Net Income Effective Net Operating (attributable to Deere & Co.) Tax Rate* Cash Flow* $4.6-5.0B 24-26% $4.6-5.0B *Equipment Operations Source: Deere & Company forecast as of 19 February 2021 14 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 15: A Model for Sustainability
A Model for Sustainability IMPROVED OUTCOMES DRIVEN BY EXISTING TECHNOLOGIES FUEL FERTILIZER SOYBEANS SAVED REDUCED SAVED HERBICIDES SEED CORN EMISSIONS REDUCED SAVED AVOIDED One farm can achieve lower GHG emissions equivalent to nearly $40/acre 1,000,000 ECONOMIC VALUE passenger vehicle TO OUR CUST
Slide 16: Building Better Infrastructure
Building Better Infrastructure EARTHMOVING – GRADE CONTROL IMPROVED OUTCOMES DRIVEN BY EXISTING TECHNOLOGIES LESS EMISSIONS REDUCED MATERIALS AVOIDED FUEL USED USAGE 1,900 TONS LESS ASPHALT used on an annual basis per machine ROADBUILDING – COLD-IN-PLACE RECYCLING ROADWAY LESS EMISSIONS LIFE MATERIA
Slide 17: Operating our Business in a Sustainable and Socially Responsible Manner
Operating our Business in a Sustainable and Socially Responsible Manner OCCUPATIONAL SUSTAINABLE INCREASE SAFETY ENERGY USE RECYCLING PRODUCT PRODUCT COMMUNITY SUSTAINABILITY INNOVATIONS INVESTMENT 17 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 18: Appendix
Appendix 18 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 19: Other Financial Information
Other Financial Information Equipment Operations FY 2021 ($ millions) 1Q 2021 Forecast COS (percent of Net Sales)* 72% ~73% SA&G* 3% ~4% Research and Development* 14% ~2% Capital Expenditures ~ $900 Pension/OPEB Expense ~ $140 Pension/OPEB Contributions ~ $950 *As reported (including Employee Separa
Slide 20: January 2021 Retail Sales and Dealer Inventories
January 2021 Retail Sales (Rolling 3 Months) and Dealer Inventories Retail Sales U.S. and Canada Ag Industry* Deere** 2WD Tractors (< 40 PTO hp) 37% Less than the industry 2WD Tractors (40 < 100 PTO hp) 26% Less than the industry 2WD Tractors (100+ PTO hp) 8% Less than the industry 4WD Tractors 24%
Slide 21: January 2021 Retail Sales (Rolling 3 Months)
January 2021 Retail Sales (Rolling 3 Months) Retail Sales Europe Ag Deere* Tractors Double digits Combines Double digits Retail Sales U.S. and Canada Deere* Selected Turf & Utility Equipment Double digits Construction & Forestry First-in-the-Dirt Single digit Settlements High single digit * Based on
Slide 22: Deere Use-of-Cash Priorities
Deere Use-of-Cash Priorities CASH FROM OPERATIONS Manage the balance sheet, including liquidity, to support a rating that provides COMMITTED access to low-cost and readily available short- and long-term funding TO “A” RATING mechanisms (reflects the strategic nature of our financial services operati
Slide 23: Segment Reporting Q&A
Segment Reporting Q&A Why is Deere changing segment reporting? The updated segment reporting aligns with the new operating model. While Production & Precision Ag and Small Ag & Turf will continue to collaborate to leverage efficiencies, the business segments will be managed separately to accommodate
Slide 24: We run so life can leap forward.
Sustainability We run so life can leap forward. For additional information please view the 2020 Sustainability Report at: https://www.deere.com/en/our-company/sustainability/ 24 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 25: Deere & Company's 2Q 2021 earnings call
Deere & Company’s 2Q 2021 earnings call is scheduled for 9:00 a.m. central time on Friday, 21 May 2021. 25 John Deere | 1Q 2021 Earnings Call | February 19, 2021
Slide 26: @ JOHN DEERE
@ JOHN DEERE