Deere & Company · NYSE:DE
Deere & — Merger or Acquisition (June 2017)
22 slides from Deere &'s merger presentation, Jun 1, 2017
Slide 1: Deere Agrees to Acquire Wirtgen Group
Deere Agrees to Acquire Wirtgen Group 1 June 2017 1
Slide 2: Safe Harbor Statement & Disclosures
Safe Harbor Statement & Disclosures This presentation contains forward-looking information related to Deere, Wirtgen, and the Acquisition that is based on current expectations and involves substantial risks and uncertainties that could cause actual results, performance, events, or transactions to di
Slide 3: The John Deere Strategy
THE JOHN DEERE STRATEGY OUR PURPOSE Committed to those linked to the land GLOBAL AGRICULTURAL — ¢,,GLOBAL OUTPACE rd 25 RLREASEIRATIONS EQUIPMENT soLUTIONs _ CONSTRUCTION INDUSTRY OPERATING MARGIN ASSET TURNS a aaron PREEMINENCE. IN GROWTH (ar MiD-cycte! (AT MIO-CYCLED gro rough innovatior pore and
Slide 4: Transaction Overview
Transaction Overview − Deere to acquire substantially all of the Wirtgen business from Wirtgen family Transaction − Global leader in road construction equipment Description − EUR 2.6 billion in total sales for 2016* − Significantly enhances Deere’s C&F division financial position Transaction − Estim
Slide 5: Strategic Rationale
Strategic Rationale 1 Transaction provides greater exposure to transportation infrastructure, a faster growing, less cyclical sector than broader construction 2 Wirtgen is the global leader in road construction equipment, enhancing Deere’s positioning with key customers 3 Delivers complementary prod
Slide 6: Attractive Industry Fundamentals
Attractive Industry Fundamentals 1 Transaction provides greater exposure to transportation infrastructure, a faster growing, less cyclical sector than broader construction − Attractive margin opportunity with significant growth tailwinds − Road construction AND repair emphasized in many countries, r
Slide 7: Compelling Acquisition
Compelling Acquisition 2 Wirtgen is the global leader in road construction equipment, enhancing Deere’s positioning with key customers − Outstanding strategic asset in growing geographies and sectors of construction equipment industry − Superior brand reputation combined with deep customer relations
Slide 8: The Wirtgen Group – Premium Brands
The Wirtgen Group – 5 Premium Brands Road Technologies Mineral Technologies Milling Machines Concrete Paving Crushers Compactors Asphalt Paving Asphalt Plants 8
Slide 9: The Wirtgen Group – Global Leader in Road Construction
The Wirtgen Group – Global Leader in Road Construction Company Overview & Highlights Financial Summary 4,000 15% Revenue (EUR millions) − The global leader in road construction equipment 3,000 EBIT Margin 10% − Private company headquartered in Germany 2,000 − 50+ years of operating experience 1,000
Slide 10: Complementary Fit with C&F
Complementary Fit with C&F 3 Delivers complementary product line and enhances global presence for Deere Construction − Improves C&F’s strategic position to be global top-3 player − Enables Deere to serve the entire road construction process − Provides construction division global distribution option
Slide 11: End to End Road Construction Portfolio
End to End Road Construction Portfolio 11
Slide 12: Integration Framework
Integration Framework − Retain all brands Preserve Customer − Utilize existing channel structure Relationships − Customer facing functions to remain intact − Utilize existing Wirtgen management structure Continue Profitable − Retain existing manufacturing footprint Growth − Continue Wirtgen’s focus
Slide 13: Leveraging Enterprise Capabilities
Leveraging Enterprise Capabilities 4 Leverages enterprise capabilities and enhances enterprise strategy − Supply Base − Leverage combined direct and indirect materials spend to optimize cost − Vertical Integration − Opportunities in engines, electronics, telematics and cylinders − John Deere Financi
Slide 14: Financially Attractive Transaction
Financially Attractive Transaction 5 Transaction financially attractive with healthy synergy opportunities and EPS accretion − Synergy Realization − EUR ~100 million − Phased in over 5 years − Transaction value estimated at ~$5.2 billion* − 9.5 EV / 2017 EBITDA** − 7.9 EV / 2017 EBITDA including run
Slide 15: Transaction Detail and Funding
Transaction Detail and Funding Transaction Detail Transaction Funding − Current estimate of transaction value ~$5.2 billion* − Cash − Purchase price of EUR 4.357 billion − FY 2017 cash generation − Assumption of debt (net of cash) − Repayment of intercompany loan from John − Ticking fee Deere Financ
Slide 16: Pro Forma Equipment Operations Net Sales
Pro Forma Equipment Operations Net Sales FY 2016 Deere Equipment Operations Pro Forma Deere Equipment Operations (including Wirtgen)* C&F 21% C&F 30% A&T 79% A&T 70% * Source: Wirtgen internal data; German GAAP 16
Slide 17: Summary
Summary − Road construction is a highly attractive construction equipment sector ( growth, cyclical) − Wirtgen is the global leader in road construction equipment Rationale − Improves C&F with complementary fit − Leverages Deere enterprise capabilities − Financially attractive transaction − Impro
Slide 18: The John Deere Strategy
18 THE JOHN DEERE STRATEGY OUR PURPOSE Committed to those linked to the land v v ov OUR ASPIRATIONS GLOBAL GLOBAL AGRICULTURAL OUTPACE 2% 2s EQuIpMENT sowuTIONS CONSTRUE TN INDUSTRY OPERATING MARGIN. ASSET TURNS peor tion PREEMINENCE IN GROWTH (ar MID-CYCLE) (aT MIO-CYCLE] gro ea as SOLUTIONS and di
Slide 19: Appendix
Appendix <—s
Slide 20: Transportation Spend Outpacing General Construction Spending
Transportation Spend Outpacing General Construction Spending Transportation Includes: 2015 Global Construction Spending ($9.5 trillion) 17% − Roads & Bridges Transportation − Railways 37% 15% Residential − Airports Energy & Health Transportation Spending: 31% − $1.6 trillion worldwide in 2015 Non-Re
Slide 21: Deere & Wirtgen Platforms are Complementary
Deere & Wirtgen Platforms are Complementary Road Construction Equipment Earth Moving Road Construction Technology Mineral Technology Recyl / Soil Compacting Stabilizing Excavators Dozers & Concrete Graders Crusher Loaders Surface Asphalt Asphalt Milling Paving Miners Paving Wheel Plants Deere C&F Wi
Slide 22: John Deere
39) JOHN DEERE