Agco Corporation · NYSE:AGCO
Agco — Investor Day (December 2024)
61 slides from Agco's investor day presentation, Dec 19, 2024
Slide 1: Nay
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Slide 2: Investor Day Agenda
INVESTOR DAY Agenda STRENGTHENING OUR FINANCIAL OUTLOOK Damon Audia, CFO EXECUTING OUR FARMER-FIRST STRATEGY Eric Hansotia, CEO 01 IMPROVING OUTCOMES THROUGH TECHNOLOGY Seth Crawford, General Manager, PTx 02 BUILDING A WORLD-CLASS DATA PLATFORM Cory Buchs, Director, Digital Farming Solutions, PTx 03
Slide 3: Safe Harbor
Forward-looking statements in this presentation, including statements about our strategic plans and initiatives as well as their financial impacts, demand, product development and capital expenditure plans and timing of those plans and our expectations with respect to the costs and benefits of those
Slide 4: Executing Our Farmer-First Strategy to Deliver Sustainable Shareholder Value
Executing Our Farmer-First Strategy to Deliver Sustainable Shareholder Value December 19, 2024 Eric Hansotia Chairman, President and Chief Executive Officer 4
Slide 5: Today's Key Messages
Resilient Ag Pure Play Positioned for Growth Differentiated Farmer-First Strategy and Innovation Relentless Focus on Value Creation Today’s Key Messages 5
Slide 6: AGCO is the Largest Pure Play Farm Equipment Manufacturer in the World
AGCO is the Largest Pure Play Farm Equipment Manufacturer in the World Multi-brand Focus: ~25,000 Global Employees 1990 Year Founded ~$12B Annual Revenue(1) Increase in Patent Portfolio Since 2019 ~$7.0B(1) Market Cap 6 ~80% 1) As of December 14, 2024
Slide 7: Supportive Secular Trends & Resilient End Markets
Supportive Secular Trends & Resilient End Markets 1) Source S&P Global Commodity Insights Population Growth Protein Consumption Farming Acreage Increased Demand for Biofuel SECULAR TRENDS Rising Input Costs with Increased Focus on Sustainability AGCO is Well-Positioned to Address SECULAR TRENDS and
Slide 8: Brands & Value Propositions
AG MACHINERY AG TECHNOLOGY Brands & Value Propositions Leaders Drive Fendt Straightforward Dependable Accessible Your Working Machine Industry leader for mixed fleet precision AG through OEM and Retrofit Winning Outcomes Strategy Fundamentals Leader in Precision Ag FarmerCore Operational Efficiency
Slide 9: Our Targets Demonstrating Progress
OUR TARGETS DEMONSTRATING PROGRESS 1) Compared to 2023 product offering 2) From a 2022 baseline, aligned with 1.5C trajectory, 90% is the 2050 target 3) Water and waste targets will be extended out to 2030 once data quality improved 4) 2025 baseline 5) New recordable incident target being developed
Slide 10: FarmerCore Drives Growth And Market Share Gains
FarmerCore Drives Growth And Market Share Gains A blended ecosystem of DIGITAL and PHYSICAL touchpoints enabling AGCO, our brands, and dealer network to deliver… …the industry-leading farmer experience FOCUS ON SERVING FARMERS THE WAY THEY CHOOSE ALONG THE ENTIRE OWNERSHIP CYCLE Smart Network Covera
Slide 11: Leading The Way In Precision Ag
Leading The Way In Precision Ag Addressing Farmer Needs Today And Tomorrow N et S al es In B n U SD Talent Acquisition & Leadership Development Solutions for Every Season Channel Development 2023 2024E 2029 +2.0x ~$0.9B(1)(2) $2.0B(2) $0.7B*(2) *not including PTx Trimble 1) Excluded Q124 PTx Trimble
Slide 12: Unlocking Fendt's Full Potential
Unlocking Fendt’s Full Potential Net Sales & IFO at mid-cycle industry level 1. Fendt Distribution Transformation North and South America (Coverage & Performance) 2. Product & Technology Offensive (Autonomy, Sustainability, Data Platform) 3. Building the Brand (Raising Awareness in North and South A
Slide 13: Accelerating Global Parts Growth
Accelerating Global Parts Growth Going Forward, AGCO Parts Focuses On Three Strategic Pillars: (1) Right Parts At The Right Place, Every Time with Industry-Leading Fill Rates (2) Customer Loyalty And High Re-purchase (3) Digital Enabled Solutions 2023 2029E 130 575 +>300% Net Sales ($bn) eCommerce (
Slide 14: Operational Efficiencies Build a More Resilient Business
Operational Efficiencies Build a More Resilient Business Standardization Automation Offshoring Outsourcing EFFICIENCY EFFORTS EXPECTED TO CONTRIBUTE ~150 bps OF ADJUSTED OPERATING MARGIN IMPROVEMENT • Previously announced restructuring with $100-$125M of run-rate annual savings by year-end 2025 • Ef
Slide 15: Our Strategic Actions Optimize The Business
Our Strategic Actions Optimize The Business And Enhance Our Competitive Position Divestiture Acquisition Long-term Focus On High-growth, High-margin And Significant Free Cash Flow Generating Businesses Non-core, lower-margin business Industry leading global mixed-fleet Precision Ag platform 15
Slide 16: Our Focused Strategy Will Drive Growth And Margin Improvement
Our Focused Strategy Will Drive Growth And Margin Improvement 1) Adjusted operating margins are adjusted to mid-cycle based on a comparison of the current agricultural equipment industry sales to the industry's 10-year historical average. If industry sales are above the 10-year average, margins are
Slide 17: Raising the Bar on Shareholder Value
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY Raising the Bar on Shareholder Value AGCO Increasing Mid-Cycle Adj. Operating Margin Target A dj . O pe ra tin g M ar gi n* New Mid-Cycle Adj. Operating Target of 14% - 15% 2013-2018 Historical Strategy Avg. Mid-Cycle performance Current Strategy Mi
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Slide 19: Improving Outcomes Through Technology
Improving Outcomes Through Technology Seth Crawford General Manager, PTx December 19, 2024
Slide 20: AGCO Will Become The Global Industry Leader In Mixed Fleet Smart Farming
AGCO Will Become The Global Industry Leader In Mixed Fleet Smart Farming And Autonomy Solutions Through PTx Technology 20
Slide 21: PTx Growth Pillars
PTx Growth Pillars Channel Development • Launch channel strategy evolution • Improve dealer performance as solutions experts for farmers • Onboard new dealers Global Expansion • Increase Full-Line Technology dealer coverage • Engage new OEM Accounts • Increase portfolio offering to OEM’s Retrofit Fi
Slide 22: Increasing Addressable Market
INCREASING ADDRESSABLE MARKET Disruptive Change to How Inputs are Used (e.g., Targeted Spraying Reducing Chemical Need) Approximately 7% of farmers buy new equipment each year DRIVING SUSTAINABILITY Making Machine Park More Efficient and More Productive INCREASING FARMER PROFITABILITY Input Savings
Slide 23: Solutions for Every Season: Expanding Our Portfolio
Solutions for Every Season: Expanding Our Portfolio What Began With Guidance & Planting Technology Has Expanded To Other Stages Of The Crop Cycle Plan / Prep Planting FertilizingSpraying Harvesting SOLUTIONS THROUGHOUT THE CROP CYCLE New Entrants Growth Areas Disruptive technologies that transform t
Slide 24: Farmer's ability to choose puts them in control
Farmer’s ability to choose puts them in control Our platform approach generates value for farmers and PTx year after year Farmers Hold the Choice • Brand of equipment to use our technology on • Age of equipment to use our technology on • Feature levels of our technology to use • Dealer that supports
Slide 25: Solutions for Every Season: Targeted Spraying
Solutions for Every Season: Targeted Spraying Delivers more value, with a larger market potential offering more value 25 Symphony Vision | Rate Symphony Vision | Spot 2018 & Newer Nearest Competitor PWM Nozzle Control ✓ ✓ ✓ Independent Rate & Pressure Control ✓ ✓ ✓ Nozzle by Nozzle Swath Control ✓ ✓
Slide 26: Channel Development: PTx Serves Farmers in Differentiated Ways
Channel Development: PTx Serves Farmers in Differentiated Ways AFTERMARKET & RETROFIT New capabilities to existing machines of any make and vintage PTx OEM SOLUTIONS Technology and services for OEM customers around the world, including AGCO’s equipment brands: Fendt, Massey Ferguson and Valtra 100+
Slide 27: PTx Transformation Unlocks Promised Synergies
PTx Transformation Unlocks Promised Synergies Operate As One Business, Eliminate Overlaps, And Optimize The Operations FOCUSING ON GROWTH OPTIMIZING PERFORMANCE ORGANIZATION & OPERATIONAL EFFICIENCY 2024E 2029E $2.0(2) $0.9(1)(2) Operating Model Implementation Realized promised cost synergies throug
Slide 28: Precision Ag Technology Adoption is Accelerating
Precision Ag Technology Adoption is Accelerating PTx Trimble JV further improves user experience and value to the farmer Fendt Options Sold & Net Sales AGCO Factory Adoption of Trimble Receivers Guidance Accuracy Unlocks 9068 2021 2022 2023 Options Sold Net Sales Jan 2024 Apr 2024 Nov 2024 60% 2022
Slide 29: PTx is a leading farmer-focused innovator in the market
PTx is a leading farmer-focused innovator in the market AGCO’s strategy is clear & differentiated Channel offers upside and is on track $2B high margin revenue is achievable AGCO Is Focused On Improving Farmer Outcomes Through Advanced Technology We Develop Solutions That Are Actionable and In-Line
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Slide 31: Building a World-Class Data Platform
Building a World-Class Data Platform December 19, 2024 Cory Buchs Director, Digital Farming Solutions, PTx
Slide 32: The preferred platform for managing Operations across the Mixed Fleet Farm
The preferred platform for managing Operations across the Mixed Fleet Farm PTx Trimble Operations Mixed Fleet Data & Operations FendtONE Machine Configuration and Job Data AGCO Connect Machine Monitoring and Diagnostics NEXT-Farming Lease Management, Compliance Reporting Precision Planting Panorama
Slide 33: Data Platform Roadmap
Next,Panor ama Next, Panorama Next,Panor ama Next, Panorama PTx Trimble AGCO Panorama, Next, etc. Next,Panor ama Next, Panorama Mid 2025 Key Deliverables Existing PTx Trimble Offering PLUS These New Features Progress • Common PTx login • Multi-app workflows (API Integrations) • Connectivity Center f
Slide 34: Farmer Journey: Onboarding
Common landingpage for PTx: Home of the commercial bundle of existing products: ▪ FendtONE ▪ NextFaming live ▪ PTx Trimble Ag Software Register with PTx ID to access AGCO Connect, PTx Trimble, FendtONE and Next Farming applications Leverage Connectivity Center to connect your AGCO and PTx fleet to t
Slide 35: Farmer Journey: Managing the Mixed Fleet
Farmer Journey: Managing the Mixed Fleet 35
Slide 36: Farmer Journey: Collaborating Throughout the Workflow
Connect accounts with business partners Advisor Farmer Custom Applicator Receive agronomic recommendations from agronomists or develop variable rate application maps on-farm Plan and deploy Work Orders to on-farm machines, staff or contractors Track work orders being completed with on-farm machines
Slide 37: The Mixed Fleet Future
The Mixed Fleet Future 1. Differentiated end-state vision connecting machines of all brands, models and ages 2. Expedited execution plan building upon existing PTx technology 3. Aligned organization on track to deliver initial step in 2025 and the complete vision by 2027 PTx will become the preferre
Slide 38: Nay
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Slide 39: Strengthening Our Financial Outlook
Strengthening Our Financial Outlook December 19, 2024 Damon Audia Chief Financial Officer
Slide 40: Financial Goals
FINANCIAL GOALS 14% - 15% Adj. Operating Margin at Mid-Cycle(1) 2029 TARGET 4% - 5% Above Industry Volume Growth 75% - 100% Annual Free Cash Flow Conversion(2) ANNUAL PERFORMANCE 40 1) Adjusted operating margins are adjusted to midcycle based on a comparison of the current agricultural equipment ind
Slide 41: Improved Operations and Higher Margins Over the Past Decade
IMPROVED OPERATIONS AND HIGHER MARGINS OVER THE PAST DECADE AGCO Has Delivered Margin Improvement Through the Cycle and Taken Decisive Action in the Recent Downturn 41 *Reflects non-GAAP measures. See reconciliations provided in the appendix to this presentation. 8.4% 7.1% 5.1% 4.1% 5.1% 5.4% 5.9% 7
Slide 42: Historical Adjusted Operating Margins – Old AGCO
2013 8.4% 2014 7.1% 2015 5.1%2016 4.1% 2017 5.1% 2018 5.4% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 A dj us te d O pe ra ti ng M ar gi n* Industry Level Mid-Cycle (MC) Actual Actual at Mid-Cycle Historical Adjusted Operating Margins – Old AGCO 42 *Reflects non-GAAP measures. See re
Slide 43: Historical Adjusted Operating Margins – Current Strategy
2013 – 2018 MC (Average) 6.0% 2019 5.9% 2020 7.0% 2021 9.1% 2022 10.3% 2023 12.0% 2024 Outlook ~9.0% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 A dj us te d O pe ra ti ng M ar gi n* Industry Level Mid-Cycle (MC) Actual Actual at Mid-Cycle Outlook Outlook at Mid-Cycle Historical Adjus
Slide 44: Path to New Mid-Cycle Margin Target
A D JU ST ED O PE R A TI N G M A R G IN * ADJUSTED OPERATING MARGIN 150-200 bps ~150 bps ~150 bps ~100 bps 14%-15% ~9% Path to New Mid-Cycle Margin Target 2024E Adj. Op Margin Mid-Cycle Volumes Portfolio Optimization Efficiency Initiatives High Margin Growth Initiatives * 2029 Mid- Cycle Adj. Op Mar
Slide 45: Our Strategic Actions Optimize The Business
Our Strategic Actions Optimize The Business And Enhance Our Competitive Position 45 Divestiture ~150 bps Mid-Cycle Adj. Operating Margin* Benefit Acquisition Long-term Focus On High-growth, High-margin and Significant Free Cash Flow Generating Businesses Non-core, lower-margin business Industry-lead
Slide 46: Focused Efficiency Initiatives Contribute SG&A Savings
Focused Efficiency Initiatives Contribute ~$175M - $200M IMPROVEMENT in SG&A TARGETED SAVINGS ✓ Establishing sustainable changes in way of working that persist in 2026 and beyond ✓ Structural changes of processes (e.g., automate, offshore, outsource) ✓ $100-$125M restructuring run-rate annual saving
Slide 47: Driving Growth and Market Share Gains
Driving Growth and Market Share Gains UNLOCKING FENDT’S FULL POTENTIAL LEADING THE WAY IN PRECISION AG AGCO Excluding PTx Trimble AGCO Including PTx Trimble 0.4(2) 0.7(2) ~0.9(1)(2) 2.0(2) 2020 2022 2024E 2029E Net Sales ($bn) ACCELERATING GLOBAL PARTS GROWTH ~1.8 2.3 2024E 2029E Net Sales ($bn) Glo
Slide 48: Investment Grade Balance Sheet With Limited Calls On Cash
Investment Grade Balance Sheet With Limited Calls On Cash Provides Significant Opportunities Engineering Direct Returns to Shareholders M&A Capex Strong Balance Sheet And Free Cash Flow Supports Investment Through the Cycle Balanced Capital Allocation Priorities ENGINEERING Investment at ~4% of Net
Slide 49: Raising the Bar on Shareholder Value
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY Raising the Bar on Shareholder Value AGCO Increasing Mid-Cycle Adj. Operating Margin Target A dj . O pe ra tin g M ar gi n* New Mid-Cycle Adj. Operating Target of 14% - 15% 2013-2018 Historical Strategy Avg. Mid-Cycle performance Current Strategy Mi
Slide 50: 2025 Preliminary Financial Outlook
2025 Preliminary Financial Outlook 50
Slide 51: 2025 Outlook Assumptions
2025 Outlook Assumptions Retail Units End-market Outlook North America(1)(2) Small Ag ~(0-5)% Large Ag ~(25)% Western Europe(2) ~(0-5)% Brazil(2) ~ Flat 51 1) Excludes compact tractors 2)Amounts based on Company estimates
Slide 52: 2025 Key Assumptions
2025 Key Assumptions ENGINEERING EXPENSE Down ~5% vs. 2024 ADJUSTED OPERATING MARGIN 7% - 7.5% EFFECTIVE TAX RATE 35% - 38% 2025 SALES vs. 2024 (3)% Foreign Currency Impact Pricing Flat to +1% Market Share Gains Grain & Protein Divested Nov. 1, 2024 (~$850M in 2024) Dealer Inventory Destocking (Main
Slide 53: 2025 Outlook
~$9.6B Net Sales $4.00 - $4.50 Adjusted Earnings per Share ~$375M Capex 75% - 100% Free Cash Flow Conversion(1) 2025 Outlook Strengthening Our Financial Outlook | INVESTOR DAY 53 (1) Free Cash Flow Conversion is a non-GAAP measure and is defined as (Cash Flow from Operations less purchases of proper
Slide 54: Today's Key Messages
Resilient Ag Pure Play Positioned for Growth Differentiated Farmer-First Strategy and Innovation Relentless Focus on Value Creation Today’s Key Messages 14% - 15% 4% - 5% Above Industry Volume Growth 75% - 100% Annual Free Cash Flow Conversion(1) ANNUAL PERFORMANCE 54 1) Free Cash Flow Conversion is
Slide 55: Appendix
Appendix 55
Slide 56: Non-GAAP To GAAP Reconciliation
56 (1) Rounding may impact summation of amounts (In millions) Non-GAAP To GAAP Reconciliation 2023 2022 2021 2020 2019 Income From Operations(1) Income From Operations Income From Operations Income From Operations Income From Operations As reported $ 1,700.4 $ 1,265.4 $ 1,001.4 $ 599.7 $ 348.1 Impai
Slide 57: Non-GAAP To GAAP Reconciliation
57 (1) Rounding may impact summation of amounts (In millions) Non-GAAP To GAAP Reconciliation 2018 2017 2016 2015 2014 2013 Income From Operations Income From Operations Income From Operations Income From Operations Income From Operations Income From Operations As reported $ 489.0 $ 404.4 $ 288.4 $
Slide 58: Non-GAAP To GAAP Reconciliation
58 (1) Rounding may impact summation of amounts (In millions) Non-GAAP To GAAP Reconciliation 2023 2022 2021 2020 2019 Net sales $ 14,412.4 $ 12,651.4 $ 11,138.3 $ 9,149.7 $ 9,041.4 Income from operations 1,700.4 1,265.4 1,001.4 599.7 348.1 Adjusted income from operations(1) $ 1,732.3 $ 1,307.5 $ 1,
Slide 59: Non-GAAP To GAAP Reconciliation
59 (1) Rounding may impact summation of amounts (In millions) Non-GAAP To GAAP Reconciliation 1) Refer to the previous table for the reconciliation of income from operations to adjusted income from operations. 2) Operating margin is defined as the ratio of income from operations divided by net sales
Slide 60: Non-GAAP To GAAP Reconciliation (Mid-Cycle Margins)
60 1) Rounding may impact summation of amounts (Adjusted Operating Margins at Mid-Cycle) Non-GAAP To GAAP Reconciliation 2) Adjusted operating margins are adjusted to midcycle based on a comparison of the current agricultural equipment industry sales to the industry's 10-year historical average. If
Slide 61: AGCO - Your Agriculture Company
- acco Your Agriculture Company