Agco Corporation · NYSE:AGCO
Agco — Investor Day (December 2022)
78 slides from Agco's investor day presentation, Dec 16, 2022
Slide 1: Technology Fueled Growth
Friday | December 16 | 2022 Technology Fueled Growth
Slide 2: Agenda
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAYINVESTOR DAY 2 AGENDA STRENGTHENING OUR FINANCIAL OUTLOOK Damon Audia, CFO EXECUTING OUR FARMER FIRST STRATEGY Eric Hansotia, CEO 01 IMPROVED OUTCOMES THROUGH TECHNOLOGY Seth Crawford, SVP & General Manager, Precision Ag & Digital 02 DELIVERING VALUE
Slide 3: Safe Harbor
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 3 INVESTOR DAY 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
Slide 4: Your Agriculture Company
Asxacco Your Agriculture Company
Slide 5: Executing Our Farmer First Strategy
EXECUTING OUR FARMER FIRST STRATEGY Eric Hansotia | Chief Executive Officer 5
Slide 6: AGCO Is the Largest Pure Play Farm Equipment Manufacturer in the World
6 EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY AGCO IS THE LARGEST PURE PLAY FARM EQUIPMENT MANUFACTURER IN THE WORLD Multi-brand Focus: ~23,000 Global Employees 1990 Year Founded ~$12.6B Annual Revenue(1) Technology- Rich Products Across the Crop Cycle $9.9B(2) Market Cap ($M) (1) Projected 2
Slide 7: Supportive Macro Trends & Healthy End Markets
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 7 SUPPORTIVE MACRO TRENDS & HEALTHY END MARKETS 1) Source EME Industry Forecasting, update September 2022 2) Values are adjusted for inflation using the U.S. Bureau of Economic Analysis Gross Domestic Product Price Index (BEA API series code: A191RG
Slide 8: Evolution to Farmer-First Technology Company Focused on Growth
8 EVOLUTION TO FARMER-FIRST TECHNOLOGY COMPANY FOCUSED ON GROWTH STRONG FOUNDATION TRANSFORMATION ACCELERATING PERFORMANCE (1990 - 2004) (2004 - 2020) (2021 and Beyond) Holding Company with Multiple Brands 40+ Acquisitions Consolidation of Brands & Platforms Global Expansion Announces Farmer First S
Slide 9: Our Purpose, Vision and Key Initiatives
9 SUSTAINABILITY OUR PURPOSE Farmer-Focused Solutions to Sustainably Feed Our World OUR VISION Trusted Partner for Industry-Leading, Smart Farming Solutions WINNING OUTCOMES FARMER FIRST ENABLERS KEY INITIATIVES Exceptional Customer Experiences That Reinforce Brand Promises High Quality, Smart Solut
Slide 10: Sustainability Without Compromise
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAYEXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 10 SUSTAINABILITY WITHOUT COMPROMISE Securing the Sustainability of Farmers’ Operations is Essential to Their Long-Term Growth and Productivity SUSTAINABILITY ACROSS THE FOOD CHAIN Advancing SOIL HEA
Slide 11: Optimizing Our Distribution Channels to Better Serve Customers
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 11 OPTIMIZING OUR DISTRIBUTION CHANNELS TO BETTER SERVE CUSTOMERS GLOBAL STANDARD SCORECARD Driving Increased Dealer Accountability DIGITIZING THE CUSTOMER EXPERIENCE Driving Increased Functionality for Customers DEPLOYING DIGITAL TOOLS Across Parts
Slide 12: Building Culture to Create Competitive Advantage
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 12 BUILDING CULTURE TO CREATE COMPETITIVE ADVANTAGE Achieving Better Farmer Outcomes SPEAK UP! Raising Challenging Topics Openly and Debating Respectfully TEAM UP! Maximizing AGCO Results Through Teamwork and Aligned Actions FARMER FIRST Putting Far
Slide 13: Massey Ferguson Optimization
13 MASSEY FERGUSON OPTIMIZATION EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY SIMPLIFY PRODUCT PORTFOLIO from 26 Platforms to 18 with Additional Simplification Opportunities Identified ACCELERATE GROWTH through Global Dealer Network Optimization and Digitalization IMPROVE COST Structure Key Ini
Slide 14: Capitalizing on Growth Levers to Grow Top-Line and Expand Margin
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 14 CAPITALIZING ON GROWTH LEVERS TO GROW TOP-LINE AND EXPAND MARGIN SUSTAINABILITY GLOBAL FENDT FULL-LINE PRECISION AG GLOBAL PARTS & SERVICES BUSINESS
Slide 15: Expansion of Global Fendt Full-Line
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAYEXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 15 EXPANSION OF GLOBAL FENDT FULL-LINE Taking the Best Equipment Global EXPANDING GLOBAL PRESENCE WORLD-CLASS PRODUCT PORTFOLIO Tractors, Combines, Planters, Sprayers, Balers An Award-Winning Full-Li
Slide 16: Your Agriculture Company
Masco o cB { = Your Agriculture Company
Slide 17: Your Agriculture Company
Aaxacco Your Agriculture Company
Slide 18: Strong Growth Initiatives: Global Parts and Services Business
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY STRONG GROWTH INITIATIVES GLOBAL PARTS AND SERVICES BUSINESS Virtuous Cycle Accelerated by Strong Growth Opportunities 18 EXPANDING DIGITAL SOLUTIONS INCREASES CUSTOMER LOYALTY ATTRACTIVE OPPORTUNITY DRIVEN BY: High Margin Sophisticated Products Dri
Slide 19: Driving High Margin Revenue Growth in Precision Ag
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAYEXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY Driving High Margin Revenue Growth 19 PRECISION AG 2020 2021 2022E 2023 2024 2025E ~$400M $541M $650+M $800M+ Original Goal $1B New Goal Ahead of Schedule 3X SPEND ON SMART SOLUTIONS Since 2019 Throu
Slide 20: Award Winning Innovation
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 20 AWARD WINNING INNOVATION Since 2020, AGCO and Its Portfolio of Products Have Received Over 60 Awards
Slide 21: Innovation & Technology Position AGCO for the Future
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 21 INNOVATION & TECHNOLOGY POSITION AGCO FOR THE FUTURE FENDT e100 Fully Electric Tractor – Targeted Launch in 2024 NEW CORE AGCO POWER ENGINES Fully Designed for Alternative Fuels R&D EFFORTS on Alternative Fuels, Fuel Cells, Hybrid Hydrogen Fuel C
Slide 22: Raising the Bar on Shareholder Value
EXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAYEXECUTING OUR FARMER FIRST STRATEGY | INVESTOR DAY 9.1% 2013 - 2021 Average Current Mid-Cycle Target 2026 Mid-Cycle Target 22 RAISING THE BAR ON SHAREHOLDER VALUE AGCO is Increasing Target Operating Margin O p e ra ti n g M a rg in 4.0% 6.3% 10% 12%
Slide 23: Key Takeaways
23 KEY TAKEAWAYS FARMER FOCUSED STRATEGY Strengthens Global Market Positioning SUSTAINABILITY is at the Core of Everything We Do Clear Levers to GROW SALES AND EXPAND OPERATING MARGIN While Continuing to Build Resiliency Within Our Business LEVERAGING TECHNOLOGY to Increase Yield and Optimize Farmer
Slide 24: Improved Outcomes Through Technology
Seth Crawford | SVP & General Manager, Precision Ag & Digital IMPROVED OUTCOMES THROUGH TECHNOLOGY
Slide 25: Improving Farmer Outcomes Through Advanced Technology
2 INVESTOR DAY AGCO IS FOCUSED ON IMPROVING FARMER OUTCOMES THROUGH ADVANCED TECHNOLOGY IMPROVED OUTCOMES THROUGH TECHNOLOGY | AGCO’s Farmer First Strategy Brings Value and Sustainable Growth To Farmers Around The World AGCO Delivers Disruptive Technology Across the Crop Cycle and Equipment Lifespan
Slide 26: Driving Technology Forward
3 INVESTOR DAY DRIVING TECHNOLOGY FORWARD Strong Foundation to Deliver DISRUPTIVE TECHNOLOGY ACROSS THE CROP CYCLE Focused on Developing Solutions That Are Actionable and IN-LINE WITH FARMER NEEDS TODAY WHILE PREPARING FOR TOMORROW FARMER-FOCUSED INNOVATION Expands AGCO’s Current Product Offering an
Slide 27: Organic and Inorganic Technology Development
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY 4 ORGANIC AND INORGANIC TECHNOLOGY DEVELOPMENT POSITIONS AGCO FOR LONG-TERM SUCCESS Organic Development Inorganic Development Retrofit & Systems Integration Retrofit & Embedded AUTONOMY AUTOMATION & ARTIFICIAL INTELLIGENCE DATA MANAGEMENT & LOGISTI
Slide 28: Your Agriculture Company
) NNclote Your Agriculture Company
Slide 29: Strategic Investments Strengthen Competitive Position
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAYIMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY Investment in Organic R&D Targeting ~4% of Annual Net Sales Partnerships with Academic and Sustainability Advocates Bolt-on Acquisitions Seeding Venture Capital STRENGTHENING OUR COMPETITIVE POSITI
Slide 30: Farmer-Focused Innovation
7 FARMER- FOCUSED INNOVATION FIRST RETROFIT AUTONOMOUS OFFERINGS • Grain Cart and Tillage in 2025 • Full Crop Cycle Autonomy by 2030 TARGETED SPRAYING • Retrofit Offering in 2024 • OEM Offering in 2026 INVESTOR DAYIMPROVED OUTCOMES THROUGH TECHNOLOGY |
Slide 31: Addressing Farmer Needs Today and Tomorrow
8 ADDRESSING FARMER NEEDS TODAY AND TOMORROW
Slide 32: Well Positioned to Meet Farmers' Current Needs
9 INVESTOR DAY FARMER FOCUS Digitally Enabled RETROFIT First SPECIALIZED, AG-FOCUSED Brands Full-line SMART FARMING Portfolio IMPROVED OUTCOMES THROUGH TECHNOLOGY | WE ARE WELL POSITIONED TO MEET FARMERS' CURRENT NEEDS We Develop Solutions That Are Actionable and In-Line With Farmers' Needs Today Wh
Slide 33: Retrofit: Increasing Total Addressable Market
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY 10 RETROFIT: INCREASING TOTAL ADDRESSABLE MARKET & ACCELERATING TECHNOLOGY ADOPTION Brand Agnostic Retrofit Enables Incremental Opportunity Unique to AGCO STRONG TECH STACK PROVIDES RETROFIT SOLUTIONS ACROSS PORTFOLIO OF OFFERINGS Accelerated by St
Slide 34: Increasing Addressable Market
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY INCREASING ADDRESSABLE MARKET Disruptive Change to How Inputs are Used (e.g., Targeted Spraying Reducing Chemical Need) DRIVING SUSTAINABILITY Making Machine Park More Efficient and More Productive INCREASING FARMER PROFITABILITY Input Savings and
Slide 35: Smart Farming with Edge Processing
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY 12 SMART FARMING WITH EDGE PROCESSING: Leveraging the Right Data to Drive Better Yields REAL TIME DATA Allows Farmers to Sense and Act in the Moment Shining Light on Plant Needs and Solutions to Drive INCREASED YIELDS Leveraging EDGE PROCESSING and
Slide 36: Smart Products Focused on Productivity and Sustainability
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY 13 SMART PRODUCTS FOCUSED ON PRODUCTIVITY AND SUSTAINABILITY Precision Planting: Furrow Jet 187.5 190 177 193 209.5 212.5 215 214.8 Silty Clay Loam Light Silt Loam Silty Clay Loam Silt Loam B u /A c re Check Furrow Jet Field 1 Field 2 YIELD RESPONS
Slide 37: Retrofit Growth Driving Strong Results
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAYIMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY DRIVING STRONG RESULTS $ $100 $200 $300 $400 $500 $600 $700 Net Sales Net Sales Expon. (Net Sales) 14 RETROFIT GROWTH Developing Smart Products that Improve Operations on Farms Across the World Usi
Slide 38: Investor Day
15 INVESTOR DAY
Slide 39: Increasing Recurring Revenue & Software Enabled Features
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY WITH CONTINUED GROWTH OPPORTUNITY DRIVING STRONG RESULTS INCREASING RECURRING REVENUE & SOFTWARE ENABLED FEATURES 16 FUSE: SMART FARMING. SYNCHRONIZED *North America and Europe +18% +16% +18% +20% 2019 2020 2021 2022e 2025e 90% INCREASE* SUBSCRIPTI
Slide 40: Specialized Ag: Fendt 700 Vario Gen 7
17 INVESTOR DAYIMPROVED OUTCOMES THROUGH TECHNOLOGY | SPECIALIZED AG: FENDT 700 VARIO GEN 7 Producing Great Innovations and Technologies Inspired by the Needs and Ideas of Our Customers GUIDANCE – The most wayline options of all tractor brands PRECISION EXTENDED FendtONE Smart Ag Features PRODUCTIVI
Slide 41: Executing Our Plan and Delivering Above Original Commitments
18 EXECUTING OUR PLAN AND DELIVERING ABOVE ORIGINAL COMMITMENTS
Slide 42: Precision Ag Business Expanding Total Addressable Market
IMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAYIMPROVED OUTCOMES THROUGH TECHNOLOGY | INVESTOR DAY ADDRESSABLE MARKET 29% 27% 12% 8% 7% 7% 4% 3% 2% 1% Fertilizer Machinery (Fixed) Machinery Fuel Crop Protection Seed Hired Labor Repairs & Maintenance Grain Drying Other 19 PRECISION AG BUSINESS EX
Slide 43: Driving Technology Forward
20 INVESTOR DAY DRIVING TECHNOLOGY FORWARD Strong Foundation to Deliver DISRUPTIVE TECHNOLOGY ACROSS THE CROP CYCLE Focused on Developing Solutions that are Actionable and IN-LINE WITH FARMER NEEDS TODAY WHILE PREPARING FOR TOMORROW FARMER-FOCUSED INNOVATION Expands AGCO’s Current Product Offering a
Slide 44: Delivering Value Through Sustainability
Louisa Parker Smith | Director of Global Corporate Sustainability DELIVERING VALUE THROUGH SUSTAINABILITY 1
Slide 45: Farmer Focused Solutions to Sustainably Feed Our World
2 INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | AGCO DEVELOPS FARMER FOCUSED SOLUTIONS TO SUSTAINABLY FEED OUR WORLD EXECUTED THROUGH OUR SUSTAINABILITY OBJECTIVES Industry Impact and Leadership Facilitating the Path to Global Food Security Innovative Products and Solutions Investing in Sust
Slide 46: Climate Change Shapes Agriculture Policy
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY 3 CLIMATE CHANGE SHAPES AGRICULTURE POLICY Agriculture is Highly Exposed to Climate Change and an Important Part of the Solution …GROWING FASTER THAN YOU REALIZE Population reaching ~10 BILLI
Slide 47: Sustainability Without Compromise
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY Securing the Sustainability of Farmers’ Operations is Essential to their Long-Term Growth and Productivity 4 SUSTAINABILITY ACROSS THE FOOD CHAIN Advancing SOIL HEALTH AND CARBON SEQUESTRATIO
Slide 48: AGCO Has Made Solid Progress on Sustainability
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY AGCO HAS MADE SOLID PROGRESS ON SUSTAINABILITY * December 2022. 5 KPIs 13% Reduction GHG Emission Intensity (2021) ADOPTING LEADING FRAMEWORKS Awards 2022 Sustainability Company of the Year 8% Reduction in Energy Intensity (2021) 12% Reduction i
Slide 49: Decarbonizing Our Value Chain Emissions
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY DECARBONIZING OUR VALUE CHAIN EMISSIONS UPSTREAM EMISSIONS CURRENTLY EVALUATING CATEGORY 1 DOWNSTREAM EMISSIONS CURRENTLY EVALUATING CATEGORY 11 2021 OPERATIONAL EMISSIONS (Manufacturing sites) SCOPE 1: 55,864 tCO2e Metric Tonnes Co2e Fuel Combu
Slide 50: Expanding Efforts to Our Products & Suppliers
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY 7 EXPANDING EFFORTS TO OUR PRODUCTS & SUPPLIERS Scope 3 Levers FUEL EFFICIENCY AND CLEANER ENERGY BIOMETHANE MORE EFFICIENT ENGINES AGCO POWER CORE BATTERY ELECTRIC FULL/MILD HYBRID H2 AGRAR
Slide 51: Advancing Soil Health Creates a Virtuous Cycle of Benefits
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY ADVANCING SOIL HEALTH CREATES A VIRTUOUS CYCLE OF BENEFITS FOR FARMERS RADICLE AGRONOMICSTM Transforming Soil Nutrient Management With Precise Tools and Reliable Agronomic Data GeoPress™, Automated Soil Sample Tagging Radicle LabTM, the World's
Slide 52: Prioritizing Animal Welfare Meets Evolving Consumer Expectations
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY Strong Product Portfolio • Tecno • Cumberland • Automated Production Systems (AP) • Scout • Edge Innovative Partnerships Drive Sustainable Solutions • Faromatics Acquisition • Optifarm Invest
Slide 53: Farmers Are at the Center of Everything We Do
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAYDELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY FARMERS ARE AT THE CENTER of Everything We Do With Over 20 PROJECTS Around the World, the Foundation has Reached More Than 20,000 PEOPLE and 200,000 HOUSEHOLDS in our Farming Communities AT A
Slide 54: Attracting, Developing & Retaining a Diverse & Engaged Workforce
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY ATTRACTING, DEVELOPING & RETAINING A DIVERSE & ENGAGED WORKFORCE DE&I New Goals: FOCUS 2.0 New Safety Goal Achieve Incident Rate of 1.5 BY 2025 (From 2.5 in 2021) Case Study CONTINUOUS LEARNING AND DEVELOPMENT Delivered 92,000 TRAINING HOURS to
Slide 55: Committed to a Sustainable Future
DELIVERING VALUE THROUGH SUSTAINABILITY | INVESTOR DAY COMMITTED TO A SUSTAINABLE FUTURE AGCO Continues to Drive Sustainable Practices via Our Strategic Pillars SOIL HEALTH AND CARBON SEQUESTRATION INTEGRATE SOIL HEALTH BEST PRACTICE into Farm Trials and Demonstrations DEVELOP NEW SENSORS, TECHNOLOG
Slide 56: Strengthening Our Financial Outlook
Damon Audia | Chief Financial Officer STRENGTHENING OUR FINANCIAL OUTLOOK 1
Slide 57: Financial Goals
INVESTOR DAYSTRENGTHENING OUR FINANCIAL OUTLOOK | 2 (1) Free Cash Flow conversion is defined as (Cash Flow from Operations less Capex)/ Adj. Net Income FINANCIAL GOALS 12% Adj. Operating Margin at Mid-Cycle 2026 TARGET 4% - 5% Above Industry Volume Growth 75% - 100% Annual Free Cash Flow Conversion(
Slide 58: Historical Operating Margins
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 2013 8.4% 2014 7.2% 2015 5.1% 2016 4.0% 2017 5.0% 2018 5.4% 2019 5.9% 2020 7.0% 2021 9.1% 2022 F 9.9% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 O P E R A T IN G M A R G IN INDUSTRY LEVEL (% OF 10 YEAR AVERAGE) Mid-Cycle (MC) Actual/
Slide 59: Value Creation Line
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 4 VALUE CREATION (VC) LINE 2013 8.4% 2014 7.2% 2015 5.1% 2016 4.0% 2017 5.0% 2018 5.4% 2019 5.9% 2020 7.0% 2021 9.1% 2022 F 9.9% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 O P E R A T IN G M A R G IN INDUSTRY LEVEL (% OF 10 YEAR AVER
Slide 60: Mid-Cycle Operating Margins 2013-2018
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 5 MID-CYCLE OPERATING MARGINS 2013-2018 2013 8.4% 2014 7.2% 2015 5.1%2016 4.0% 2017 5.0% 2018 5.4% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 O P E R A T IN G M A R G IN INDUSTRY LEVEL (% OF 10 YEAR AVERAGE) Mid-Cycle (MC) Actual Act
Slide 61: Demonstrated Operating Margin Improvement Through Strategy Execution
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 2013 – 2018 MC (Average) 6.0% 2019 5.9% 2020 7.0% 2021 9.1% 2022 F 9.9% 0% 2% 4% 6% 8% 10% 12% 14% 80 85 90 95 100 105 110 115 120 O P E R A T IN G M A R G IN INDUSTRY LEVEL (% OF 10 YEAR AVERAGE) Mid-Cycle (MC) Actual/Forecast Actual/Forecast at Mi
Slide 62: Reducing Cycle Exposure
INVESTOR DAY 7 REDUCING CYCLE EXPOSURE Strong Market Positioning and Attractive Strategic Initiatives STRENGTHENING OUR FINANCIAL OUTLOOK | TARGETING 4% - 5% ANNUAL GROWTH ABOVE INDUSTRY DELIVERING MORE CONSISTENT EARNINGS THROUGHOUT THE CYCLES SUSTAINABILITY GLOBAL FENDT FULL-LINE PRECISION AG GLOB
Slide 63: Raising the Bar: 12% Operating Margins
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAYSTRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 8 (1) Assumes 2016 industry level Increasing Operating Margins Throughout the Cycle RAISING THE BAR 12% OPERATING MARGINS COULD BE ACCELERATED IF INDUSTRY REMAINS ABOVE MID-CYCLE Current Cycle 2026 C
Slide 64: Addressable Market and Share of Farmers' Spend
INVESTOR DAY ADDRESSABLE MARKET 29% 27% 12% 8% 7% 7% 4% 3% 2% 1% Fertilizer Machinery (Fixed) Machinery Fuel Crop Protection Seed Hired Labor Repairs & Maintenance Grain Drying Other 9 STRENGTHENING OUR FINANCIAL OUTLOOK | FARMER-FIRST FOCUS IS EXPANDING ADDRESSABLE MARKET AND SHARE OF FARMERS` SPEN
Slide 65: Strong Balance Sheet and Free Cash Flow
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY Engineering Direct Returns to Shareholders M&A Capex 10 STRONG BALANCE SHEET AND FREE CASH FLOW Supports Investment Through the Cycle Balanced Capital Allocation Priorities FULLY FUNDED Engineering and Technology Investment STRATEGIC M&A Focused on
Slide 66: Disciplined Capital Allocation Priorities
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY Maintain Investment Grade Credit Ratings Engineering and Capital Investment Supporting Growth Pillars Opportunistically Seek to Accelerate Technology Product Offerings Consistent Quarterly Dividends, Special Variable Dividends, and Periodic Share Re
Slide 67: 2023 Guidance Assumptions
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 2023 GUIDANCE ASSUMPTIONS Retail Units End-Market Growth 12 North America ~ Flat Western Europe ~ Flat South America 0-5% GROWTH
Slide 68: 2023 Guidance
INVESTOR DAY 13 STRENGTHENING OUR FINANCIAL OUTLOOK | ~$14B Net Sales ~$13.50 EPS ~$375M Capex 75% - 100% Free Cash Flow Conversion(1) A STRONGER BUSINESS WITH ATTRACTIVE GROWTH OPPORTUNITIES 2023 Guidance (1) Free Cash Flow conversion is defined as (Cash Flow from Operations less Capex) / Adj. Net
Slide 69: Strong Financial Outlook
INVESTOR DAYSTRENGTHENING OUR FINANCIAL OUTLOOK | STRONG FINANCIAL OUTLOOK Driving Momentum Throughout the Business 12% Adj. Operating Margin at Mid-Cycle 2026 TARGET 4% - 5% Above Industry Volume Growth 75% - 100% Annual Free Cash Flow Conversion(1) ANNUAL PERFORMANCE FINANCIAL GOALS (1) Free Cash
Slide 70: Investment Thesis
INVESTOR DAYSTRENGTHENING OUR FINANCIAL OUTLOOK | INVESTMENT THESIS LARGEST PURE PLAY FARM EQUIPMENT MANUFACTURER with Attractive Global Market Position Proven History of CONSISTENT STRATEGIC EXECUTION Targeted Long-term Strategy PROPELS GROWTH and OPTIMIZES PROFITABILITY Leveraged and Enhanced PREC
Slide 71: Appendix
A.acco Your Agriculture Company APPENDIX
Slide 72: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 17 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) (1) Rounding may impact summation of amounts
Slide 73: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 18 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Years Ended December 31, 2021 2020 Income From Operations Net Income(1) Net Income Per Share(1) Income From Operations Net Income(1) Net Income Per Share(1) As reported $ 1,0
Slide 74: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 19 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Years Ended December 31, 2019 2018 Income From Operations Net Income(1) Net Income Per Share(1) Income From Operations Net Income(1) Net Income Per Share As reported $ 348.1
Slide 75: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 20 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Years Ended December 31, 2017 2016 Income From Operations Net Income Net Income Per Share Income From Operations Net Income Net Income Per Share As reported $ 403.3 $ 186.4 $
Slide 76: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 21 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Years Ended December 31, 2015 2014 Income From Operations Net Income (1) Earnings Per Share (1) Income From Operations Net Income (1) Earnings Per Share (1) As adjusted $ 383
Slide 77: Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY 22 Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Years ended December 31, 2013 2012 Income From Operations Net Income (1) Net Income Per Share (1) Income From Operations Net Income (1) Net Income Per Share (1) As adjusted $
Slide 78: Free Cash Flow Non-GAAP To GAAP Reconciliation
STRENGTHENING OUR FINANCIAL OUTLOOK | INVESTOR DAY Free Cash Flow Note: Free cash flow is defined as net cash (used in) provided by operating activities less capital expenditures. $M Non-GAAP To GAAP Reconciliation 23 Nine months Free Cash Flow: 2021 Operating Cash Flow 660 (295) Less: Capital Expen