Slide 1: Second Quarter 2023 Financial and Operational Results
SECOND QUARTER 2023 Financial and Operational Results
Slide 2: Safe Harbor
Q2 2023 EARNINGS RELEASE Q2 2023 EARNINGS RELEASE 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 ou
Slide 3: Financial Summary
Q2 2023 EARNINGS RELEASE Q2 23 vs. YTD 23 vs. REPORTED Q2 23 YTD 23 Q2 22 YTD 22 NET SALES $3,822.7 29.8% $7,156.2 27.1% GROSS MARGIN 26.3% 290bps 26.0% 250bps OPERATING INCOME $496.4 88.4% $883.7 89.0% OPERATING MARGIN 13.0% 400bps 12.3% 400bps FINANCIAL DILUTED EPS $4.26 $1.89 $7.36 $2.96 SUMMARY
Slide 4: Industry Overview
Q2 2023 EARNINGS RELEASE NORTH AMERICA WESTERN EUROPE SOUTH AMERICA INDUSTRY OVERVIEW June 2023 Year-to- Date Retail Units Tractors* Combines Tractors Combines Tractors Combines Industry Industry Industry Industry Industry Industry (2)% 57% (1)% 44% (3)% (3)% 2023 vs. 2022 2023 vs. 2022 2023 vs. 202
Slide 5: 2023 Production
Q2 2023 EARNINGS RELEASE Q2 2023 EARNINGS RELEASE 2023 PRODUCTION AGCO Production Hours Q2 23 Production UP 18% vs. Q2 22 +18% +8% Full-Year 2023 Production UP 4-5% vs. 2022 Q1 Q2 Q3E Q4E 2022 Production 2023 Production Plan 5
Slide 6: Technology Event Demonstrated Ability to Rapidly Integrate & Commercialize Acquisitions
Q2 2023 EARNINGS RELEASE TECHNOLOGY EVENT DEMONSTRATED ABILITY TO RAPIDLY INTEGRATE & COMMERCIALIZE ACQUISITIONS Systems Rapidly Expanding AI/AM to Retrofit & Organic Retrofit & Integration & Expanding Connected Enhance Full Fleet Systems Development Embedded Advanced Features Connectivity Farm Enab
Slide 7: 2023 Tech Event Reiterated Commitments
Q2 2023 EARNINGS RELEASE 2023 TECH EVENT REITERATED COMMITMENTS AUTONOMOUS SOLUTIONS FULLY AUTONOMOUS SOLUTIONS ACROSS CROP CYCLE BY 2030 GLOBAL FENDT FULL-LINE AUTONOMOUS RETROFIT SOLUTIONS Targeted for 2025 GLOBAL TARGETED SPRAYING PRECISION PARTS & AG SERVICES RETROFIT OFFERING in 2024 BUSINESS O
Slide 8: Regional Net Sales Results
Q2 2023 EARNINGS RELEASE REGIONAL NET SALES RESULTS Q2 23 vs. Q2 22 Net Sales Excluding Currency Translation* 27% NA Jun YTD SA 52% 2023 36% 35% 31% APA $7.2B EME 16% 14% 15% 6% EME SA APA NA Consolidated YTD 23 vs. YTD 22 Net Sales Excluding Currency Translation* 26% NA Jun YTD SA 51% 2022 APA $5.6
Slide 9: Net Sales, Adjusted Operating Income and Operating Margins
Q2 2023 EARNINGS RELEASE NET SALES, ADJUSTED OPERATING INCOME AND OPERATING MARGINS Q2 22 to Q2 23 June Year-to-Date $4.5 16% $4.0 $3.9B $3.8B 14% $3.3B $891M Adj. Op. Income* ($M) $3.5 $2.9B $3.1B 13.1% 12% Net Sales ($B) $3.0 12.0% 11.7% Adj. Op. Margin* 10% $2.5 10.7% 8% $507M 12.5% $2.0 9.0% 6%
Slide 10: Precision Ag Business
Q2 2023 EARNINGS RELEASE Q2 2023 EARNINGS RELEASE PRECISION AG BUSINESS DRIVING HIGH MARGIN EXPANDING TOTAL REVENUE GROWTH ADDRESSABLE MARKET Innovation Across ADDRESSABLE MARKET All Makes $1B* Goal 29% Fertilizer Retrofit Channel Globally ~$800M 1% Machinery (Fixed) to 2% Machinery Fuel Expansion A
Slide 11: Free Cash Flow
Q2 2023 EARNINGS RELEASE Q2 2023 EARNINGS RELEASE JUNE YTD FREE CASH FLOW FREE CASH FLOW* $0 2022 2023 (Use of Cash) $ Mils ($200) ($400) SECOND HALF OF YEAR SEASONALLY STRONGER ($600) for Free Cash Flow generation $(602)M ($800) $(705)M ($1,000) CONTINUED SUPPLY CHAIN CONSTRAINTS Related Inventory
Slide 12: 2023 Market Outlook
Q2 2023 EARNINGS RELEASE 2023 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales NORTH AMERICA* SOUTH AMERICA WESTERN EUROPE 137K ~Flat 108K ~Flat 73K +0-5% 2022 2023E 2022 2023E 2022 2023E 12 *Excludes compact tractors
Slide 13: 2023 Key Assumptions
EARNINGS Q2 2023 EARNINGS | INVESTOR RELEASE DAY ENGINEERING EXPENSE + ~20% vs. ‘22 2023 SALES vs. 2022 OPERATING MARGIN 2023 KEY Healthy Large Ag demand ~11.7% ASSUMPTIONS: Currency Impact of +~2% OTHER EXPENSE Pricing ~8% +~$90 Million Market Share Gains EFFECTIVE TAX RATE 27% - 28% 13
Slide 14: 2023 Outlook
EARNINGS Q2 2023 EARNINGS | INVESTOR RELEASE DAY 2023 OUTLOOK 75% - 100% ~$14.7B ~$15.25 ~$400M Free Cash Net Sales Adjusted EPS* Capex Flow Conversion(1)* Note: (1) Free Cash Flow conversion is defined as (Cash Flow from Operations less Capex) / Adj. Net Income 14 * Outlook for 2023 Reported EPS is
Slide 15: Appendix
Q2 2023 EARNINGS RELEASE APPENDIX 15
Slide 16: Grain & Protein Results
Q2 2023 EARNINGS RELEASE Q2 2023 EARNINGS RELEASE GRAIN & PROTEIN RESULTS GRAIN / SEED / PROTEIN PRODUCTION EQUIPMENT JUNE YTD 2023 SALES JUNE 2023 YTD NET SALES $80M INCREASED ~8% vs. JUNE YTD 2022 $69M BY REGION Increase in Sales of Grain and Seed Equipment of ~11% South America $336M $569M APA $8
Slide 17: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) FREE CASH FLOW Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 Net cash used in operating activities ($365.0) ($566.2) Less: capital expenditures (237.0) (139.2) Free cash flow ($602.0) ($705.4) 17 Note: Free cash f
Slide 18: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) NET SALES Three Months Ended June 30, Change due to currency translation % change from 2023 2022 2022 $ % North America 996.8 739.9 34.7% (2.8) (0.4)% South America 598.6 519.2 15.3% (3.8) (0.7)% Europe/Middle East 1,990.8 1,467.
Slide 19: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) NET SALES Six Months Ended June 30, Change due to currency translation % change from 2023 2022 2022 $ % North America 1,919.9 1,440.9 33.2% (7.8) (0.5)% South America 1,102.4 875.6 25.9% (6.7) (0.8)% Europe/Middle East 3,694.6 2,
Slide 20: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Income From Operations Net Income Three Months Ended June 30, Net Income Per Share 2023 2022 Income From Net Net Income Income From Net Net Income (1) (1) Per Share (1) Income Per Share Operations Income
Slide 21: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Income From Operations Six Months Ended June 30, Net Income 2023 2022 Net Income Per Share Income From Net Net Income Income From Net Net Income (1) (1) (1) (1) Operations Income Per Share Operations Inc
Slide 22: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation Net Income Per Share Full Year Ended December 31, 2023 (1) Net Income Per Share As targeted $ 14.82 Restructuring expenses 0.08 Brazilian tax amnesty program 0.35 (2) As adjusted targeted $ 15.25 (1) Net income per share amount is after tax 22
Slide 23: Non-GAAP To GAAP Reconciliation
Q2 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) Free Cash Flow Conversion Projected Year Ended December 31, 2023 Net cash used in operating activities $1,225 to $1,500 Less: capital expenditures (~$400) Free cash flow $825 to $1,100 Net Income ~$1.1B Free cash flow conversion