Slide 1: First Quarter 2017 Financial and Operational Results
FIRST QUARTER 2017 FINANCIAL AND OPERATIONAL RESULTS
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward-looking statements in this presentation, including statements regarding demand, product development and capital expenditure plans and timing of those plans, acquisition, expansion and modernization plans and our expectations with respect to the costs and benefits o
Slide 3: Financial Summary
FINANCIAL SUMMARY $M** Q1 17 vs Q1 17 Q1 16 Net Sales $1,627.6 +4.4% Gross margin 20.3% +10bps Adj. Operating income* $25.5 +19.7% Adj. Operating margin* 1.6% +20bps Diluted Adjusted EPS* ($0.02) ($0.13) * Reflects adjusted results, which exclude restructuring expenses and a non-cash expense related
Slide 4: Industry Overview
INDUSTRY OVERVIEW March 2017 Year-to-Date Retail Units North America 2017 vs. 2016 Tractors* • Industry (5%) Combines • Industry (2%) Western Europe 2017 vs. 2016 Tractors • Industry (3%) Combines • Industry (15%) South America 2017 vs. 2016 Tractors • Industry 49% Combines • Industry 35% * Excludes
Slide 5: 2017 Production
2017 PRODUCTION Down AGCO Production Hours ~3% • Q1 17 production down ~3% vs. Q1 16 • Full year 2017 production expected to be approximately flat vs. 2016 Q1 Q2E Q3E Q4E 2016 Production 2017 Production 5 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2017 $1.6B North America 23% South America Q1 17 vs. Q1 16 Net Sales EME 14% 55% APA Excluding Currency Translation* 8% South America APA EME North Consol. YTD 2016 $1.6B America North +4% +31% +22% (6%) +5% America 26% South America EME 9% 58% APA 7% EME – Europe/Midd
Slide 7: Net Sales and Operating Margins
NET SALES AND OPERATING MARGINS Sales Adj. Op. First Quarter $M Margin* $2,500 10% $2,000 8% Sales $26M $1,500 6% $21M Adj. Op. Margin* Adj. Op. Income* $1,000 4% 1.6% 1.4% Adj. Op. Margin* $500 2% $0 0% Q116 Q216 Q316 Q416 Q117 2016 2017 * Reflects adjusted results, which exclude restructuring expe
Slide 8: GSI Results
GSI RESULTS 2017 Sales YTD March Q1 2017 sales up ~11% vs 2016 on a constant By Region By Segment currency basis including the benefit of acquisitions $201M $201M ─ Organic protein production growth in NA, EME and APA EME ─ Organic grain storage declines in all regions Protein EAME SA 49% except A
Slide 9: Investing for Growth
INVESTING FOR GROWTH CAPEX Engineering Expenses +$10M $296M Capex R&D Exp. $200-225M 4.0% ~4% Dep. & Amort. $201M % of Sales. $128M $129M 2.4% 06 07 08 09 10 11 12 13 14 15 16 17E 06 07 08 09 10 11 12 13 14 15 16 17E 9 9
Slide 10: Free Cash Flow
FREE CASH FLOW* Thousands Q1 Free Cash Flow Full-Year Free Cash Flow ● Second half of year seasonally Q1 17 $225M to Q1 16 stronger for free cash flow $169M $250M ● Targeting $225M-$250M free cash flow in 2017 ($309M) ($384M) 2016 2017E Note: Free cash flow is defined as net cash provided by (used i
Slide 11: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Dividend Initiated in 2013 Raised in 4 consecutive years Cash to be Returned to Share Repurchase Shareholders $213 million of repurchases in 2016 New $300M program authorized through December 2019 11
Slide 12: 2017 Market Outlook
2017 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) N. America* S. America Western Europe Down 133K 0-5% 88K Down 5-10% Up 49K ~15% 2016 2017E 2016 2017E 2016 2017E 12 *Excludes 12 compact tractors
Slide 13: 2017 Assumptions – Summary
2017 ASSUMPTIONS – SUMMARY 2017 Sales up ~4% vs 2016 – Softer end-market demand in North America and Western Europe – +2% from acquisitions – 1.5% to 2% pricing – Impact of currency translation expected to be -2% Engineering ~4% of sales (up ~$10M vs ’16) Operating margin improvement Effecti
Slide 14: 2017 Outlook
2017 OUTLOOK 2017 Estimates Sales ~$7.7B Adjusted EPS ~$2.70 CAPEX $200-225M Free Cash Flow* $225-$250M 14 * Free cash flow is defined as net cash from operations less capital expenditures. See reconciliation to GAAP metrics in the appendix of this presentation
Slide 15: Appendix
APPENDIX 15
Slide 16: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Quarter ended Quarter ended March 31, March 31, 2017 2016 Net cash used in operating activities $ (251.4) $ (348.2) Less: Capital expenditures (57.1) (35.7) Free cash flow $ (308.5) $ (383.9) Note: Free cash flow is defined as net cash used in operat
Slide 17: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Year ended Year ended December 31, December 31, 2017 2016 Net cash provided by operating activities $425.0 – 475.0 $ 369.5 Less: Capital expenditures (200.0 –225.0) (201.0) Free cash flow $225.0 – 250.0 $ 168.5 Note: Free cash flow is defined as net
Slide 18: Reconciliation of Currency Translation Impact to Net Sales
RECONCILIATION OF CURRENCY TRANSLATION IMPACT TO NET SALES Net Sales $M Change due to currency Three Months Ended March 31, translation % change 2017 2016 from 2016 $ % North America $ 382.6 $ 408.4 (6.3)% $ (2.4) (0.6)% South America 222.2 144.2 54.1 % 33.2 23.0 % Europe/Middle East 892.5 899.1 (0.
Slide 19: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION Three Months Ended March 31, 2017 2016 Income From Net Loss Income From Net Income Operations Net Loss Per Share Operations Net Income Per Share As reported $ 15.6 $ (10.1) $ (0.13) $ 19.4 $ 7.8 $ 0.09 Restructuring expenses 5.1 3.8 0.05 1.9 1.2 0.02 Non-cash expense
Slide 20: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION 2017 Targeted Net Income Per Share As reported $2.59 Restructuring Expenses 0.05 Non-cash expense related to waived stock compensation 0.06 As adjusted $2.70 20