Deere & Company · NYSE:DE
Deere & — Q1 2020 Earnings Presentation
22 slides from Deere &'s earnings presentation, Feb 21, 2020
Slide 1: 1Q 2020 Earnings Call
1Q 2020 Earnings Call 21 February 2020
Slide 2: Safe Harbor Statement & Disclosures
Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the company’s plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acce
Slide 3: 1Q 2020 Results
1Q 2020 Results ($ millions except where noted) Net Sales & Net Sales Net Income Diluted EPS (Equipment Operations) (attributable to ($ per share) Revenues Deere & Company) $6,941 $6,530 $498 $517 $7,984 $7,631 $1.54 $1.63 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 4% 6% 4% 6% 3
Slide 4: Worldwide Agriculture & Turf
Worldwide Agriculture & Turf 1Q 2020 Results $ in millions Net Sales 4% Operating Profit Comparison $4,681 $4,486 $373 $348 ($115) $132 $13 $30 $65 $4 ($78) ($26) 1Q 2019 1Q 2020 1Q19 Volume/ Price Currency Warranty Production SA&G/ Voluntary Other 1Q20 Mix Costs R&D Separation 4 John Deere | 1Q20 E
Slide 5: Regional Ag Commentary: North America
Regional Ag Commentary MARKET ACCESS FUNDAMENTALS North America – Signed phase I US/China trade agreement – U.S. farm cash receipts expected ↑ – Passage of USMCA provides clarity – Receipts enhanced by 3 rd tranche of MFP – Trade barriers in Canada persist – Canada farm income ↑, but ↓ average AG IN
Slide 6: Regional Ag Commentary: South America and Europe
Regional Ag Commentary FUNDAMENTALS FUNDAMENTALS South America – Record soybean harvest in Brazil – Fundamentals mostly stable – Improving sugar prices – Recovery continues post drought Europe – Brazilian Real weak, margins ↑ – Strong dairy & pork prices MARKET DYNAMICS MARKET DYNAMICS – Equipment d
Slide 7: Agriculture & Turf Industry Outlook – FY20
Agriculture & Turf Industry Outlook – FY20 U.S. AND CANADA AG EUROPE AG SOUTH AMERICA AG (tractors and combines) ~5% ~Flat ~Flat ASIA AG U.S. & CANADA TURF & UTILITY ~Flat ~Flat Source: Deere & Company forecast as of 21 February 2020 7 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 8: Worldwide Agriculture & Turf Divisional Outlook
Worldwide Agriculture & Turf Divisional Outlook NET SALES OPERATING MARGIN 5%-10% 10.5%-11.5% $23,666 10.6% FY2019 FY2020 Fcst FY2019 FY2020 Fcst Source: Deere & Company forecast as of 21 February 2020 8 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 9: Worldwide Construction & Forestry
Worldwide Construction & Forestry 1Q 2020 Results $ in millions Net Sales 10% Operating Profit Comparison $229 $2,260 $2,044 $93 ($118) $15 $5 ($11) ($1) ($5) ($24) $3 1Q 2019 1Q 2020 1Q19 Volume/ Price Currency Warranty Production SA&G/ Voluntary Other 1Q20 Mix Costs R&D Separation 9 John Deere | 1
Slide 10: Construction & Forestry Industry Outlook
Construction & Forestry Industry Outlook NORTH AMERICAN GLOBAL FORESTRY CONSTRUCTION EQUIPMENT ~5-10% ~5-10% Source: Deere & Company forecast as of 21 February 2020 10 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 11: Worldwide Construction & Forestry Divisional Outlook
Worldwide Construction & Forestry Divisional Outlook NET SALES OPERATING MARGIN 9.5%-10.5% 10%-15% 10.8% $11,220 FY2019 FY2020 Fcst FY2019 FY2020 Fcst Source: Deere & Company forecast as of 21 February 2020 11 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 12: Worldwide Financial Services
Worldwide Financial Services Net Income - 1Q20 Results and Outlook ACTUAL 1Q20 FY2020 FORECAST $154 $137 $539 $600 1Q19 1Q20 FY2019 FY2020 Fcst Source: Deere & Company forecast as of 21 February 2020 12 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 13: Deere & Company Outlook
Deere & Company Outlook FY20 FORECAST Net Income Effective Net Operating (attributable to Deere & Co.) Tax Rate* Cash Flow* $2.7-3.1B 22-24% $3.1-3.5B *Equipment Operations Source: Deere & Company forecast as of 21 February 2020 13 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 14: Appendix
Appendix 14 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 15: Other Financial Information
Other Financial Information Equipment Operations Fiscal 2020 ($ millions) 1Q20 Forecast COS (percent of Net Sales)* 78% ~76% SA&G* 4% ~2% Research and Development* 5% ~ 2% Capital Expenditures ~ $1,100 Pension/OPEB Expense ~ $90 Pension/OPEB Contributions ~ $530 *As reported (including Voluntary Sep
Slide 16: Share Repurchase
Share Repurchase As Part of Publicly Announced Plans 1Q 2020: 37% net share reduction since 2004 Cost of repurchases $99.0 million Shares repurchased 0.6 million 40 $3.0 Millions of Shares* 2004–1Q 2020: $2.5 30 Cumulative cost of repurchases $18.7 billion $2.0 $ Billions Shares repurchased 260.0 mi
Slide 17: January 2020 Retail Sales and Dealer Inventories
January 2020 Retail Sales (Rolling 3 Months) and Dealer Inventories Retail Sales U.S. and Canada Ag Industry* Deere** 2WD Tractors (< 40 PTO hp) 5% In line with the industry 2WD Tractors (40 < 100 PTO hp) 3% Low double digits 2WD Tractors (100+ PTO hp) 4% In line with the industry 4WD Tractors 15% M
Slide 18: January 2020 Retail Sales
January 2020 Retail Sales (Rolling 3 Months) Retail Sales Europe Ag Deere* Tractors Low double digits Combines Double digits Retail Sales U.S. and Canada Deere* Selected Turf & Utility Equipment Flat Construction & Forestry First-in-the-Dirt Low single digit Settlements Single digit * Based on inter
Slide 19: U.S. Farm Cash Receipts
U.S. Farm Cash Receipts $500 $400 $300 $ Billions $200 $100 $0 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020F Crops Livestock Government Payments USDA Aid* *USDA Aid includes partial MFP1 and two tranches of MFP2 Note: USDA announced a trade retaliation relief package $16B in 2019. The $16B pack
Slide 20: John Deere
20 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 21: Deere & Company's 2Q 2020 earnings call
Deere & Company’s 2Q 2020 earnings call is scheduled for 9:00 a.m. central time on Friday, 22 May 2020. 21 John Deere | 1Q20 Earnings Call | February 21, 2020
Slide 22: @ John Deere
@ JOHN DEERE