Slide 1: Second Quarter 2009 Financial and Operational Results
Second Quarter 2009 Financial and Operational Results July 28, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including the projections of future sales, earnings, production levels, market conditions, availability of financing, general economic conditions, currency translation impacts, working capital (and its components), cash flow, effec
Slide 3: Financial Summary
Financial Summary Q209 vs YTD YTD09 vs Q209 Q208 2009 YTD08 Net Sales ($Ms) 1,795.2 -25.1% 3,374.2 -19.3% Gross Profit ($Ms) 291.5 - 31.9% 563.8 -24.2% Adj. Op. Inc.* ($Ms) 80.6 -57.4% 139.2 -50.9% Adj. Op. Margin* 4.5% -340 bps 4.1% -270 bps Adj. Diluted EPS* $0.64 -$0.67 $1.00 -$0.90 *Reflects adj
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units -5% • Production down 35% in Q209 vs Q208 -35% -30-35%* • Q309 production expected to be down 30-35% • Full year 2009 production projected to be down 20-25% from 2008 Q1 Q2 Q3* Q4* 2008 Production 2009 Production * Amounts are estimated for Q3 and Q4 2009
Slide 5: Industry Overview
Industry Overview June 2009 YTD Retail Units North America YTD09 vs YTD08 Tractors – Industry -22% – AGCO Combines – Industry +30% – AGCO Europe Tractors – Industry -13% – AGCO South America Tractors – Industry -25% – AGCO Combines – Industry -48% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2008 $4.2 billion North Q209 vs Q208 Net Sales Excl.Translation South America America 20% EAPAC 17% South North 3% EAME America EAPAC America Consolidated ~ Flat ~Flat EAME -16% -14% 60% -26% YTD 2009 $3.4 billion YTD 09 vs YTD 08 Net Sales Excl. Translation South Nort
Slide 7: Sales and Margins
Sales and Margins Continuing to Invest Adjusted Op. Margins Adj. Op. Sales ($M) Margin $284M $2,500 10.0% Op. Income Sales $2,000 7.5% $1,500 6.8% $139M Op. Margin 5.0% 4.1% Op. Margin $1,000 2.5% $500 $0 0.0% Q208 Q308 Q408 Q109 Q209 YTD 2008 YTD 2009 7
Slide 8: Progress in Reducing Working Capital
Progress in Reducing Working Capital Working Capital*/Sales** • 2009 focus to reduce 14.7% working capital in line with demand • 2H09 production cuts expected to have 8.9% significant impact on 2H09 sales and earnings Q206 Q207 Q208 Q209 * Working Capital defined as Avg. A/R + Avg. Inv. – Avg. A/P –
Slide 9: Free Cash Flow
Free Cash Flow 1H Free Cash Flow Full Year Free Cash Flow (6 Months Ended June 30 ) (Year Ended December 31 ) $150-$200M* • Production cuts in 1H09 reduced accounts payable and inventory levels $40M 1H08 • Second half of year 1H09 seasonally stronger for Free 2008 2009E Cash Flow -$38M • Strong focu
Slide 10: 2009 Assumptions
2009 Assumptions Summary • Significant uncertainty due to the financial crisis and global recession • Agricultural industry sales – NA down approximately 20-25% vs. 2008 – SA down 30-35% vs. 2008 – Western Europe down approximately 10-15% vs. 2008 • Currency impacts reduce sales by 9%-10% • 3.5% - 4
Slide 11: 2009 Targets
2009 Targets Total sales $6.5-$6.8B Diluted EPS $2.00-$2.25 Capital expenditures $250-$275M Free cash flow* $150-$200M *Free cash flow is defined as net cash from operations less capital expenditures. 11
Slide 12: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow ($M) Estimated Year Year ended ended December 31, December 31, 2009 2008 Net cash provided by operating activities $ 425-500 $ 291 Less: Capital expenditures (275-300) (251) Free cash flow $ 150-200 $ 40 Note: Free cash flow is defined as net cash from
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow ($M) Six Months Six Months ended ended June 30, June 30, 2009 2008 Net cash (used in) provided by operating activities $ (268) $ 61 Less: Capital expenditures (101) (99) Free cash flow $ (369) $ (38) Note: Free cash flow is defined as net cash used by o
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended June 30, 2009 2008 Income Earnings Income Earnings From Net Per From Net Per Operations Income (1) Share(1) Operations Income (1) Share(1) As adjusted $ 80.6 $ 59.6 $ 0.64 $ 189.2 $ 129.6 $ 1.31 Restructuring and other inf
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Six months ended June 30, 2009 2008 Income Earnings Income Earnings From Net Per From Net Per (1) Operations Income Share (1) Operations Income (1) Share (1) As adjusted $ 139.2 $ 93.3 $ 1.00 $ 283.5 $ 188.5 $ 1.90 Restructuring and other in
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation AGCO Regional Sales (in millions) % change from % change 2008 due to Net sales from 2008 currency translation Three months ended June 30, 2009 North America $ 445.8 -4.3% - 3.8% South America 226.9 - 40.5% - 14.5% Europe/Africa/Middle East 1,069.5 -28.0% - 11.9% Asia/