Agco Corporation · NYSE:AGCO
Agco — Q1 2022 Earnings Presentation
19 slides from Agco's earnings presentation, 2022
Slide 1: First Quarter 2022 Financial and Operational Results
FIRST QUARTER 2022 FINANCIAL AND OPERATIONAL RESULTS
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward-looking statements in this presentation, include statements regarding demand, product development and capital expenditure plans, acquisitions, expansion and modernization plans, production levels, engineering expense, exchange rate impacts, pricing, market share ga
Slide 3: Financial Summary
FINANCIAL SUMMARY $M** Reported Q1 2022 Q1 22 v Q1 21 Net Sales $2,685.7 12.9% Gross margin 23.5% -50bps Operating income $204.0 4.5% Operating margin 7.6% -60bps Diluted EPS $2.03 $0.04 Adjusted Q1 2022 Q1 22 v Q1 21 Adj. Operating income* $242.9 23.6% Adj. Operating margin* 9.0% +80bps Diluted Adj
Slide 4: Industry Overview
INDUSTRY OVERVIEW March 2022 Year-to-Date Retail Units 2022 vs. 2021 Tractors* Industry (1)% North America Combines Industry (23)% Tractors Industry (6)% Western Europe Combines Industry (10)% Tractors Industry 9% South America Combines Industry (3)% 4 * Excludes compact tractors
Slide 5: 2022 Production
2022 PRODUCTION AGCO Production Hours +6% (19)% • Q1 22 production up ~6% vs. Q1 21 • Full year 2022 production expected to be up 5-10% vs. 2021 Q1 Q2 Q3 Q4 2021 Production 2022 Production 5
Slide 6: AGCO Acceleration
PRECISION AGCO ACCELERATION Expanding retrofit first approach ‒ Precision Planting launches retrofit spraying products ‒ 4 vision based solutions ‒ 2 solutions for applying crop protection/fertilizer Acquisition of JCA Industries ‒ Increases engineering and software development capabilities to a
Slide 7: Our Purpose
2021 SUSTAINABILITY REPORT HIGHLIGHTS OUR PURPOSE FARMER-FOCUSED SOLUTIONS TO 7 SUSTAINABLY FEED OUR WORLD
Slide 8: Regional Net Sales Results
REGIONAL NET SALES RESULTS Q1 2022 $2.7B North America 26% South EME America 52% EME 8% Q1 22 vs. Q1 21 Net Sales Excluding Currency Translation* South America 57% APA 13% 7% South North APA EME America APA America Consol. 9% Q1 2021 $2.4B North America 26% EME 15% 42% 18% 15% 18% 56% South America
Slide 9: Net Sales, Adjusted Operating Income and Operating Margins
NET SALES, ADJUSTED OPERATING INCOME AND OPERATING MARGINS Q1 21 to Q1 22 March YTD Sales Adj. Op. $M Margin* $3,000 12% $243M $2,500 10% $197M $2,000 8% 9.0 % Adj. Op. Margin* $1,500 6% Net Sales 8.3% $1,000 4% Adj. Op. Margin* $500 2% Adj. Op. Income* $0 0% Q121 Q221 Q321 Q421 Q122 2021 2022 9 * R
Slide 10: Grain and Protein Results
GRAIN AND PROTEIN RESULTS Grain / Seed / Protein Production Equipment March 2022 YTD Sales By Region ● March YTD 2022 net sales increased ~12% South America vs 2021 ‒ Increase in sales of grain and seed equipment of ~38% APA ‒ Decrease in sales of protein production North America EME $240M 57% APA e
Slide 11: Liquidity / Free Cash Flow
LIQUIDITY / FREE CASH FLOW* Q1 Free Cash Flow Full Year Free Cash Flow Cashflow / Liquidity ● Supply chain constraints-related inventory 2022 2021 2022 2021 build ● Second half of year seasonally stronger for free cash flow ● Targeting ~$600M M free cash flow in 2022 ● Declared an annual variable sp
Slide 12: 2022 Market Outlook
2022 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales N. America* S. America Western Europe Up 0-5% Up 5-10% 136K 115K 52K Up 5-10% 2021 2022E 2021 2022E 2021 2022E 12 *Excludes compact tractors
Slide 13: 2022 Assumptions: Summary
2022 ASSUMPTIONS: SUMMARY • 2022 sales vs. 2021 + Improved end market demand - Negative currency impact of (6%) + Pricing 9-10% + Market share gains • Engineering expense +15-20% vs ‘21 • Operating margin ~9.8% • Effective tax rate 28-29% 13
Slide 14: 2022 Outlook
2022 OUTLOOK Sales Adjusted EPS CAPEX Free Cash Flow* $12.5 to $12.7B $11.70 to $11.90 ~$325M ~$600M • See reconciliation to GAAP metrics in the appendix of this presentation. 14 • Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures.
Slide 15: Appendix
APPENDIX 15
Slide 16: Non-GAAP to GAAP Reconciliation: Free Cash Flow
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Quarter ended Quarter ended March 31, March 31, 2022 2021 Net cash used in operating activities $ (576.5) $ (315.3) Less: Capital expenditures (66.2) (63.5) Free cash flow $ (642.7) $ (378.8) Note: Free cash flow is defined as net cash used in operat
Slide 17: Non-GAAP to GAAP Reconciliation: Full Year Free Cash Flow
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Full Year 2022E Net cash provided by operating activities ~$ 925 Less: Capital expenditures ~$(325) Free cash flow ~$ 600 Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures. 17
Slide 18: Non-GAAP to GAAP Reconciliation: Net Sales
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Net Sales $M Three Months Ended March 31, Change due to currency translation % change 2022 2021 from 2021 $ % North America $ 701.0 $ 611.1 14.7 % $ (1.6) (0.3)% South America 356.4 240.5 48.2 % 15.4 6.4 % Europe/Middle East 1,4
Slide 19: Non-GAAP to GAAP Reconciliation: Income and EPS
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Three Months Ended March 31, 2022 2021 Income From Net Net Income Income From Net Income Operations(1) Income (1) Per Share Operations Net Income Per Share(1) As reported $ 204.0 $ 151.8 $ 2.03 $ 195.2 $ 150.8 $ 1.99 Impairment