Agco Corporation · NYSE:AGCO
Agco — Q1 2010 Earnings Presentation
17 slides from Agco's earnings presentation, Apr 27, 2010
Slide 1: First Quarter 2010 Financial and Operational Results
First Quarter 2010 Financial and Operational Results April 27, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including the projections of earnings per share, sales, market demand and conditions, margin and productivity improvements, inventory management, working capital, free cash flow, exchange rates, production volumes, general economic
Slide 3: Financial Summary
Financial Summary Q110 vs Q110 Q109 Net Sales ($Ms) 1,328.2 -13.3% Gross Profit ($Ms) 224.6 - 17.1% Adj. Op. Inc.* ($Ms) 11.0 -80.7% Adj. Op. Margin* 0.8% -300 bps Adj. Diluted EPS* $0.12 -$0.24 *Reflects adjusted results, which exclude restructuring and other infrequent items. Please see reconcilia
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units ● Production down 20% in Q110 vs Q109 -20% ● Large cuts in Q1 in EAME and NA – Increases in SA ● Full year 2010 production projected to be ~ flat vs 2009 Q1 Q2* Q3* Q4* 2009 Production 2010 Production * Amounts are estimated for Q2-Q4 2010 production 4
Slide 5: Industry Overview
Industry Overview March 2010 YTD Retail Units North America YTD10 vs YTD09 Tractors – Industry +1% – AGCO Combines – Industry +1% – AGCO Western Europe Tractors – Industry -23% – AGCO South America Tractors – Industry +53% – AGCO Combines – Industry +59% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2010 $1.3 billion North Q110 vs Q109 Net Sales Excl. Translation* America South 21% ROW America 5% 29% +68% EAME 45% North EAME ROW America Consol. South YTD 2009 $1.5 billion America -14% -22% North -37% -31% South America America 26% ROW 12% 3% EAME 59% EAME – Europe
Slide 7: Net Sales and Margins
Net Sales and Margins $M Adj. Op. Sales Margin* March YTD 6.0% $57M $ 2,000.0 $ 9,000.0 0.05 $ 8,000.0 Adj. Operating Income* Sales $ 7,000.0 0.04 $ 1,500.0 4.0% $ 6,000.0 3.7% 0.03 Adj. Op. Margin* $ 5,000.0 $ 1,000.0 $ 4,000.0 Adj. Op. Margin* 0.02 $ 3,000.0 2.0% $ 2,000.0 $11M 0.01 $ 500.0 $ 1,00
Slide 8: Closely Managed Production and Inventory
Closely Managed Production and Inventory Company Inventory Levels $1.7B* ● Closely managed seasonal inventory $1.4B* build in Q110 $1.3B ● A/P stabilized and up from Y/E 2009 levels ● Will continue working capital focus in 2010 Q4072008Q108 Q4082009Q109 2010Q110* Q409 * Currency adjusted, see reconc
Slide 9: Free Cash Flow*
Free Cash Flow* Q1 Free Cash Flow (3 Months Ended March 31 ) ● Seasonal working capital build in first Q110 Q109 half of year ● Second half of year seasonally stronger for free cash flow -$226M ● Targeting positive free cash flow in 2010 -$505M Note: Free cash flow is defined as net cash used in ope
Slide 10: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2010 Capex Components $251M $225- New $250M Products $215M Software/ IT Capex $141M $129M Maintenance / Cost Reduction $78M $88M Dep. & Amort. Factory Productivity 2004 2005 2006 2007 2008 2009 2010E 10
Slide 11: 2010 Assumptions – Summary
2010 Assumptions – Summary ● Agricultural industry sales – NA down approximately 5% vs. 2009 – SA up approximately 10-15% vs. 2009 – Western Europe down approximately 10% vs. 2009 ● Approximately 2.5% pricing ● 20% increase in engineering expense for new product development and Tier 4 emission requi
Slide 12: 2010 Targets
2010 Targets Total sales $6.7-$6.8B Diluted EPS $1.65-$1.75 Capital expenditures $225M-$250M Free cash flow* $75M-$100M * Free cash flow is defined as net cash from operating activities less capital expenditures. Please see reconciliations to GAAP metrics provided in the appendix to this presentatio
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Three months Three months ended ended March 31, March 31, 2010 2009 Net cash used in operating activities $ (202.3) $ (458.1) Less: Capital expenditures (24.1) (46.9) Free cash flow $ (226.3) $ (505.0) Note: Free cash flow is defined as net cash used
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended March 31, 2010 2009 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 11.0 $ 11.3 $ 0.12 $ 57.1 $ 33.7 $ 0.36 Restructuring and other infreq
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation AGCO Regional Net Sales (in millions) Three Months Ended March 31, % change from 2009 due to % change currency (1) (1) 2010 2009 from 2009 translation (1) North America $ 282.9 $ 393.3 - 28.1% + 2.4% South America 377.3 179.5 + 110.2% +42.5% EAME 612.3 905.7 - 32.4% +
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Three Months Ended March 31, % change 2010 at 2010 at from 2009 Actual Adjusted due to Exchange Exchange currency Rates Rates (1) translation North America $282.9 $273.3 2.4% South America 377.3 575.0 42.5% EAME 612.3 301.0 4.1% Rest of World 55.7 46.9 14.5% Total $1,
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Reconciliation of Reported Inventory Balances to Currency Adjusted Balances Inventory balances at Inventory balances at Difference due to reported rates adjusted rates (1) currency translation Inventory at December 31, 2009 $ 1,156.7 $ 1,126.2 $ (30.5) Inventory at Ma