Slide 1: Third Quarter 2009 Financial and Operational Results
Third Quarter 2009 Financial and Operational Results October 27, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including the projections of sales, earnings, production levels, general economic conditions, currency translation impacts, working capital (and its components), cash flow, effect of new accounting rules, pricing levels, capital ex
Slide 3: Financial Summary
Financial Summary Q309 vs YTD YTD09 vs Q309 Q308 2009 YTD08 Net Sales ($Ms) 1,403.7 -32.7% 4,777.9 -23.8% Gross Profit ($Ms) 241.4 - 36.5% 805.2 -28.3% Adj. Op. Inc.* ($Ms) 35.0 -75.3% 174.2 -59.0% Adj. Op. Margin* 2.5% -431 bps 3.6% -314 bps Adj. Diluted EPS* $0.13 -$0.88 $1.12 -$1.79 *Reflects adj
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units -5% • Production down 31% in -20-25%* Q309 vs Q308 -35% -31% • Q409 production expected to be down 20-25% • Full year 2009 production projected to be down 20- 25% from 2008 Q1 Q2 Q3 Q4* 2008 Production 2009 Production * Amounts are estimated for Q4 2009 pr
Slide 5: Industry Overview
Industry Overview September 2009 YTD Retail Units North America YTD09 vs YTD08 Tractors – Industry -22% – AGCO Combines – Industry +19% – AGCO Europe Tractors – Industry -14% – AGCO South America Tractors – Industry -22% – AGCO Combines – Industry -49% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2009 $4.8 billion North Q309 vs Q308 Net Sales Excl.Translation South America America 24% EAPAC 15% South North 3% EAME America EAPAC America Consolidated EAME -9% 58% -21% -30% -32% -28% YTD 2008 $6.3 billion YTD 09 vs YTD 08 Net Sales Excl. Translation North North So
Slide 7: Net Sales and Margins
Net Sales and Margins Net Sales Adj. Op. ($M) $425M Margin $2,500 10.0% Adj. Op. Income $2,000 Sales 7.5% 6.8% $1,500 $174M Adj. Op. Margin 5.0% Adj. Op. Margin 3.6% $1,000 2.5% $500 $0 0.0% Q308 Q408 Q109 Q209 Q309 YTD 2008 YTD 2009 7
Slide 8: North American Profitability
North American Profitability North America YTD Operating Income (9 Months Ended September 30 ) • Improved sprayer profitability • Margin expansion on tractors • Logistics/Pricing/Distribution +$27M improvement YTD08 -$10M YTD09 8
Slide 9: Progress in Reducing Working Capital
Progress in Reducing Working Capital Working Capital*/Sales** • Company+Dealer inventory down ~$165M from Q209 14.7% • A/P also reduced due to lower production levels 10.9% • Expect to under- produce retail sales by 10-15% in Q409 Q306 Q307 Q308 Q309 * Working Capital defined as Avg. A/R + Avg. Inv.
Slide 10: Free Cash Flow
Free Cash Flow Q3 Free Cash Flow YTD Free Cash Flow (3 Months Ended September 30 ) (9 Months Ended September 30 ) • Production cuts and inventory reductions generated positive FCF in +$57M Q308 YTD08 YTD09 Q309 -$69M Q309 • Strong focus on working -$108M -$312M capital reduction in Q409 • Targeting
Slide 11: 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 25-30% vs. 2008 – Western Europe down approximately 15-20% vs. 2008 • Currency impacts reduce sales by 6%-7% • 3.0% - 3.
Slide 12: 2009 Targets
2009 Targets Total sales $6.4-$6.6B Diluted EPS $1.30-$1.50 Capital expenditures $200-$225M Free cash flow* $50-$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 presentation.
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M 3 months 3 months ended ended September 30, September 30, 2009 2008 Net cash provided by (used in) operating activities $ 105 $ (13) Less: Capital expenditures (48) (56) Free cash flow $ 57 $ (69) Note: Free cash flow is defined as net cash from oper
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Nine Months Nine Months ended ended September 30, September 30, 2009 2008 Net cash (used in) provided by operating activities $ (162) $ 48 Less: Capital expenditures (149) (156) Free cash flow* $ (312) $ (108) Note: Free cash flow is defined as net c
Slide 15: 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 $ 250-325 $ 291 Less: Capital expenditures (200-225) (251) Free cash flow $ 50-100 $ 40 Note: Free cash flow is defined as net cash from ope
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended September 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 $ 35.0 $ 12.0 $ 0.13 $ 141.8 $ 99.1 $ 1.01 Restructuring and other i
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Nine months ended September 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 $ 174.2 $ 105.3 $ 1.12 $ 425.3 $ 287.6 $ 2.91 Restructuring and other
Slide 18: 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 September 30, 2009 North America $ 292.1 -33.7% - 1.8% South America 331.6 - 28.9% - 8.4% Europe/Africa/Middle East 720.1 -35.1% - 4.7% Asi