Slide 1: First Quarter 2018 Financial and Operational Results
FIRST QUARTER 2018 FINANCIAL AND OPERATIONAL RESULTS
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward-looking statements in this presentation, including statements regarding demand, product development and capital expenditure plans and timing of those plans, acquisition, expansion and modernization plans and our expectations with respect to the costs and benefits o
Slide 3: Financial Summary
FINANCIAL SUMMARY $M** Q1 18 v Q1 18 Q1 17 Net Sales $2,007.5 +23.3% Gross margin 21.3% +100 bps Operating income $50.5 +221.7% Adj. Operating income* $56.4 +120.0% Adj. Operating margin* 2.8% +120bps Diluted Adjusted EPS* $0.35 +$0.37 * Reflects adjusted results. Please see reconciliations provided
Slide 4: Industry Overview
INDUSTRY OVERVIEW March 2018 Year-to-Date Retail Units North America 2018 vs. 2017 Tractors* • Industry ~Flat Combines • Industry (2)% Western Europe 2018 vs. 2017 Tractors • Industry 7%** Combines • Industry 26% South America 2018 vs. 2017 Tractors • Industry (8)% Combines • Industry (11)% * Exclud
Slide 5: 2018 Production
2018 PRODUCTION AGCO Production Hours Up ~7% • Q1 18 production up 7% vs. Q1 17 • Full year 2018 production up approximately 4% vs. 2017 Q1 Q2E Q3E Q4E 2017 Production 2018 Production 5 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results March YTD 2018 $2.0B North America 25% South Q1 18 vs. Q1 17 Net Sales America Excluding Currency Translation* EME 9% 58% APA 8% South North EME America APA America Consol. March YTD 2017 $1.6B +14% (13)% +12% +30% +14% North America 2 5. 9 23% South America EME 14% 55% AP
Slide 7: Net Sales and Operating Margins
NET SALES AND OPERATING MARGINS Sales Q1 17 to Q1 18 Adj. Op. March YTD $M Margin* $2,500 10% $56M $2,000 8% Adj. Op. Income* Sales $1,500 6% $26M 2.8% $1,000 4% Adj. Op. Margin* Adj. Op. Margin* 1.6% $500 2% $0 0% Q117 Q217 Q317 Q417 Q118 2017 2018 * Reflects adjusted results, which exclude restruc
Slide 8: GSI Results
GSI RESULTS 2018 Sales Q1 2018 sales down 2% vs Q1 2017 on a constant currency basis By Region By Product ─ Growth in sales of protein production equipment in APA & EME $206M $206M and grain and seed in NA & SA SA ─ Declines in sales of grain and seed equipment in EME & APA and protein production
Slide 9: Investing for Growth
INVESTING FOR GROWTH CAPEX Engineering Expenses ~$392M ~$370M $323M Capex R&D Exp. 4.0% ~$250M Dep. & Amort. $204M % of Sales. $128M $129M 2.4% 06 07 08 09 10 11 12 13 14 15 16 17 18E 06 07 08 09 10 11 12 13 14 15 16 17 18E 9 9
Slide 10: Free Cash Flow
FREE CASH FLOW* Thousands Q1 Free Cash Flow Full-Year Free Cash Flow $374M ● Second half of year seasonally Q1 17 Q1 18 stronger for free cash flow ~$225M ● Includes inventory build for emissions transition stock ● Targeting ~$225M free cash flow in 2018 ($309M) ($407M) 2017 2018E Note: Free cash fl
Slide 11: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Dividend Initiated in 2013 Ambition to grow Cash to be Returned to Share Repurchase Shareholders ~$1 billion repurchased over last 4 years $300M program authorized through December 2019 11
Slide 12: 2018 Market Outlook
2018 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) N. America* S. America Western Europe 142K ~Flat Up 88K 0 to 5% 56K ~Flat 2017 2018E 2017 2018E 2017 2018E 12 *Excludes 12 compact tractors
Slide 13: 2018 Assumptions: Summary
2018 ASSUMPTIONS: SUMMARY 2018 sales up ~12% vs 2017 – Relatively stable end-market demand – Pricing +1.5% to +1.75% – Positive currency translation +4.5% – Acquisitions +2.5% Engineering ~4% of sales (up ~$45M vs 2017) Operating margin improvement Effective tax rate ~37% 13
Slide 14: 2018 Outlook
2018 OUTLOOK 2018 Estimates Sales ~$9.3B Adjusted EPS ~$3.70 CAPEX ~$250M Free Cash Flow* ~$225M 14 * Free cash flow is defined as net cash from operations less capital expenditures. See reconciliation to GAAP metrics in the appendix of this presentation
Slide 15: Appendix
APPENDIX 15
Slide 16: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Quarter ended Quarter ended March 31, March 31, 2018 2017 Net cash used in operating activities $ (361.3) $ (251.4) Less: Capital expenditures (46.1) (57.1) Free cash flow $ (407.4) $ (308.5) Note: Free cash flow is defined as net cash used in operat
Slide 17: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Year ended Year ended December 31, December 31, 2018E 2017 Net cash provided by operating activities $ ~475.0 $ 577.6 Less: Capital expenditures ~(250.0) (203.9) Free cash flow $ ~225.0 $ 373.7 Note: Free cash flow is defined as net cash provided by
Slide 18: Reconciliation of Currency Translation and Acquisition Impacts to Net Sales
RECONCILIATION OF CURRENCY TRANSLATION AND ACQUISITION IMPACTS TO NET SALES AGCO Regional Net Sales (in millions) % % change change from 2017 due % change from from to currency 2017 due to Three Months Ended March 31, 2018 2017 2017 translation acquisitions North America $ 502.9 $ 382.6 31.4% 1.9% 1
Slide 19: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Three Months Ended March 31, 2018 2017 Income From Net Income Income From Net Loss Per Operations Net Income Per Share Operations Net Loss Share As reported $ 50.5 $ 24.3 $ 0.30 $ 15.7 $ (10.1) $ (0.13) Restructuring expenses 5.
Slide 20: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION 2018 Net Income Per Share(1) As targeted $ 3.65 Restructuring expenses 0.05 As adjusted targeted $ 3.70 (1) Net income per share amount is after tax. 20