Slide 1: First Quarter 2009 Financial and Operational Results
First Quarter 2009 Financial and Operational Results April 28, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including the projections of future sales, earnings, growth, production levels, work force adjustments, plant re-arrangements, factory process improvements, market conditions, industry demand, weather conditions, availability of fi
Slide 3: Financial Summary
Financial Summary Q109 vs Q109 Q108 Q108 Net Sales ($Ms) 1,579.0 1,786.6 (11.6%) Gross Profit ($Ms) 272.3 315.2 (13.6%) Operating Inc. ($Ms) 58.6 94.2 (37.8%) Operating Margin 3.7% 5.3% (1.6%) Diluted EPS $0.36 $0.59 (39.0%) 3
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units -5% • Production down 5% in Q109 vs Q108 - 30%* • Q209 production expected to be down 30% vs Q208 • Full year 2009 production projected to be down 15-20% from 2008 Q1 Q2* Q3* Q4* 2008 Production 2009 Production * Amounts are estimated for Q2-Q4 2009 produc
Slide 5: Industry Overview
Industry Overview March 2009 YTD Retail Units North America YTD09 vs YTD08 Tractors – Industry -20% – AGCO Combines – Industry +33% – AGCO Europe Tractors – Industry -8% – AGCO South America Tractors – Industry -19% – AGCO Combines – Industry -44% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results Q1 2008 $1.8 billion North South America Q109 vs Q108 Net Sales Excl.Translation America 21% EAPAC 18% 2% +13% EAME +9% 59% +3% -27% -2% Q1 2009 $1.6 billion North South America America 25% EAPAC EAME South EAPAC North Consolidated 11% 3% America America EAME 61% EAME – Eu
Slide 7: Sales and Margins
Sales and Margins Continuing to Invest YTD Op. Margins $2,500.0 10.0% $94M Sales $2,000.0 Op. Income 7.5% $59M $1,500.0 5.3% Op. Margin 5.0% 3.7% Op. Margin $1,000.0 2.5% $500.0 $0.0 0.0% Q108 Q208 Q308 Q408 Q109 2008 2009 7
Slide 8: Progress in Reducing Working Capital
Progress in Reducing Working Capital Working Capital*/Sales** 11.4% • 2009 focus to reduce working capital in line with demand 7.7% • Q209 production cuts 7.0% expected to have significant impact on Q209 sales and earnings Q107 Q108 Q109 * Working Capital defined as Avg. A/R + Avg. Inv. – Avg. A/P –
Slide 9: Free Cash Flow
Free Cash Flow Q1 Free Cash Flow Full Year Free Cash Flow (3 Months Ended March 31 ) (Year Ended December 31 ) $150M-$200M* • Seasonal working capital build in first half of year • Second half of year $40M seasonally stronger for Free Q108 Q109 Cash Flow 2008 2009E • Strong focus on working capital
Slide 10: 2009 Assumptions
2009 Assumptions Summary • Significant uncertainty due to financial crisis and global recession • Agricultural industry sales – NA down approximately 15-20% vs. 2008 – SA down 25-35% vs. 2008 – Western Europe down approximately 10-15% vs. 2008 • Currency impacts reduce sales by 11% • 4% price increa
Slide 11: 2009 Targets
2009 Targets 2009 Estimates Total sales $6.7B-$7.0B Diluted EPS $2.00-$2.50 Capital expenditures $275M-$300M Free cash flow* $150M-$200M *Free cash flow is defined as net cash from operations less capital expenditures. 11
Slide 12: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Free Cash Flow Year Year (in Millions) 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: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Free Cash Flow Three Months Three Months (in Millions) ended ended March 31, March 31, 2009 2008 Net cash used in operating activities $ (447) $ (282) Less: Capital expenditures (48) (46) Free cash flow $ (495) $ (328) Note: Free Cash flow is defined as net cash used