Agco Corporation · NYSE:AGCO
Agco — Q1 2020 Earnings Presentation
18 slides from Agco's earnings presentation, 2020
Slide 1: First Quarter 2020 Financial and Operational Results
FIRST QUARTER 2020 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 20 v Reported Q1 20 Q1 19 Net Sales $1,928.3 (3.4)% Gross margin 23.4% +50bps Operating income $100.4 +8.7% Operating margin 5.2% +60bps Diluted EPS $0.85 +$0.01 Q1 20 v Adjusted Q1 20 Q1 19 Adj. Operating income* $101.2 +7.5% Adj. Operating margin* 5.2% +50bps Diluted Adju
Slide 4: Industry Overview
INDUSTRY OVERVIEW March 2020 Year-to-Date Retail Units North America 2020 vs. 2019 Tractors* • Industry (6)% Combines • Industry (22)% Western Europe 2020 vs. 2019 Tractors • Industry (4)%** Combines • Industry (17)% South America 2020 vs. 2019 Tractors • Industry (8)% Combines • Industry (27)% * Ex
Slide 5: AGCO Response to COVID-19
AGCO RESPONSE TO COVID-19 Focus on health and well-being of AGCO’s workforce and our communities Support our dealers and farmers to promote food security Secure business continuity and liquidity of AGCO business operations 5
Slide 6: Community Support
COMMUNITY SUPPORT Utilizing Spare Manufacturing Capacity to Support Frontline Workers • Producing and providing components for: ‒ Face shields, hospital beds and emergency respirators Other Community Activities • Employee and Company financial support for local hospitals • Donations of protective cl
Slide 7: Regional Operations Update
REGIONAL OPERATIONS UPDATE Asia / Pacific / Africa China production suspended early Q1; now near normal levels Major factories suspended production late March through most of April; Europe / Middle East now all operational with one exception Primary factories suspended production majority of April;
Slide 8: 2020 Production
2020 PRODUCTION AGCO Production Hours Impact of Production Interruption (Production lost as % of 2019 Production) (9)% Q1 20 April ‘20 North America (5)% (10)% South America (1)% (70)% EME (8)% (80)% APA (34)% (30)% Q1 2019 Production 2020 Production 8 8
Slide 9: Regional Net Sales Results
Regional Net Sales Results March YTD 2020 $1.9B North America 28% South America EME 8% Q1 20 vs. Q1 19 Net Sales 58% APA Excluding Currency Translation* 6% South North EME America APA America Consol. March YTD 2019 $2.0B North America 25% South (5)% 14% (13)% 12% Flat America EME 8% 60% APA 7% EME –
Slide 10: Net Sales, Operating Income and Operating Margins
NET SALES, OPERATING INCOME AND OPERATING MARGINS Sales Q1 19 to Q1 20 Adj. Op. March YTD $M Margin* $3,000 10% Net Sales $2,500 8% $101M $2,000 Adj. Op. Income* 6% $94M $1,500 5.2% Adj. Op. Margin* 4% 4.7% $1,000 Adj. Op. Margin* 2% $500 $0 0% Q119 Q219 Q319 Q419 Q120 2019 2020 * Reflects adjusted
Slide 11: Grain and Protein Results
GRAIN AND PROTEIN RESULTS March 2020 YTD Sales March 2020 YTD net sales decreased ~11% vs 2019 on a constant By Region By Product currency basis $175M $175M ─ Decline in sales of grain and seed equipment of ~21% SA ─ Growth in sales of protein production equipment ~4% APA Protein EAME Longer ter
Slide 12: Liquidity / Free Cash Flow
LIQUIDITY / FREE CASH FLOW* Q1 Free Cash Flow* Liquidity Q1 19 Q1 20 ● Closely managing costs and cash expenditures ● Maintaining dividend ● Suspending share repurchases ● New $520M term loan facility ● $1.2B** Total liquidity at 3-31-20 ‒ $387M Cash ($391M) ‒ $820M** available borrowing ($496M) **I
Slide 13: Returning Cash to Shareholders
RETURNING CASH TO SHAREHOLDERS Dividends Initiated in 2013 Maintaining at current levels Cash to be Returned to Shareholders Share Repurchases Completed nearly $1.4B in last 7+ years Suspended to support liquidity 13
Slide 14: 2020 Key Factors / Focus Areas
2020 KEY FACTORS / FOCUS AREAS • Key Factors – End-market demand – Production / supply chain constraints (Q2 results will be impacted) – COVID-19 impacts on workforce availability • Focus Areas – Support safe working environment – Serve customers and aftermarket demand – accelerate digital – Quick d
Slide 15: Appendix
APPENDIX 15
Slide 16: Free Cash Flow Reconciliation
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Quarter ended Quarter ended March 31, March 31, 2020 2019 Net cash used in operating activities $ (435.3) $ (329.9) Less: Capital expenditures (60.6) (60.9) Free cash flow $ (495.9) $ (390.8) Note: Free cash flow is defined as net cash used in operat
Slide 17: Reconciliation of Currency Translation and Acquisition Impacts to Net Sales
RECONCILIATION OF CURRENCY TRANSLATION AND ACQUISITION IMPACTS TO NET SALES Net Sales $M 17
Slide 18: Non-GAAP to GAAP Reconciliation
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Three Months Ended March 31, 2020 2019 Income From Net Net Income Income From Net Net Income (1) Operations Income Per Share Operations Income Per Share As reported $ 100.4 $ 64.7 $ 0.85 $ 92.4 $ 65.1 $ 0.84 Restructuring expens