Slide 1: Third Quarter 2023 Financial and Operational Results
THIRD QUARTER 2023 Financial and Operational Results
Slide 2: Safe Harbor
Q3 2023 EARNINGS RELEASE Q3 2023 EARNINGS RELEASE SAFE HARBOR Forward-looking statements in this presentation, including statements about our strategic plans and initiatives as well as their financial impacts, demand, product development and capital expenditure plans and timing of those plans and ou
Slide 3: Financial Summary
Q3 2023 EARNINGS RELEASE Q3 23 vs. YTD 23 vs. REPORTED Q3 23 YTD 23 Q3 22 YTD 22 NET SALES $3,455.5 10.7% $10,611.7 21.2% GROSS MARGIN 27.0% 340bps 26.3% 280bps OPERATING INCOME $423.6 27.6% $1,307.3 63.5% OPERATING MARGIN 12.3% 160bps 12.3% 320bps FINANCIAL DILUTED EPS $3.74 $0.56 $11.10 $3.52 SUMM
Slide 4: Industry Overview
Q3 2023 EARNINGS RELEASE NORTH AMERICA WESTERN EUROPE(2) SOUTH AMERICA INDUSTRY OVERVIEW September 2023 Year- to-Date Retail Units Tractors(1) Combines Tractors Combines Tractors Combines Industry Industry Industry Industry Industry Industry (2)% 23% (2)% 30% (8)% (20)% 2023 vs. 2022 2023 vs. 2022 2
Slide 5: 2023 Production
Q3 2023 EARNINGS RELEASE Q3 2023 EARNINGS RELEASE 2023 PRODUCTION AGCO Production Hours Q3 23 Production DOWN 2% vs. Q3 22 +18% +8% -2% Full-Year 2023 Production UP ~5% vs. 2022 Q1 Q2 Q3 Q4E 2022 Production 2023 Production Plan 5
Slide 6: Growth Levers Will Drive Volume and Margin Improvement
Q3 2023 EARNINGS RELEASE 3 GROWTH LEVERS WILL DRIVE VOLUME AND MARGIN IMPROVEMENT 12% ADJUSTED OPERATING GLOBAL MARGIN AT MID-CYCLE BY YEAR FENDT FULL- 2026 LINE GLOBAL 4% - 5% ABOVE INDUSTRY VOLUME PRECISION AG PARTS & GROWTH SERVICES 75% - 100% ANNUAL FREE CASH FLOW CONVERSION SUSTAINABILITY 6
Slide 7: AGCO and Trimble JV Creates a Global Leader in Mixed-Fleet Precision Ag
Q3 2023 EARNINGS RELEASE AGCO AND TRIMBLE JV CREATES A GLOBAL LEADER IN MIXED-FLEET PRECISION AG Joint Venture Will Have Complete Suite of Mixed-Fleet Retrofit Offerings Marrying RADICLE AGRONOMICS two complementary STORAGE PLAN / PREP tech stacks to further Water Management expand AGCO’s mixed-flee
Slide 8: Combination Drives Outsized Precision Ag Revenue Growth for AGCO
Q3 2023 EARNINGS RELEASE COMBINATION DRIVES OUTSIZED PRECISION AG REVENUE GROWTH FOR AGCO Pro Forma Precision Ag Revenue is Now Expected to Exceed $2.0 Billion by 2028 AGCO Precision Ag Revenue >$2B Goal $1.3-1.4B ~$400M 2020 2021 2022 Pro Forma 2023E Pro Forma 2028E AGCO Trimble Precision Ag 8
Slide 9: Regional Net Sales Results
Q3 2023 EARNINGS RELEASE REGIONAL NET SALES RESULTS Q3 23 vs. Q3 22 Net Sales Excluding Currency Translation* 27% NA 9% Sep YTD 7% SA 2023 19% 3% 50% APA $10.6B (15)% EME 17% 6% EME SA APA NA Consolidated YTD 23 vs. YTD 22 Net Sales Excluding Currency Translation* 27% NA Sep YTD SA 49% 2022 APA $8.8
Slide 10: Net Sales, Adjusted Operating Income and Adjusted Operating Margins
Q3 2023 EARNINGS RELEASE NET SALES, ADJUSTED OPERATING INCOME AND ADJUSTED OPERATING MARGINS Q3 22 to Q3 23 September Year-to-Date $4.5 16% $4.0 $3.9B $3.8B $1,327M 14% $3.3B $3.5B Adj. Op. Income* ($M) $3.5 $3.1B 13.1% 12% 12.6% Net Sales ($B) $3.0 12.0% 11.7% Adj. Op. Margin* 10.7% 10% $840M $2.5
Slide 11: Free Cash Flow
Q3 2023 EARNINGS RELEASE Q3 2023 EARNINGS RELEASE SEPTEMBER YTD FREE CASH FLOW FREE CASH FLOW* $0 2022 2023 (Use of Cash) $ Mils ($200) $(155)M ($400) SECOND HALF OF YEAR SEASONALLY STRONGER ($600) for Free Cash Flow generation $(566)M ($800) ($1,000) SUPPLY CHAIN IMPROVING Inventory / Working Capit
Slide 12: 2023 Market Outlook
Q3 2023 EARNINGS RELEASE 2023 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales NORTH AMERICA* SOUTH AMERICA WESTERN EUROPE 137K Down 108K 2%-3% Down 2%-3% 73K Down 2%-3% 2022 2023E 2022 2023E 2022 2023E 12 *Excludes compact tractors
Slide 13: 2023 Key Assumptions
EARNINGS Q3 2023 EARNINGS | INVESTOR RELEASE DAY ENGINEERING EXPENSE + ~20% vs. ‘22 2023 SALES vs. 2022 OPERATING MARGIN 2023 KEY Healthy Large Ag Demand ~12.0% ASSUMPTIONS: No Currency Impact OTHER EXPENSE Pricing ~8% + ~$105 Million Market Share Gains EFFECTIVE TAX RATE ~27% 13
Slide 14: 2023 Outlook
EARNINGS Q3 2023 EARNINGS | INVESTOR RELEASE DAY 2023 OUTLOOK 75% - 100% ~$14.7B ~$15.75 ~$450M Free Cash Net Sales Adjusted EPS* Capex Flow Conversion(1)* Note: (1) Free Cash Flow Conversion is defined as (Cash Flow from Operations less purchases of property, plant and equipment) / Adjusted Net Inc
Slide 15: Appendix
Q3 2023 EARNINGS RELEASE APPENDIX 15
Slide 16: Grain & Protein Results
Q3 2023 EARNINGS RELEASE Q3 2023 EARNINGS RELEASE GRAIN & PROTEIN RESULTS GRAIN / SEED / PROTEIN PRODUCTION EQUIPMENT SEPTEMBER YTD 2023 SALES SEPTEMBER 2023 YTD NET SALES $113M DECREASED ~1% vs. SEPTEMBER YTD 2022 $95M BY REGION Decrease in Sales of Grain and Seed Equipment of ~1% South America $83
Slide 17: Precision Ag Business
Q3 2023 EARNINGS RELEASE Q3 2023 EARNINGS RELEASE PRECISION AG BUSINESS DRIVING HIGH MARGIN EXPANDING TOTAL REVENUE GROWTH ADDRESSABLE MARKET Innovation Across ADDRESSABLE MARKET All Makes $1B* Goal 29% Fertilizer Retrofit Channel Globally ~$800M 1% Machinery (Fixed) to 2% Machinery Fuel Expansion A
Slide 18: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) FREE CASH FLOW Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 Net cash provided by (used in) operating activities $202.7 ($295.1) Less: purchases of property, plant and equipment (357.7) (270.5) Free Ca
Slide 19: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) NET SALES Change due to currency Three Months Ended September 30, translation % change from 2023 2022 2022 $ % North America 941.1 910.5 3.4% 3.2 0.4% South America 719.8 571.2 26.0% 42.7 7.5% Europe/Middle East 1,586.9 1,390.1 1
Slide 20: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) NET SALES Change due to currency Nine Months Ended September 30, translation % change from 2023 2022 2022 $ % North America 2,861.0 2,351.4 21.7% (4.6) (0.2)% South America 1,822.2 1,446.8 25.9% 36.0 2.5% Europe/Middle East 5,281
Slide 21: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) INCOME FROM OPERATIONS NET INCOME NET INCOME PER SHARE Three Months Ended September 30, 2023 2022 Income From Net Net Income Income From Net Net Income (2) (1) (1) (2) (1) (1)(2) Operations Income Per Sh
Slide 22: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) INCOME FROM OPERATIONS NET INCOME Nine Months Ended September 30, NET INCOME PER SHARE 2023 2022 Income From Net Net Income Income From Net Net Income (2) (1) (1)(2) (1)(2) (1) Operations Income Per Shar
Slide 23: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation NET INCOME PER SHARE Full Year Ended December 31, 2023 (1)(2) Net Income Per Share As targeted $ 15.08 Restructuring expenses 0.09 Brazilian tax amnesty program 0.35 Transaction-related costs 0.11 Divestiture-related foreign currency translati
Slide 24: Non-GAAP To GAAP Reconciliation
Q3 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions) FREE CASH FLOW CONVERSION Projected Year Ended December 31, 2023 Net cash provided by (used in) operating activities $1,335 to $1,630 Less: capital expenditures (~$450) Free Cash Flow $885 to $1,180 Adj Net Income ~$1,180 Free Ca