Slide 1: Third Quarter 2013 Financial and Operational Results
Third Quarter 2013 Financial and Operational Results
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-looking statements in this presentation, including statements regarding demand for our products and the economic and other factors that drive that demand, product development plans and timing of those plans, acquisition, expansion and modernization plans and our ex
Slide 3: Financial Summary
Financial Summary $M* Q3 13 v YTD YTD 13 vs Q3 13 Q3 12 2013 YTD 12 Net Sales $2,475.9 +7.9% $7,927.2 +9.2% Gross margin 22.5% +107 bps 22.7% +72 bps Operating income $199.0 +42.6% $703.5 +22.5% Operating margin 8.0% +196 bps 8.9% +96 bps Diluted EPS* $1.27 +$0.31 $4.61 +$0.36 *Except per share amou
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units +7% ~Flat • Production in Q3 13 up +7% ~7% vs. Q3 12 − Strong Growth in SA − Modest growth in NA − Slight decline in Europe • Full year 2013 production Q1 Q2 Q3 Q4 expected to increase 5% to 7% vs. 2012 2012 Production 2013 Production 4
Slide 5: Industry Overview
Industry Overview September Year-to-Date Retail Units North America 2013 vs. 2012 Tractors • Industry +12% Combines • Industry + 12% Western Europe 2013 vs. 2012 Tractors • Industry (2%) Combines • Industry (4%) South America 2013 vs. 2012 Tractors • Industry +22% Combines • Industry +50% 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2013 $7.9B Q3 13 vs. Q3 12 Net Sales Excluding Currency Translation* North South America America 26% 20% APAC 5% +35% -2% +11% +9% +10% EAME 49% North EAME South APAC Consol. America America YTD 2012 $7.3B YTD 2013 vs. YTD 2012 Net Sales North Excluding Currency Transl
Slide 7: Net Sales and Operating Margins
Net Sales and Operating Margins Sales Op. September YTD $M Margin $3,500 14% Op. Income Sales $703M $3,000 12% 8.9% $2,500 10% $574M $2,000 8% 7.9% Op. Margin $1,500 Op. Margin 6% $1,000 4% $500 2% $0 0% Q312 Q412 Q113 Q213 Q313 2012 2013 7
Slide 8: GSI Results
GSI Results Sales (YTD Thru September 2013) $607M EAME • YTD 13 sales flat vs YTD 12 SA Protein • Full year GSI sales expected to be up APAC 35% 5-7% vs 2012 • Strong cash flow generation in U.S. • Longer term: NA Grain Storage − Macro trends driving growth in 65% demand for grain storage and protei
Slide 9: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2013 Capex Components $400- 425M New IT/Other $341M Products Capex Dep. & Amort. Manufacturing 08 09 10 11 12 13E 9
Slide 10: Free Cash Flow
Free Cash Flow* YTD Sept. Free Cash Flow Full-Year Free Cash Flow ● Seasonal working $326M capital build in first $200M to YTD 13 half of year YTD 12 $250M ● Second half of year seasonally stronger for free cash flow ● Targeting $200M to $250M free cash flow in 2013 despite increase in capex and ($2
Slide 11: 2013 Market Outlook
2013 Market Outlook Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) N. America S. America Western Europe 210K Up ~5% Down 154K 0-5% Up 15-20% 73K 2012 2013E 2012 2013E 2012 2013E 11
Slide 12: 2013 Outlook Assumptions
2013 Outlook Assumptions • Consolidated pricing impact • ~2.0% • ~15% increase in engineering expenses for new product development and tier 4 emission requirements • Gross margin improvement • ~$10 million of start-up expenses associated with China operations • Effective tax rate ~34% (reflects new
Slide 13: 2013 Outlook
2013 Outlook 2013 Estimates Sales $10.8B to $11.0B Operating margin 8%+ EPS ~$6.00 CAPEX $400-$425 Million Free Cash Flow* $200-$250 Million * Free cash flow is defined as net cash provided by operations less capital expenditures. 13
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, 2013 2012 Net cash provided by (used in) operating activities $ 169.0 $ (33.2) Less: Capital expenditures (263.8) (235.2) Free cash flow $ (94.8) $ (268.4) Note: Free cash flow is define
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Projected Year Year ended ended December 31, December 31, 2013 2012 Net cash provided by operating activities $650 - 675 $ 666.4 Less: Capital expenditures (400.0 - 425.0) (340.5) Free cash flow $ ~250.0 $ 325.9 Note: Free cash flow is defined as net
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three Months Ended Change due to currency September 30, translation % change from 2013 2012 2012 $ % North America $ 686.6 $ 632.2 8.6% (3.3) (0.5)% South America 572.3 479.9 19.3% (74.7) (15.6)% Europe/Africa/Middle East 1,086.4 1,060.5 2.4% 42.2 4.0% As