Agco Corporation · NYSE:AGCO
Agco — Q4 2010 Earnings Presentation
18 slides from Agco's earnings presentation, Feb 8, 2011
Slide 1: Fourth Quarter 2010 Financial and Operational Results
Fourth Quarter 2010 Financial and Operational Results February 8, 2011
Slide 2: Forward Looking Statements
Forward Looking Statements Statements that are not historical facts, including the projections of earnings per share, sales, market demand, pricing benefits, margin and market share improvements, currency impacts, investment in new products, market growth, productivity and purchasing initiatives, ca
Slide 3: Financial Summary
Financial Summary $ Millions, Q410 vs. YTD YTD10 vs. except per share values Q410 Q409 2010 YTD09 Net Sales 2,168.0 +18.7% 6,896.6 +5.8% Gross Profit 409.2 +53.7% 1,258.7 +17.4% Adj. Op. Inc.* 143.5 +150.9% 328.6 +41.7% Adj. Op. Margin* 6.6% +349 bps 4.8% +121 bps Adj. Diluted EPS* $0.88 +$0.46 $2.3
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units +28% +35% Flat -20% • Production Flat in Q410 vs. Q409 • Increases in Q4 in EAME and NA offset decrease in SA • Full year 2010 production increased 8% vs. 2009 Q1 Q2 Q3 Q4 2009 Production 2010 Production EAME = Europe/Africa/Middle East 4
Slide 5: Industry Overview
Industry Overview December 2010 YTD Retail Units North America YTD10 vs. YTD09 • Industry +5% Tractors • AGCO • Industry +9% Combines • AGCO Western Europe YTD10 vs. YTD09 • Industry -10% Tractors • AGCO South America YTD10 vs. YTD09 • Industry +31% Tractors • AGCO • Industry +29% Combines • AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2010 $6.9B Q410 vs. Q409 Net Sales Excluding Currency Translation* North America South 22% +47% ROW America 4% +29% +23% 25% +1% ROW EAME EAME South North Consol. 49% America America -16% YTD 2009 $6.5B YTD10 vs. YTD09 Net Sales Excluding Currency Translation* North So
Slide 7: Net Sales and Margins
Net Sales and Margins Sales Adj. Op. December YTD $M Margin* $328.6M Sales Adj. Adj. Op. Op. Inc.* Inc.* $231.9M 4.8% 3.6% Adj. Op. Margin* Adj. Op. Margin* YTD 2009 YTD 2010 * Reflects adjusted results, which exclude restructuring and other infrequent items. Please see the reconciliations to GAAP m
Slide 8: Improved North American Profitability
Improved North American Profitability North American Sales and Margins $1.8B $1.5B $1.4B $1.5B • Significant progress $1.3B over last 4 years • Improvement in 2009 and 2010 despite 3.3% declining or flat sales • Progress driven by: – New products 1.5% – Factory productivity 0.5% – Logistics savings
Slide 9: Free Cash Flow
Free Cash Flow* YTD Free Cash Flow (12 Months Ended December 30) +$272M • Strong fourth quarter operating income and +$141M inventory management produced robust full year free cash flow • Targeting positive FCF for 2011 2009 2010 Note: Free cash flow is defined as net cash used in operating activiti
Slide 10: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest $250- 300M $236M Capex $207M • Factory efficiency initiatives deferred $167M in 2010 $141M $129M • 2011 CAPEX will $88M include plant $78M investments in Dep. & Amort. Germany and China 2004 2005 2006 2007 2008 2009 2010 2011E 10
Slide 11: 2011 Financial Assumptions – Summary
2011 Financial Assumptions – Summary • Sales growth from exchange, acquisitions and market share gains • 10-15% increase in engineering expense for new product development and tier 4 emission requirements • Gross margin improvement • More normal seasonality in 2011 • Effective tax rate 35-37% • Addi
Slide 12: 2011 Outlook
2011 Outlook 2011 Estimates Net Sales +10% to 15% Operating Margin +50 to 100 bps EPS $2.50 to $2.75 CAPEX $250-$300 Million Free Cash Flow* Approx. $100 Million Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures. .* Please see reconciliation to GA
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Year Year ended ended December 31, December 31, 2010 2009 Net cash provided by operating activities $ 438.7 $ 347.9 Less: Capital expenditures (167.1) (206.6) Free cash flow $ 271.6 $ 141.3 Note: Free cash flow is defined as net cash provided by (use
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended December 31, 2010 2009 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 143.5 $ 85.9 $ 0.88 $ 57.2 $ 40.3 $ 0.42 Restructuring and other in
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Years ended December 31, 2010 2009 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 328.6 $ 223.6 $ 2.32 $ 231.9 $ 145.5 $ 1.55 Restructuring and other infreq
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation AGCO Regional Sales (in millions) % change from 2009 due to % change currency (1) Net sales from 2009 translation Three months ended December 31, 2010 North America $ 462.9 48.6% 1.3% South America 440.1 2.6% 1.7% Europe/Africa/Middle East 1,185.5 19.5% (9.4%) Rest of
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three months ended December 31, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 462.9 $ 458.7 1.3% South America 440.1 433.0 1.7% Europe/Africa/Middle East 1,185.5 1,278.5 (9.4)% Rest of
Slide 18: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Year ended December 31, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 1,489.3 $ 1,461.2 1.9% South America 1,753.3 1,590.3 14.0% Europe/Africa/Middle East 3,364.4 3,544.7 (5.0)% Rest o