Slide 1: Fourth Quarter 2021 Financial and Operational Results
FOURTH QUARTER 2021 FINANCIAL AND OPERATIONAL RESULTS
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward-looking statements in this presentation, include statements regarding demand, product development and capital expenditure plans, acquisitions, expansion and modernization plans, production levels, engineering expense, exchange rate impacts, pricing, market share ga
Slide 3: Financial Summary
FINANCIAL SUMMARY $M** Q4 21 v Full Year FY 21 v Reported Q4 2021 Q4 20 2021 FY 20 Net Sales $3,155.2 16.1% $11,138.3 21.7% Gross margin 21.6% -30bps 23.1% +60bps Operating income $264.0 48.3% $1,001.4 67.0% Operating margin 8.4% +180bps 9.0% +240bps Diluted EPS $3.75 $1.97 $11.85 $6.20 Q4 21 v Full
Slide 4: Industry Overview
INDUSTRY OVERVIEW 2021 Full Year Retail Units 2021 vs. 2020 Tractors* Industry 14% North America Combines Industry 24% Tractors Industry 16% Western Europe Combines Industry 3% Tractors Industry 22% South America Combines Industry 20% 4 * Excludes compact tractors
Slide 5: 2021 Production
2021 PRODUCTION AGCO Production Hours +25% +40% +24% +14% (19)% • Q4 21 production up ~24% vs. Q4 20 • Full year 2021 up 25% vs 2020 • Full year 2022 production expected to be up 5-10% vs. 2021 Q1 Q2 Q3 Q4 2020 Production 2021 Production 5
Slide 6: Farmer First – At the Heart of Everything We Do
FARMER FIRST – AT THE HEART OF EVERYTHING WE DO Exceptional Customer High Quality, Customer-Connected Experiences Smart Solutions Distribution Creating a consistently Maximize farmers’ Serve farmers in the exceptional experiences outcomes with innovative, way they choose along for our farmers full-l
Slide 7: Precision Ag Update
PRECISION AG UPDATE Investments Announced Acquisitions 2021 Precision Ag Product Launches Apex.AI Faromatics 23 -- New Product launches: Developer of safety-certified software Smart Solutions for Livestock Farming • Fendt Rogator 900 Focused on Productivity for Operators & • Fendt TI Headland for mo
Slide 8: Precision Ag Update
PRECISION AG UPDATE ● ~4,000 attended Precision Planting’s Winter Conference ● New 2022 planting features introduced ● New Product Roadmap includes retrofit precision spraying products 8 8
Slide 9: Regional Net Sales Results
REGIONAL NET SALES RESULTS Full Year 2021 $11.1B Q4 21 vs. Q4 20 Net Sales Excluding Currency Translation* North America South North 24% EME America APA America Consol. South EME America 56% EME 8% South America 57% APA 12% 7% APA 8% 9% 56% 15% 39% 19% Full Year 2020 $9.1B FY 21 vs. FY 20 Net Sales
Slide 10: Net Sales, Adjusted Operating Income and Operating Margins
NET SALES, ADJUSTED OPERATING INCOME AND OPERATING MARGINS Q4 20 to Q4 21 Full Year Sales Adj. Op. $M Margin* $3,000 12% $1,017M $2,500 10% 9.1 % $2,000 Adj. Op. Margin* 8% $639M Adj. Op. Margin* $1,500 6% 7.0% Net Sales $1,000 4% Adj. Op. Income* $500 2% $0 0% Q420 Q121 Q221 Q321 Q421 2020 2021 10
Slide 11: Grain and Protein Results
GRAIN AND PROTEIN RESULTS Grain / Seed / Protein Production Equipment December 2021 FY Sales By Region ● Full year 2021 net sales increased ~19% vs South America 2020 ‒ Increase in sales of grain and seed equipment of ~30% APA ‒ Increase in sales of protein production North America EME $1,076M 57% A
Slide 12: Liquidity / Free Cash Flow
LIQUIDITY / FREE CASH FLOW* Full Year Free Cash Flow Cashflow / Liquidity ● Supply chain constraints-related inventory 2021 2020 build ● Repaid $276M of term loan facility during $627M Q1 21 ● Returned $493M+ to shareholders $390M – ~$358M in Dividends (including annual variable special dividend) –
Slide 13: 2022 Market Outlook
2022 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales N. America* S. America Western Europe Up 0-5% Up 5-10% 136K 115K 52K Up 5-10% 2021 2022 2021 2022 2021 2022 13 *Excludes compact tractors
Slide 14: 2022 Assumptions: Summary
2022 ASSUMPTIONS: SUMMARY • 2022 sales vs. 2021 + Improved end market demand - Negative currency impact of (3%) + Pricing 7% to 8% + Market share gains • Engineering expense +15-20% vs ‘21 • Operating margin ~9.8% • Effective tax rate 27-28% 14
Slide 15: 2022 Outlook
2022 OUTLOOK Sales Adjusted EPS CAPEX Free Cash Flow* ~$12.3B ~$11.50 ~$325M ~$600M • See reconciliation to GAAP metrics in the appendix of this presentation. 15 • Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures.
Slide 16: 2022 Outlook
2022 OUTLOOK Sales Adjusted EPS CAPEX Free Cash Flow* ~$12.3B ~$11.50 ~$325M ~$600M • See reconciliation to GAAP metrics in the appendix of this presentation. 15 • Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures.
Slide 17: Appendix
APPENDIX 16
Slide 18: Non-GAAP to GAAP Reconciliation: Free Cash Flow
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M December 31,2021 December 31, 2020 Net cash provided by operating activites $ 660.2 896.5 Less: capital expenditures (269.8) (269.9) Free cash flow $ 390.4 $ 626.6 Note: Free cash flow is defined as net cash provided by operating activities less capi
Slide 19: Non-GAAP to GAAP Reconciliation: 2022E Free Cash Flow
NON-GAAP TO GAAP RECONCILIATION Free Cash Flow $M Full Year 2022E Net cash provided by operating activities ~$ 925 Less: Capital expenditures ~$(325) Free cash flow ~$ 600 Note: Free cash flow is defined as net cash provided by operating activities less capital expenditures. 18
Slide 20: Non-GAAP to GAAP Reconciliation: Q4 Net Sales
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Net Sales $M Three Months Ended December 31, Change due to currency translation % change 2021 2020 from 2020 $ % North America $ 674.7 $ 485.1 39.1 % $ 1.5 0.3 % South America 405.6 267.5 51.6 % (12.3) (4.6)% Europe/Middle East
Slide 21: Non-GAAP to GAAP Reconciliation: Full Year Net Sales
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Net Sales $M Years Ended December 31, Change due to currency translation % change 2021 2020 from 2020 $ % North America $ 2,659.2 $ 2,175.0 22.3 % $ 32.4 1.5 % South America 1,307.7 873.8 49.7 % (40.5) (4.6)% Europe/Middle East
Slide 22: Non-GAAP to GAAP Reconciliation: Q4 Income and EPS
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Three Months Ended December 31, 2021 2020 Income From Net Income Income From Net Income Operations(1) Net Income Per Share Operations(1) Net Income Per Share As reported $ 264.0 $ 282.1 $ 3.75 $ 178.0 $ 135.4 $ 1.78 Restructurin
Slide 23: Non-GAAP to GAAP Reconciliation: Full Year Income and EPS
NON-GAAP TO GAAP RECONCILIATION (In millions, except per share amounts) Years Ended December 31, 2021 2020 Income From Net Income Income From Net Net Income Operations Net Income Per Share Operations Income (1) Per Share As reported $ 1,001.4 $ 897.0 $ 11.85 $ 599.7 $ 427.1 $ 5.65 Goodwill impairmen