Deere & Company · NYSE:DE
Deere & — Investor Presentation (December 2014)
28 slides from Deere &'s investor presentation, December 2014
Slide 1: John Deere Strategy Overview
John Deere Committed to Those Linked to the Land Strategy Overview Deere & Company December 2014
Slide 2: Safe Harbor Statement & Disclosures
Safe Harbor Statement & Disclosures This presentation includes forward-looking comments subject to important risks and uncertainties. It may also contain financial measures that are not in conformance with accounting principles generally accepted in the United States of America (GAAP). Refer to Deer
Slide 3: Table of Contents
Table of Contents Slide John Deere Strategy 4 Macroeconomic Tailwinds 19 Appendix 25 3 | Deere & Company | December 2014
Slide 4: John Deere Strategy
John Deere Strategy ~@é JOHN DEERE
Slide 5: The John Deere Strategy
The John Deere Strategy * * * SVA: Shareholder Value Added 5 | Deere & Company | December 2014
Slide 6: Adapting to Win
The John Deere Strategy Adapting to Win Markets worth winning Integrated solutions Industry leading innovation Distinctive quality Developing global talent 6 | Deere & Company | December 2014
Slide 7: Our Purpose: Committed to those linked to the land
The John Deere Strategy Our Purpose: Committed to those linked to the land Long-term global macro-trends present significant opportunities for John Deere – Global population and income growth – Global infrastructure needs New customer segments 8570RT Tractor Technology advances 744K Wheel Loader S67
Slide 8: Realizing Sustainable Growth Through Global Expansion
The John Deere Strategy Realizing Sustainable Growth Through Global Expansion Sustainable SVA* growth is delivered by distinctively serving our customers, employees, and investors Extend and enhance our financial and operating achievements of recent years Our challenge: to capture anticipated tailwi
Slide 9: Agricultural and Construction Equipment Aspirations
The John Deere Strategy Agricultural and Construction Equipment Aspirations Agricultural Equipment Solutions Strategy – Defend and grow market share in developed markets – Profitably grow market share in developing markets 9570T Tractor - USA S660 Combine – Latin America Construction Equipment Solut
Slide 10: Equipment Operations Performance Target Aspirations
The John Deere Strategy Performance Target Aspirations Sales U.S. & Canada – Enterprise net sales of $50 billion Outside U.S. & Canada at mid-cycle by 2018 2010 Normal Volume 2018 Normal Volume $25 billion $50 billion Profitability 12.3% 13.0% 13.1% 14.5% 13.0% Operations Equipment 6.6% – Operating
Slide 11: Integrated Enterprise
The John Deere Strategy Integrated Enterprise Integrated portfolio of businesses, each with a vital and specific role Global Growth Businesses Agricultural and Construction Equipment Solutions – Leverage global investments to support profitable growth 8295R Tractor 410K Backhoe Loader Complementary
Slide 12: Critical Success Factors
The John Deere Strategy Critical Success Factors Developing the capabilities essential to reaching our goals Deep Customer Understanding (DCU) - Understanding our customers’ most important local needs, and translating these into winning products and services better than any competitor Deliver Custom
Slide 13: Exceptional Operating Performance - OROA
The John Deere Strategy Foundational Success Factors Exceptional Operating Performance - Equipment Operations 27.7% OROA* in 2014 35% 2013 30% 2011 2012 2010 2014 2008 2007 28% 25% 2004 2006 2005 20% 2009, adjusted*** 20% 15% 2009 12% OROA (SVA** Neutral) 10% 12% 2003 2002 5% 0% 2001 -5% 80% 100% 12
Slide 14: Higher Net Cash Flow, More Consistently
The John Deere Strategy Foundational Success Factors Exceptional Operating Performance - Equipment Operations Higher Net Cash Flow, More Consistently 5,000 Adoption of SVA* Model 4,500 4,000 Sale of Trade Receivables to 3,500 John Deere Financial 3,000 $ Millions 2,500 2,000 1,500 1,000 500 0 1993 1
Slide 15: Disciplined SVA Growth - Equipment Operations
The John Deere Strategy Foundational Success Factors Disciplined SVA* Growth - Equipment Operations SVA Journey, 1993 - 2014 3,600 Adoption of SVA Model 3,200 2,800 2,400 2,000 SVA ($ millions) 1,600 1,200 800 400 0 -400 -800 -1,200 -1,600 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 16: Aligned High-Performance Teamwork
The John Deere Strategy Foundational Success Factors Aligned High-Performance Teamwork − Integral part of business strategy, reinforced with compensation − Global Performance Management reinforces alignment − Base pay changes linked to achieving goals STI: Short-Term Incentive – Bonus focuses on ORO
Slide 17: Measures
The John Deere Strategy Measures Commitment to execute and monitor all initiatives critical to our success Performance measures – Traditional financial measures based on what we are delivering today to our stakeholders Metric Target Sales Net Sales Growth Target $50B* (2018, at mid-cycle) Profitabil
Slide 18: In Summary
The John Deere Strategy In Summary Accelerated emphasis on global growth – $50 billion mid-cycle sales by 2018 – Approximately 50% outside of U.S. & Canada – Capitalize on increased global demand for food, shelter and infrastructure Focus on improved profitability – 12% mid-cycle margin Continued ad
Slide 19: Macroeconomic Tailwinds
Macroeconomic Tailwinds Support John Deere’s Global Growth Businesses
Slide 20: Long-Term Macroeconomic Tailwinds
Long-Term Macroeconomic Tailwinds Support Global Growth Opportunities Population growing in size and affluence – By 2050, world population will exceed 9.5 billion, up from ~7 billion today, with most growth in Asia and Africa – Large middle class emerging in Latin America, China, India, and other de
Slide 21: Strong Global Tailwinds in Ag & Construction
Strong Global Tailwinds in Ag & Construction Significant Growth from Developing Economies While several sectors are expected to grow in the G-20 countries from 2013- . . Agriculture and Construction will derive significant growth from the 2020 . . . BRIIC countries Absolute increase in CAGR Share of
Slide 22: Developing Economies Growing Faster
Developing Economies Growing Faster While developed economies have ... their growth will slow always accounted for a larger significantly, relative to that share of GDP . . . of developing economies Real GDP1 CAGR, Real GDP1 CAGR, $ Trillions 1970-2010 $ Trillions 2010-2044 Percent Percent 2.9 179.8
Slide 23: Dynamics of Food Demand
Dynamics of Food Demand Per Capita Income Services >$10.00 per day Processed $2.50-$10.00 Products per day 24% of world’s population Livestock $1.25-$2.50 Products (Most hunger problems solved at $2.50 threshold) per day 17% of world’s population <$1.25 Commodities (2/3rds experience hunger & per da
Slide 24: Global Construction and Infrastructure Needs
Global Construction and Infrastructure Needs Infrastructure is expected to be the fastest growing segment of construction Residential Non-residential Infrastructure CAGR CAGR CAGR 1998- 2010- 1998- WW Construction Spending 2010 2022 2022 Gross output, $ 2010 Billions Percent Percent Percent 2.9% 2.0
Slide 25: Appendix
~@é JOHN DEERE
Slide 26: 2009 OROA Reconciliation to GAAP
2009 OROA* Reconciliation to GAAP Equipment Operations (millions of dollars unless stated otherwise) Exclude Goodwill Impairment & 2009, as Voluntary Employee- 2009, as Equipment Operations Reported Separation Adjusted Net Sales 20,756 20,756 Average Identifiable Assets With Inventories at LIFO 9,64
Slide 27: SVA Reconciliation to GAAP
SVA* Reconciliation to GAAP Equipment Operations (millions of dollars unless stated otherwise) Equipment Operations 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Net Sales 6,479 7,663 8,830 9,640 11,082 11,926 9,701 11,169 11,077 11,703 13,349 Average Identifiable Assets With Inventories at
Slide 28: ©€ JOHN DEERE
©€ JOHN DEERE
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