Agco Corporation · NYSE:AGCO
Agco — Q1 2023 Earnings Presentation
20 slides from Agco's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Financial and Operational Results
FIRST QUARTER 2023 Financial and Operational Results
Slide 2: Safe Harbor
Q1 2023 EARNINGS RELEASE Q1 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
Q1 2023 EARNINGS RELEASE REPORTED Q1 23 Q1 23 vs. Q1 22 NET SALES $3,333.5 24.1% GROSS MARGIN 25.6% 210bps OPERATING INCOME $387.3 89.9% OPERATING MARGIN 11.6% 400bps FINANCIAL DILUTED EPS $3.10 $1.07 SUMMARY $M** ADJUSTED Q1 23 Q1 23 vs. Q1 22 ADJ. OPERATING INCOME* $388.8 60.1% ADJ. OPERATING MARG
Slide 4: Industry Overview
Q1 2023 EARNINGS RELEASE NORTH AMERICA WESTERN EUROPE SOUTH AMERICA INDUSTRY OVERVIEW March 2023 Year-to- Date Retail Units Tractors* Combines Tractors Combines Tractors Combines Industry Industry Industry Industry Industry Industry (3)% 117% (3)% 60% (3)% 18% 2023 vs. 2022 2023 vs. 2022 2023 vs. 20
Slide 5: 2023 Production
Q1 2023 EARNINGS RELEASE Q1 2023 EARNINGS RELEASE 2023 PRODUCTION AGCO Production Hours Q1 23 Production UP 8% vs. Q1 22 +8% Full Year 2023 Production UP 3-5% vs. 2022 Q1 Q2E Q3E Q4E 2022 Production 2023 Production Plan 5
Slide 6: Focus on Growing Global Fendt Full-Line
Q1 2023 EARNINGS RELEASE FOCUS ON GROWING GLOBAL FENDT FULL-LINE HIGH MARGIN FENDT 200 VARIO SERIES NORTH AMERICAN DEBUT BUSINESSES ▪ Introduced at the 2023 World Ag Expo, popular European tractor carries a premium price and high margin GLOBAL FENDT FULL- LINE ▪ Lightweight and maneuverable tractor
Slide 7: 2022 Sustainability Results Highlights
Q1 2023 EARNINGS RELEASE 2022 SUSTAINABILITY RESULTS HIGHLIGHTS Environmental Health and Safety (H&S) Social Reduction in emission intensity Sites using 100% renewable energy 2022 31% 2022 17 TARGET 2021 13% 2021 2020 6 10 14% 30% reduction in incident rate, of the Board are women ahead of our targe
Slide 8: Regional Net Sales Results
Q1 2023 EARNINGS RELEASE REGIONAL NET SALES RESULTS 28% North America Q1 South America 51% 2023 APA $3.3B EME 15% Q1 23 vs. Q1 22 Net Sales Excluding Currency Translation* 6% 42% 32% 30% (4)% 30% 26% North America EME South America APA North America Consolidated Q1 South America 52% 2022 APA $2.7B E
Slide 9: Net Sales, Adjusted Operating Income and Operating Margins
Q1 2023 EARNINGS RELEASE NET SALES, ADJUSTED OPERATING INCOME AND OPERATING MARGINS Q1 22 to Q1 23 March Year-to-Date $4 $3.9B 14% $4 $3.3B $389M $3.1B 12% $2.9B Adj. Op. Income* ($M) 12.0% 11.7% $3 $2.7B Net Sales ($B) 10% 10.7% Adj. Op. Margin* $3 9.1% 9.0% 8% $2 $243M 11.7% 6% $2 9.1% 4% $1 $1 2%
Slide 10: Precision Ag Business
Q1 2023 EARNINGS RELEASE Q1 2023 EARNINGS RELEASE PRECISION AG BUSINESS DRIVING HIGH MARGIN EXPANDING TOTAL REVENUE GROWTH ADDRESSABLE MARKET Innovation Across ADDRESSABLE MARKET All Makes $1B* 29% Fertilizer Retrofit Channel Globally 1% Machinery (Fixed) 2% $800M+ Machinery Fuel Expansion Across 3%
Slide 11: Free Cash Flow
Q1 2023 EARNINGS RELEASE Q1 2023 EARNINGS RELEASE Q1 FREE CASH FLOW FREE CASH FLOW* 2022 2023 FIRST QUARTER SEASONALLY WEAKEST for Free Cash Flow generation $(643)M $(682)M SUPPLY CHAIN CONSTRAINTS Related Inventory Build FULL YEAR FREE CASH FLOW Targeting 75% - 100% Free Cash Flow conversion in 202
Slide 12: 2023 Market Outlook
Q1 2023 EARNINGS RELEASE 2023 MARKET OUTLOOK Regional Market Outlook – Industry Unit Retail Tractor Sales NORTH AMERICA SOUTH AMERICA WESTERN EUROPE 137K ~Flat 108K ~Flat 73K +0-5% 2022 2023E 2022 2023E 2022 2023E 12 *Excludes compact tractors
Slide 13: 2023 Key Assumptions
EARNINGS Q1 2023 EARNINGS | INVESTOR RELEASE DAY ENGINEERING EXPENSE + ~20% vs. ‘22 2023 SALES vs. 2022 OPERATING MARGIN 2023 KEY Healthy Large Ag demand ~10.9% ASSUMPTIONS: Currency Impact of +~1% OTHER EXPENSE Pricing ~8% Market Share Gains +$50 Million EFFECTIVE TAX RATE 27% - 28% 13
Slide 14: 2023 Outlook
EARNINGS Q1 2023 EARNINGS | INVESTOR RELEASE DAY 2023 OUTLOOK 75% - 100% ~$14.5B ~$14.40 ~$375M Free Cash Net Sales Adjusted EPS* Capex Flow Conversion(1)* Note: (1) Free Cash Flow conversion is defined as (Cash Flow from Operations less Capex) / Adj. Net Income 14 * See reconciliations in the appen
Slide 15: Appendix
Q1 2023 EARNINGS RELEASE APPENDIX 15
Slide 16: Grain & Protein Results
Q1 2023 EARNINGS RELEASE Q1 2023 EARNINGS RELEASE GRAIN & PROTEIN RESULTS GRAIN / SEED / PROTEIN PRODUCTION EQUIPMENT Q1 2023 SALES Q1 2023 NET SALES $41M INCREASED ~7% vs. Q1 2022 BY REGION $34M Increase in Sales of Grain and Seed Equipment of ~12% South America $147M $256M APA $34M EME Decrease in
Slide 17: Non-GAAP To GAAP Reconciliation: Free Cash Flow
Q1 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation FREE CASH FLOW $M Quarter ended Quarter ended March 31, 2023 March 31, 2022 Net cash used in operating activities ($557.1) ($576.5) Less: capital expenditures (125.3) (66.3) Free cash flow ($682.4) ($642.8) 17 Note: Free cash flow is defined a
Slide 18: Non-GAAP To GAAP Reconciliation: Net Sales
Q1 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) NET SALES $M Three Months Ended March 31, Change due to currency translation % change from 2023 2022 2022 $ % North America 923.1 701.0 31.7% (5.0) (0.7)% South America 503.8 356.4 41.4% (2.9) (0.8)% Eur
Slide 19: Non-GAAP To GAAP Reconciliation: Income and EPS
Q1 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 March 31, 2023 2022 Income From (1) Net Income Per Income From (1) Net Income Per (1) Net Income (1) (1) Net Income Operations Sh
Slide 20: Non-GAAP To GAAP Reconciliation: Free Cash Flow Conversion
Q1 2023 EARNINGS RELEASE Non-GAAP To GAAP Reconciliation (In millions, except per share amounts) Free Cash Flow Conversion Projected Year Ended December 31, 2023 Net cash provided by operating activities $1,125 to $1,375 Less: capital expenditures (~$375) Free cash flow $750 to $1,000 Net income ~$1