Agco Corporation · NYSE:AGCO
Agco — Shareholder Meeting (March 2021)
20 slides from Agco's shareholder meeting presentation, Mar 30, 2021
Slide 1: Annual Meeting Stockholder Engagement Spring 2021
ANNUAL MEETING STOCKHOLDER ENGAGEMENT SPRING 2021
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 Forward-looking statements in this presentation and the related discussions, include statements regarding our strategy, purpose, vision, demand, product development and capital expenditure plans and timing of those plans, acquisition, expansion and modernization plans an
Slide 3: Executive Summary
EXECUTIVE SUMMARY 3 Farmer-First Strategy Delivering Sustainable Stockholder Value Under the leadership of our new CEO Eric Hansotia, we announced our Farmer-First strategy in March 2021, which is based on our passion for farmers and the important role agriculture plays in securing the global food
Slide 4: AGCO at a Glance
AGCO AT A GLANCE 4 We are a global leader in the design, manufacture and distribution of smart, sustainable agricultural solutions across the entire value chain To be the most trusted partner for industry-leading, smart farming solutions OUR PURPOSE Farmer-focused solutions to sustainably feed our w
Slide 5: Our Farmer-First Strategy
OUR FARMER-FIRST STRATEGY 5 Winning Outcomes Three Pillars to Our Farmer-First Strategy 1. Exceptional customer experiences that reinforce brand promises 2. High quality, smart solutions that create customer value 3. Customer-connected distribution from purchase to replacement • Global Fendt Full li
Slide 6: Long-Term Operating Margin Targets: Roadmap to 10%
LONG-TERM OPERATING MARGIN TARGETS: ROADMAP TO 10% 6 Through our growth initiatives, the optimization of our existing business and the acceleration of our Precision Ag and Digital capabilities, we are targeting mid-cycle operating margins of 10%+ 2016 2018 2019 2020 2021E 5.9%* 4.1%* 7.0%* Margin Ex
Slide 7: Expanding on Our Roadmap to 10% Margins
• Parts & Service • Fendt • NA Large AG • Precision Planting • High growth areas growing faster than rest of business • Higher incremental margins Advantages Growth in Key Areas 7 1 2018 2020 14% Growth ’20 vs ‘18 2X Optimization Impacts 2 Areas to Optimize • South America • Grain & Protein • Massey
Slide 8: Expanding on Our Roadmap to 10% Margins (Cont'd)
Material Cost Improvement and Manufacturing Optimization 8 3 Investments in Technology, R&D and Distribution 4 Global Purchasing Excellence (GPE) • Common components • Common suppliers • Low-cost country sourcing Material savings $30-40M Target + AGCO Production Systems • Utilizing Six Sigma and Lea
Slide 9: A Strong Track Record of Outperformance
-40% 0% 40% 80% 120% 160% 200% Jan-2019 Apr-2019 Jul-2019 Oct-2019 Jan-2020 Apr-2020 Jul-2020 Oct-2020 Jan-2021 A STRONG TRACK RECORD OF OUTPERFORMANCE AGCO 162% Industry Peers2 99% Financial Highlights (in millions, except for share amounts) $9,352 $9,041 $9,150 Net Sales $501 $534 $639 Adjusted Op
Slide 10: Experienced and Diverse Board with Balanced Tenure
EXPERIENCED AND DIVERSE BOARD WITH BALANCED TENURE Committees: ECC, SP Our strong track record of refreshment has resulted in a qualified board reflective of relevant experiences… 10 • Chairman, President and CEO of AGCO Corporation, leading the company’s focus on precision agriculture, which is cri
Slide 11: Experienced and Diverse Board with Balanced Tenure (Cont'd)
EXPERIENCED AND DIVERSE BOARD WITH BALANCED TENURE (CONT’D) …best suited to deliver long-term stockholder value and drive our Farmer-First strategy 11 Committees: CCC, EC, SP • CEO of the U.S. Chamber of Commerce, holding unequaled insight into American industry and commerce as well as international
Slide 12: Governance Practices Informed by Robust Stockholder Engagement
Sondra Barbour New Audit Chair Suzanne Clark New Compensation Chair George Minnich New Finance Chair Michael Arnold New Governance Chair GOVERNANCE PRACTICES INFORMED BY ROBUST STOCKHOLDER ENGAGEMENT 12 The Board has been reviewing, developing and implementing our governance practices throughout the
Slide 13: Strong Independent Board Oversight of Go-Forward Strategy
13 STRONG INDEPENDENT BOARD OVERSIGHT OF GO-FORWARD STRATEGY Robust Lead Independent Director Responsibilities The Board recently further enhanced its Lead Independent Director duties to ensure a robust role for the Lead Independent Director: Presides over executive sessions and at all meetings of
Slide 14: Refreshed Compensation Program in Response to Feedback
In response to stockholder feedback, the Compensation Committee has adjusted metrics for the annual incentive and selected entirely new metrics for the long-term incentive, emphasizing relative performance through both a new relative metric and the addition of a relative TSR modifier For both th
Slide 15: 2020 vs. New 2021 Compensation Plan
Component 2020 Compensation Plan ] New 2021 Compensation Plan How Changes Link to Performance and Strategy Base Salary Targeted at median levels of other industrial companies of similar revenue and complexity Targeted at median levels of other industrial companies of similar revenue and complexi
Slide 16: Our Sustainability Priorities
Advancing Soil Health & Soil Carbon Sequestration Reducing atmospheric greenhouse gas by capturing carbon in agricultural soils Decarbonizing our Operations & Products Reducing CO2 emissions to limit the extent of climate change Prioritizing Animal Welfare in Food Production Leveraging technology to
Slide 17: Sustainability Outcomes to Drive Towards
Sustainable Grade Investment • High-quality data for sustainability goals and metrics • Risk management inclusive of climate risk Growth Through Sustainability Offerings • Technology and solutions to address carbon capture through machinery and digital tools • Proponents of clean tech and climate sm
Slide 18: Appendix
APPENDIX 18
Slide 19: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES (In millions, except per share amounts) 2020 2019 2018 Income from Operations Net Income(1),(2) Net Income per Share(1) Income from Operations Net Income(1),(2) Net Income per Share(1),(2) Income from Operations Net Income(1) Net Income per Share(1) As reported $5
Slide 20: Thank You
Your Agriculture Company ry A,acco A / THANK YOU Wve