Slide 1: First Quarter 2015 Financial and Operational Results
First Quarter 2015 Financial and Operational Results
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-looking statements in this presentation, including statements regarding demand for our products and the economic and other factors that drive that demand, product development plans and timing of those plans, acquisition, expansion and modernization plans and our ex
Slide 3: Financial Summary
Financial Summary $M** Q1 15 vs Q1 2015 Q1 14 Net Sales $1,702.6 -27.0% Gross margin 20.4% -160bps Adj. Operating income* $57.4 -63.1% Adj. Operating margin* 3.4% -330bps Diluted Adjusted EPS* $0.43 -$0.60 **Except per share amounts * Reflects adjusted results, which exclude restructuring and other
Slide 4: Industry Overview
Industry Overview March Year-to-Date Retail Units North America 2015 vs. 2014 Tractors* • Industry (10%) Combines • Industry (44%) Western Europe 2015 vs. 2014 Tractors • Industry (12%) Combines • Industry (13%) South America 2015 vs. 2014 Tractors • Industry (12%) Combines • Industry (35%) * Exclud
Slide 5: 2015 Production Decline is Front-End Loaded
2015 Production Decline is Front-End Loaded AGCO Production Hours Down Down 21% 15-20% • Q1 15 production down ~21% vs. Q1 14 • Full year 2015 production down 12-14% vs 2014 Q1 Q2E Q3E Q4E 2014 Production 2015 Production 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results March YTD 2015 $1.7B North America 28% South America EAME 15% 53% APAC Q1 2015 vs. Q1 2014 Net Sales 4% Excluding Currency Translation* EAME South APAC North Consol. America America March YTD 2014 $2.3B North -10% -14% -15% -15% America -25% 28% South America EAME 15% 53%
Slide 7: Net Sales and Operating Margins
Net Sales and Operating Margins Sales Adj. Op. March YTD $M Margin* $3,500 14% $156M $3,000 12% $2,500 Sales 10% 6.7% $57M Adj. Op. Margin* 3.4% $2,000 Adj. Op. Margin* 8% $1,500 6% Adj. Op. Income* $1,000 4% $500 2% $0 0% Q114 Q214 Q314 Q414 Q115 2014 2015 * Reflects adjusted results, which exclude
Slide 8: GSI Results
GSI Results Sales (YTD 2015) $176M • Q1 2015 sales ~Flat vs Q1 2014 EAME − Growth in NA and SA SA Protein 34% − Declines in EAME and APAC APAC • Strong cash flow generation in U.S. • Longer term: NA Grain − Macro trends driving growth in Storage demand for grain storage and protein 66% production −
Slide 9: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2015 Capex Components IT / Other New $302M ~$300M Products Capex Dep. & Amort. $129M Manufacturing 06 07 08 09 10 11 12 13 14 15E 9
Slide 10: Free Cash Flow
Free Cash Flow* Q1 Free Cash Flow Full-Year Free Cash Flow Thousands ● Smaller seasonal Q1 14 Q1 15 ~$300M working capital build in first half of year ● Second half of year seasonally stronger for $137M free cash flow ● Targeting ~$300M free ($349M) cash flow in 2015 after funding capex 2014 2015E (
Slide 11: Returning Cash to Shareholders
Returning Cash to Shareholders Cash to be Returned to Shareholders Dividend Share Repurchase • Initiated in 2013 • New $500M share repurchase program • Raised in Q1 14 and Q1 15 through 2016 11
Slide 12: 2015 Assumptions – Summary
2015 Assumptions – Summary • Sales down 19-21% (was 15-17%) – softer end markets – 2% pricing – impact of currency translation expected to be ~11% (was 8%) • Engineering ~3.6% of sales • Operating margins of 5.75% to 6.0% • Pre-tax restructuring charges of approximately $15M in 2015 • Effective tax
Slide 13: 2015 Preliminary Market Outlook
2015 Preliminary Market Outlook Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) N. America* S. America Western Europe 143K Down 5-10% 113K Down 5-10% 72K Down ~15% 2014 2015E 2014 2015E 2014 2015E *Excludes compact tractors 13
Slide 14: 2015 Outlook
2015 Outlook 2015 Estimates Sales $7.7B to $7.9B Adjusted EPS ~$3.00 CAPEX ~$300M Free Cash Flow* ~$300M * Free cash flow is defined as net cash from operations less capital expenditures. See reconciliation to GAAP metrics in the appendix of this presentation. 14
Slide 15: Appendix
DrwGco Appendix
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Three months Three months ended ended March 31, March 31, 2014 2015 Net cash used in operating activities $ (511.0) $ (286.0) Less: Capital expenditures (101.2) (62.9) Free cash flow $ (612.2) $ (348.9) Note: Free cash flow is defined as net cash use
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Year ended Year ended December 31, December 31, 2014 2015 Net cash provided by operating activities $ 438.4 $ ~625.0 Less: Capital expenditures (301.5) ~ (325.0) Free cash flow $ 136.9 $ ~300.0 Note: Free cash flow is defined as net cash provided by
Slide 18: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Change due to currency Three Months Ended March 31, translation % change 2015 2014 from 2014 $ % North America $ 472.5 $ 647.5 (27.0)% $ (11.0) (1.7)% South America 249.0 353.6 (29.6)% (53.7) (15.2)% Europe/Africa/Middle East 908.1 1,235.9 (26.5)% (198.9)
Slide 19: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Three months ended March 31, 2015 2014 Income Income From Net Earnings Per From Net Earnings Per Operations Income (1) Share (1) Operations Income (1) Share (1) As adjusted $ 57.4 $ 38.0 $ 0.43 $ 155.7 $ 99.6 $ 1.03 Restructuring and other infrequent expenses 10.6 7.9
Slide 20: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Change Change due excluding March 31, March 31, Change to currency currency 2015 2014 from 2014 translation translation Inventories, net $ 1,840.7 $ 2,442.4 $ (601.7) $ (427.2) $ (174.5) 20
Slide 21: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation 2015 Earnings Per Share (1) As adjusted $3.00 Restructuring and other infrequent expenses 0.11 As targeted $2.89 (1)Earnings per share amount is after tax 21