Deere & Company · NYSE:DE
Deere & — Q3 2021 Earnings Presentation
25 slides from Deere &'s earnings presentation, Aug 20, 2021
Slide 1: 3Q 2021 Earnings Call
3Q 2021 Earnings Call 20 August 2021
Slide 2: Safe Harbor Statement & Disclosures
Safe Harbor Statement & Disclosures The earnings call and accompanying material include forward-looking comments and information concerning the company’s plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acce
Slide 3: 3Q 2021 Results
3Q 2021 Results ($ millions except where noted) Net Sales & Net Sales Net Income Diluted EPS (Equipment Operations) (attributable to ($ per share) Revenues Deere & Company) $11,527 $1,667 $5.32 $10,413 $8,925 $7,859 $811 $2.57 3Q 2020 3Q 2021 3Q 2020 3Q 2021 3Q 2020 3Q 2021 3Q 2020 3Q 2021 29% 32% 1
Slide 4: Production and Precision Ag
Production and Precision Ag 3Q 2021 Results $ in millions Net Sales 29% Operating Profit Comparison $85 ($31) ($248) $257 $4,250 ($44) $325 $0 ($43) $3,289 $906 $605 3Q 2020 3Q 2021 3Q 2020 Volume/ Price Currency Warranty Production SA&G/ Special Other 3Q 2021 Mix Costs R&D Items 4 John Deere | 3Q 2
Slide 5: Small Ag and Turf
Small Ag and Turf 3Q 2021 Results $ in millions Net Sales 32% Operating Profit Comparison $39 ($28) $77 ($119) $3,147 $298 $64 ($60) ($25) $583 $2,383 $337 3Q 2020 3Q 2021 3Q 2020 Volume/ Price Currency Warranty Production SA&G/ Special Other 3Q 2021 Mix Costs R&D Items 5 John Deere | 3Q 2021 Earnin
Slide 6: Ag & Turf Industry Outlook – FY 2021
Ag & Turf Industry Outlook – FY 2021 U.S. & CANADA U.S. & CANADA EUROPE AG LARGE AG SMALL AG & TURF ~25% ~10% 10-15% SOUTH AMERICA AG ASIA AG (tractors and combines) ~20% Significantly Source: Deere & Company forecast as of 20 August 2021 6 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 7: Production and Precision Ag Business Segment Outlook
Production and Precision Ag Business Segment Outlook Net Sales Operating Margin 25%-30% 20%-21% $12,962 15.2% FY 2020 FY 2021 Fcst FY 2020 FY 2021 Fcst Source: Deere & Company forecast as of 20 August 2021 7 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 8: Small Ag and Turf Business Segment Outlook
Small Ag and Turf Business Segment Outlook Net Sales Operating Margin 17%-18% ~25% $9,363 10.7% FY 2020 FY 2021 Fcst FY 2020 FY 2021 Fcst Source: Deere & Company forecast as of 20 August 2021 8 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 9: Deere Acquires Bear Flag Robotics
Deere Acquires Bear Flag Robotics Bear Flag Robotics is a leader in autonomous solutions for tractors Accelerates Deere’s autonomous technology into new use-cases and the installed base Complements Deere’s existing technology initiatives in autonomy Addresses skilled labor shortage to execute time s
Slide 10: Continued Investment in Deere Technology Stack
Continued Investment in Deere Technology Stack Autonomy Full set of solutions, Automation/Machine IQ connected together and to our machines helping Connectivity & Digital Solutions customers perform jobs better increasing their productivity, Guidance profitability and sustainability. Hardware & Soft
Slide 11: Construction and Forestry
Construction and Forestry 3Q 2021 Results $ in millions Net Sales 38% Operating Profit Comparison $123 ($11) ($2) ($51) ($32) $0 $19 $3,016 $212 $463 $2,187 $205 3Q 2020 Volume/ Price Currency Warranty Production SA&G/ Special Other 3Q 2021 3Q 2020 3Q 2021 Mix Costs R&D Items 11 John Deere | 3Q 2021
Slide 12: Construction and Forestry Industry Outlook – FY 2021
Construction and Forestry Industry Outlook – FY 2021 NORTH AMERICA NORTH AMERICA COMPACT GLOBAL FORESTRY CONSTRUCTION EQUIPMENT CONSTRUCTION EQUIPMENT 15-20% 20-25% ~15% Source: Deere & Company forecast as of 20 August 2021 12 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 13: Construction and Forestry Business Segment Outlook
Construction and Forestry Business Segment Outlook Net Sales Operating Margin 13%-14% ~30% $8,947 6.6% FY 2020 FY 2021 Fcst FY 2020 FY 2021 Fcst Source: Deere & Company forecast as of 20 August 2021 13 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 14: Construction and Forestry: shaping tomorrow's world
Construction and Forestry Answering the fundamental need for smarter, safer and more sustainable construction so our customers can shape tomorrow’s world. Margin Improvement Technology Differentiation Excavator Strategy 14 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 15: Transaction Overview
Transaction Overview − Deere to acquire Deere-Hitachi joint venture businesses • Deere will acquire three joint venture factories and workforce Transaction • Deere will acquire intellectual property license in perpetuity for continued manufacturing of current Deere-branded models Description − Deere
Slide 16: Strategic Rationale
Strategic Rationale Enables ownership of tech stack integration on critical earthmoving machine form Enhances strategic position and financial profile Allows for managed transition with minimal disruption to customers, channel, and operations 16 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 17: Financial Services Net Income - Results and Outlook
Financial Services Net Income - Results and Outlook Quarter Results Fiscal Year Forecast $227 $850 $183 $566 3Q 2020 3Q 2021 FY 2020 FY 2021 Fcst Source: Deere & Company forecast as of 20 August 2021 17 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 18: Deere & Company Outlook
Deere & Company Outlook FY 2021 FORECAST Net Income Effective Net Operating (attributable to Deere & Co.) Tax Rate* Cash Flow* $5.7-5.9B 22-24% $5.8-6.0B *Equipment Operations Source: Deere & Company forecast as of 20 August 2021 18 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 19: Appendix
Appendix 19 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 20: Other Financial Information
Other Financial Information Equipment Operations FY 2021 ($ millions) 3Q 2021 Forecast COS (percent of Net Sales)* 73% ~73% SA&G* 14% ~1% Research and Development* 6% ~4% Capital Expenditures ~ $900 Pension/OPEB Expense ~ $145 Pension/OPEB Contributions ~ $240 *As reported (including Employee Separa
Slide 21: July 2021 Retail Sales and Dealer Inventories
July 2021 Retail Sales (Rolling 3 Months) and Dealer Inventories Retail Sales U.S. and Canada Ag Industry* Deere** 2WD Tractors (< 40 PTO hp) 10% Less than the industry 2WD Tractors (40 < 100 PTO hp) 3% More than the industry 2WD Tractors (100+ PTO hp) 34% More than the industry 4WD Tractors 79% In
Slide 22: July 2021 Retail Sales (Rolling 3 Months)
July 2021 Retail Sales (Rolling 3 Months) Retail Sales Europe Ag Deere* Tractors High single digit Combines Low double digits Retail Sales U.S. and Canada Deere* Selected Turf & Utility Equipment Single digit Construction & Forestry First-in-the-Dirt Double digits Settlements Double digits * Based o
Slide 23: Deere Use-of-Cash Priorities
Deere Use-of-Cash Priorities CASH FROM OPERATIONS Manage the balance sheet, including liquidity, to support a rating that provides COMMITTED access to low-cost and readily available short- and long-term funding TO “A” RATING mechanisms (reflects the strategic nature of our financial services operati
Slide 24: Deere & Company's 4Q 2021 earnings call
Deere & Company’s 4Q 2021 earnings call is scheduled for 9:00 a.m. central time on Wednesday, 24 November 2021. 24 John Deere | 3Q 2021 Earnings Call | August 20, 2021
Slide 25: John Deere
@ JOHN DEERE