Slide 1: Third Quarter 2010 Financial and Operational Results
Third Quarter 2010 Financial and Operational Results October 26, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including the projections of earnings per share, sales, market demand, gross margins, market share improvements, investment in facilities and new products, productivity and purchasing initiatives, effective tax rates, inventory lev
Slide 3: Financial Summary
Financial Summary Q310 vs YTD YTD10 vs Q310 Q309 2010 YTD09 Net Sales ($Ms) 1,657.4 +19.3% 4,728.6 +0.8% Gross Profit ($Ms) 303.8 +25.0% 849.5 +5.4% Adj. Op. Inc.* ($Ms) 77.1 +110.1% 185.1 +6.0% Adj. Op. Margin* 4.7% +201 bps 3.9% +20 bps Adj. Diluted EPS* $0.66 +$0.53 $1.43 +$0.31 *Reflects adjuste
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units ● Production up 35% +28% +35% in Q310 vs Q309 -20% ● Large increases in Q3 in SA, EAME and NA ● Full year 2010 production projected to be up approx.7% to 9% vs 2009 Q1 Q2 Q3 Q4* 2009 Production 2010 Production * Amounts are estimated for Q4 2010 production
Slide 5: Industry Overview
Industry Overview September 2010 YTD Retail Units North America YTD10 vs YTD09 Tractors – Industry +2% – AGCO Combines – Industry +4% – AGCO Western Europe Tractors – Industry -15% – AGCO South America Tractors – Industry +46% – AGCO Combines – Industry +36% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2010 $4.7 billion North Q310 vs Q309 Net Sales Excl. Translation* America South 22% ROW +39% America 4% +19% +26% 28% +22% +12% EAME EAME South ROW North Consol. 46% America America YTD 2009 $4.7 billion YTD10 vs YTD09 Net Sales Excl. Translation* North +57% South Amer
Slide 7: Net Sales and Margins
Net Sales and Margins $M Adj. Op. Sales Margin* September YTD 8.0% $ 2,000.0 0.08 $185M Sales 0.07 6.0% $175M Adj. Op. Inc.* 0.06 $ 1,500.0 $ 100.0 0.05 3.9% 4.0% 3.7% 0.04 $ 1,000.0 Adj. Op. Margin* Adj. Op. Margin* 0.03 $ 50.0 0.02 2.0% $ 500.0 0.01 $ 0.0 0 YTD 2009 YTD 2010 $ 0.0 0.0% Q309 Q409 Q
Slide 8: Free Cash Flow
Free Cash Flow* YTD Free Cash Flow (9 Months Ended September 30 ) ● Fourth quarter YTD09 YTD10 seasonally stronger for free cash flow -$79M ● Targeting positive FCF for 2010 ● Expect small inventory build in advance of Tier 4 implementation -$302M Note: Free cash flow is defined as net cash used in
Slide 9: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2010 Capex Components $251M New Products $215M $175- Software/ $200M IT Capex $141M $129M Maintenance / Cost Reduction $78M $88M Dep. & Amort. Factory Productivity 2004 2005 2006 2007 2008 2009 2010E 9
Slide 10: 2010 Assumptions – Summary
2010 Assumptions – Summary ● Agricultural industry sales – NA Flat to up 5% vs. 2009 – SA up approx. 25-30% vs. 2009 – Western Europe down 10-15% vs. 2009 ● Approximately 1.5% to 2.0% pricing ● 15% increase in engineering expenses for new product development and Tier 4 emission requirements ● Gross
Slide 11: 2010 Targets
2010 Targets Total sales $6.7-$6.8B Diluted EPS $2.10-$2.20 Capital expenditures $175M-$200M Free cash flow* $100M-$125M * Free cash flow is defined as net cash provided by operating activities less capital expenditures. Please see reconciliations to GAAP metrics provided in the appendix to this pre
Slide 12: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Nine months Nine months ended ended September 30, September 30, 2010 2009 Net cash provided by (used in) operating activities $ 4.1 $ (158.6) Less: Capital expenditures (82.8) (142.9) Free cash flow $ (78.7) $ (301.5) Note: Free cash flow is defined
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended September 30, 2010 2009 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 77.1 $ 63.1 $ 0.66 $ 36.7 $ 12.0 $ 0.13 Restructuring and other in
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Nine months ended September 30, 2010 2009 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 185.1 $ 137.7 $ 1.43 $ 174.7 $ 105.3 $ 1.12 Restructuring and other
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation AGCO Regional Sales (in millions) % change from 2009 due to % change currency (1) Net sales from 2009 translation Three months ended September 30, 2010 North America $ 373.4 27.8% 1.4% South America 487.7 47.1% 8.0% Europe/Africa/Middle East 708.7 2.6% (9.5%) Rest of
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three months ended September 30, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 373.4 $ 369.5 1.4% South America 487.7 461.3 8.0% Europe/Africa/Middle East 708.7 774.2 (9.5)% Rest of Wo
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Nine months ended September 30, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 1,026.4 $ 1,002.5 2.1% South America 1,313.2 1,157.3 21.1% Europe/Africa/Middle East 2,178.9 2,266.2 (3.3)