Slide 1: Second Quarter 2010 Financial and Operational Results
Second Quarter 2010 Financial and Operational Results July 27, 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 and conditions, margin and productivity improvements, cost reduction efforts, assembly capabilities, product line initiatives, working capital, free cash flow, e
Slide 3: Financial Summary
Financial Summary Q210 vs YTD YTD10 vs Q210 Q209 2010 YTD09 Net Sales ($Ms) 1,743.0 -1.4% 3,071.2 -6.9% Gross Profit ($Ms) 321.1 +10.0% 545.7 -3.0% Adj. Op. Inc.* ($Ms) 97.0 +19.9% 108.0 -21.7% Adj. Op. Margin* 5.6% +99 bps 3.5% -67 bps Adj. Diluted EPS* $0.66 +$0.02 $0.78 -$0.22 *Reflects adjusted
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units ● Production up 28% +28% in Q210 vs Q209 -20% ● Large increases in Q2 in SA – Decreases in NA and EAME ● Full year 2010 production projected to be +5% to 8% vs 2009 Q1 Q2 Q3* Q4* 2009 Production 2010 Production * Amounts are estimated for Q3-Q4 2010 produc
Slide 5: Industry Overview
Industry Overview June 2010 YTD Retail Units North America YTD10 vs YTD09 Tractors – Industry +2% – AGCO Combines – Industry +1% – AGCO Western Europe Tractors – Industry -19% – AGCO South America Tractors – Industry +57% – AGCO Combines – Industry +50% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2010 $3.1 billion North Q210 vs Q209 Net Sales Excl. Translation* South America +74% America 21% ROW 27% 4% North EAME ROW America Consol. EAME South -2% 48% -10% America -18% -19% YTD 2009 $3.3 billion YTD10 vs YTD09 Net Sales Excl. Translation* North +71% South Ameri
Slide 7: Net Sales and Margins
Net Sales and Margins $M Adj. Op. Sales Margin* June YTD 8.0% $ 2,000.0 $138.0M 0.08 Adj. Operating Income* 0.07 Sales 6.0% $108.0M 0.06 $ 1,500.0 $ 100.0 0.05 4.2% 4.0% 3.5% 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% Q209
Slide 8: Closely Managed Working Capital
Closely Managed Working Capital Working Capital* $918M ● Closely managed seasonal working capital build in 1H10 $709M ● A/P stabilized and up from Y/E 2009 levels ● Will continue working capital focus in 2010 Q408**2009 Q209 Q409**2010Q210 * Working Capital defined as A/R + Inv. – A/P – Accrued Exp
Slide 9: Free Cash Flow
Free Cash Flow* Q2 Free Cash Flow YTD Free Cash Flow (3 Months Ended June 30 ) (6 Months Ended June 30 ) ● Inventory management +$195M and improved YTD09 YTD10 profitability produced positive FCF in Q210 +$141M -$32M ● Second half of year seasonally stronger for free cash flow ● Targeting positive F
Slide 10: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2010 Capex Components $251M New Products $215M $185- Software/ $210M IT Capex $141M $129M Maintenance / Cost Reduction $78M $88M Dep. & Amort. Factory Productivity 2004 2005 2006 2007 2008 2009 2010E 10
Slide 11: 2010 Assumptions – Summary
2010 Assumptions – Summary ● Agricultural industry sales – NA Flat to up 5% vs. 2009 – SA up approximately 20-25% vs. 2009 – Western Europe down approximately 10-15% vs. 2009 ● Approximately 1.5% to 2.0% pricing ● 20% increase in engineering expenses for new product development and Tier 4 emission r
Slide 12: 2010 Targets
2010 Targets Total sales $6.7-$6.8B Diluted EPS $1.85-$2.00 Capital expenditures $185M-$210M Free cash flow* $75M-$100M * 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 pres
Slide 13: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Three months Three months ended ended June 30, June 30, 2010 2009 Net cash provided by operating activities $ 215.8 $ 192.3 Less: Capital expenditures (21.2) (50.9) Free cash flow $ 194.6 $ 141.4 Note: Free cash flow is defined as net cash provided b
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Six months Six months ended ended June 30, June 30, 2010 2009 Net cash provided by (used in) operating activities $ 13.5 $ (265.8) Less: Capital expenditures (45.3) (97.8) Free cash flow $ (31.8) $ (363.6) Note: Free cash flow is defined as net cash
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Three months ended June 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 $ 97.0 $ 63.3 $ 0.66 $ 80.9 $ 59.6 $ 0.64 Restructuring and other infrequ
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Six months ended June 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 $ 108.0 $ 74.6 $ 0.78 $ 138.0 $ 93.3 $ 1.00 Restructuring and other infrequ
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Regional Results AGCO Regional Sales (in millions) % change from % change 2009 due to Net sales from 2009 currency translation(1) Three months ended June 30, 2010 North America $ 370.1 -17.0% 2.3% South America 448.2 97.6% 23.4% Europe/Africa/Middle East 857.9 -15.5%
Slide 18: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three months ended June 30, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 370.1 $ 359.7 2.3% South America 448.2 395.0 23.4% Europe/Africa/Middle East 857.9 917.0 (5.8)% Rest of World
Slide 19: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Six months ended June 30, 2010 at 2010 at Actual Adjusted Change due to Exchange Exchange currency Rates Rates (1) translation North America $ 653.0 $ 633.0 2.4% South America 825.5 696.0 31.9% Europe/Africa/Middle East 1,470.2 1,492.0 (1.1)% Rest of Worl