ANALYST BRIEFING DECEMBER 19, 2017

Transcription

1 ANALYST BRIEFING DECEMBER 19, 2017

2 GREG PETERSON DIRECTOR INVESTOR RELATIONS 2

3 KEY MESSAGES THE FUNDAMENTALS Long-term fundamentals support optimism for industry / AGCO THE STRATEGY Executing successful strategy THE EXECUTION Aggressively managing for the long-term GOAL Delivering improved shareholder returns 3

4 AGENDA Strategic Update Martin Richenhagen, Chairman, President & CEO EME Region Discussion Rob Smith, Senior Vice President & General Manager EME Region BREAK 5 minutes Financial Update Andy Beck, Senior Vice President & CFO 4

5 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, acquisition, expansion and modernization plans and our expectations with respect to the costs and benefits of those plans and timing of those benefits, and our future revenue, earnings, expenses, cost savings, capital expenditures and other financial metrics, are subject to risks that could cause actual results to differ materially from those suggested by the statements. These risks include, but are not limited to, adverse developments in the agricultural industry, including those resulting from weather, commodity prices, and changes in product demand, the possible failure by us to develop new and improved products on time, within budget and with the expected performance and price benefits, introduction of new or improved products by our competitors and reductions in pricing by them, difficulties in integrating acquired businesses and in completing expansion and modernization plans on time and in a manner that produces the expected financial results, and adverse changes in the financial and foreign exchange markets. Further information concerning these and other risks is included in AGCO s filings with the SEC, including its Form 10-K for the year ended December 31, 2016 and subsequent Form 10-Qs. AGCO disclaims any obligation to update any forward-looking statements except as required by law. 5

6 EXTENSIVE TRACK RECORD Net Sales and Adj. EPS E Net Sales ~$8.2B Adj. EPS* $5.3B ~$3.00 $ E 6 * See reconciliation to GAAP metrics in appendix

7 POWERFUL TRENDS SUPPORT LONG TERM GROWTH Global Population to Increase to 8.5 billion by Middle Class Expected to Increase by 2x to Nearly 5 Billion by Source: 1. United Nations. 2. OECD & Rubico. 3. USDA historical data for Actual and trendline

8 MARTIN RICHENHAGEN CHAIRMAN, PRESIDENT & CEO 8

9 A COMPANY WITH A CLEAR VISION High-tech solutions for farmers feeding the world Profitable growth through superior customer service, innovation, quality and commitment 9

10 EXECUTING CONSISTENT STRATEGY Invest in production efficiency, technology and new products Grow the GSI platform Improve our core business Focus on margin improvement Improving ROIC 10

11 LONG TERM MARGIN TARGET 8.4% Prior Peak Significant industry decline ~5%* AGCO Initiatives: Material cost savings Productivity New products/platforms Volume/Mix ~10% E 11 * Reflects adjusted results, which exclude restructuring and other infrequent items.

12 NEW TECHNOLOGY, PRODUCTS INVESTING IN NEW PRODUCTS: SIGNIFICANT R&D SPEND R&D Spending ($ millions) ~$325 Maintaining important strategic investments. Continuing to invest in: ~4.0% New products ~3.9% Common component solutions IDEAL Combine $122 Ongoing Fuse Technology investment 2.2% % of sales E 18E 12

13 NEW TECHNOLOGY, PRODUCTS RECOGNIZED TECHNOLOGY LEADERSHIP February 2017 Sima France 2 Machine of the Year Awards 1 Gold Medal, 1 Innovation Award Valtra A104 HiTech Massey Ferguson MF 6718 S May 2017 Agrishow Brazil 3 Tractor of the Year Awards Valtra T-series CVT 250 Massey Ferguson 4275 MF 6713 tractors November 2017 Agritechnica Germany 5 Machine of the Year Awards, 1 Gold Medal, 7 Silver Medals 13

14 NEW TECHNOLOGY, PRODUCTS DELIVERING ON OUR GLOBAL PLATFORM STRATEGY Mass Market LHP Platform Premium HHP Platform Combine Harvesters Launched 2016 Launched 2016 Launched HP HP 14

15 NEW TECHNOLOGY, PRODUCTS LAUNCHED PREMIUM BRAND PLATFORM Fendt Vario 1000 Challenger % Fendt components Award winning, innovative, high-tech Machine of the Year award from Agrotechnica Shares technology with Fendt Selling above expectations 15

16 NEW TECHNOLOGY, PRODUCTS COMBINE PLATFORM STRATEGY OBJECTIVES Delivers exclusivity in the AGCO dealer network Removes seven current combine platforms into one global platform for our largest combines Provides innovative new customer features Grows global combine market share and margin Aligns manufacturing & quality process + volume leverage with global suppliers 16

17 NEW TECHNOLOGY, PRODUCTS AGRITECHNICA 2017 AWARDS 17

18 NEW TECHNOLOGY, PRODUCTS A RANGE OF MODELS AND VERSIONS Single Helix AGCOpower 9.8 L 451 HP Dual Helix MAN 12.4 L 538 HP ParaLevel Version 14% full combine leveling Dual Helix MAN 15.7 L 647 HP TrakRide Version mm Open Triangular Hydraulic Suspension for unrivalled comfort Maximum road speed of 40 Kph No greasing required Widest footprint to reduce soil compaction 18

19 NEW TECHNOLOGY, PRODUCTS UNIQUE IDEAL FEATURES AND ADVANTAGES IDEALharvest Streamer 210 Helix Rotors Narrow Body True Self-Adjusting 52 sensors Largest grain tank in the market and fastest unloading rate Longest rotor in the market (4.84m) AutoDock IDEAL Highlights Simple Design New Vision Cab The ultimate automation for changing the header Easy to maintain/extremely efficient Only 13 belts..less than half of the competition Panoramic visibility 19

20 PLACE HOLDER FOR IDEAL VIDEO 20

21 NEW TECHNOLOGY, PRODUCTS MULTIPLE NEW PRODUCT LAUNCHES AND UPGRADES: TRACTORS Tractor Development Schedule (Total New and Upgraded) Launches New MF1700 Compact N. America Valtra BH Brazil P/Shift Transmission Massey Ferguson 5700S series 21

22 NEW TECHNOLOGY, PRODUCTS MULTIPLE NEW PRODUCT LAUNCHES AND UPGRADES: HARVESTERS Harvesting Development Schedule (Total New and Upgraded) Launches IDEAL Combines Global Platform Ultra High Density Large Square Baler Round Baler Product Line Launch

23 NEW TECHNOLOGY, PRODUCTS FUSE: ADDRESSING FARM PRODUCTIVITY Customer Pain Points & Opportunities Key Farming Activities Adding value at each stage Key Focus Areas Drainage Planting Soil Management Guidance Variable Rate Fertilizing Uptime Pest Control Weed Control Optimization Logistics Drying Storage 20% improvement Planting Fertilization and Pest Control Compaction Management Predictive Maintenance Machine Optimization Our Services Reduce waste 23 Crop Cycle

24 NEW TECHNOLOGY, PRODUCTS FUSE: THE PATH TO SMART MACHINERY Connected Self- Adjusting Remote Smart 24

25 NEW TECHNOLOGY, PRODUCTS FUSE: OPEN ARCHITECTURE DKE Agrirouter acts as a data highway Common, open data hub Farmobile as true mixed fleet solution for data storage Option to sell data on the Data Store ADAPT: Agricultural Data Application Programming Toolkit Enables farmers to translate data from various hardware and software solutions 25

26 GROWING THE GSI PLATFORM BUSINESS AT A GLANCE 2017 Sales ~$1 Billion Leading global manufacturer of grain storage and seed processing equipment, commercial egg and animal protein production systems Purchased ,700 employees, >500 independent dealers Strong cash flow generation in U.S. Attractive margins Positive long-term macroeconomic trends $893M EME SA APA NA By Region $1B EME SA APA NA By Segment $1B Seed 12% Egg 11% Animal Protein 38% Grain 39% E 2017E 26

27 GROWING THE GSI PLATFORM GSI OFFERS A FULL LINE OF PRODUCTS IN OUR MARKETS. Product Portfolio Global Share Products GRAIN & SEED Grain Systems Seed Processing #1 #1 Storage Conditioning Handling Grading Sorting Conditioning Treating Swine Production #1 Feed Systems Climate Control Controls/Alarms Biosecurity ANIMAL PROTEIN Poultry Production #2 Feed Systems Climate Control Controls/Alarms Biosecurity Commercial Egg #2 Cage Free Systems Battery Cages Complete Solutions 27

28 GROWING THE GSI PLATFORM GSI INVESTING IN NEW PRODUCTS GSI s product roadmap showcases new-to-market, innovative solutions that bring industry-leading technology to our customers operations Grain Material Handling Protein Production Grain Management BinRite TM Grain ID sensor Flexwave silo unload system 3D Pig Scale Grain management system, with FUSE integration capability via the cloud 28

29 GROWING THE GSI PLATFORM INVESTING IN PRODUCTION CAPABILITIES Manufacturing JV In China with CP Foods Significantly expands GSI s protein production equipment capacity in China Expands locally produced product line Manufacturing JV will drive higher margins through in-house manufacturing and economies of scale Initial investment of ~$30M Production begins in early 2019 MONGOLIA C H I N A CiXi City TAIWAN 29

30 FOCUS ON MARGIN IMPROVEMENT SUCCESS INVESTING IN MANUFACTURING DRIVES MARGIN IMPROVEMENT Manufacturing Excellence 2017 ASSEMBLY Magazine Plant of the Year 2017 Manufacturing Excellence 2017 AGCO Smart Logistics Strategy & Alignment, Culture & Innovation, Lean Processes & Execution Jackson, Minnesota State-of-the-art facility; World-class processes Jackson, Minnesota Winner Category Customer Orientation, presented to AGCO Fendt GmbH Marktoberdorf, Germany 2016 BVL International Supply Chain Award Winner 2017 ELA Award, European Logistics Association Award Winner Recognized by Forbes & Supply Chain World 30

31 IMPROVING OUR CORE BUSINESS EXPANDING SMALL AG DEALER NETWORK AND INCREASING DEALER EFFECTIVENESS WITH NEW PRODUCTS IN LARGE AG $86 m $150 m Small Ag Retail & Parts Small Ag Dealers Will continue to grow dealer network Large Ag Dealers & Parts Only Dealers Dealer consolidation Dealer effectiveness (e.g., Building 1000 Series momentum) 31 12/ / / / / (Nov)

32 REGIONAL UPDATE GROWTH OPPORTUNITY BRAZIL Cerrado: Rapidly Growing AG Production Maranhão Tocantins Piauí Mato Grosso Mato Grosso do Sul Goiás Bahia /14 14/15 15/16 16/17 17/18 Production (in million ton) 22/23 23/24 Planted Area (in million hectare) Introduced Global Series (>100 HP) and HHP Tractors in 2017 Focus Areas: Additional HHP products localization Global Series (<100 HP) introduction in 2019 Professionalize dealer network Source: Conab *Projections: Carlos Cogo Consulting 32

33 REGIONAL UPDATE ASIA / PACIFIC / AFRICA: FOCUSED ON THREE IMPORTANT SUBMARKETS Australia / New Zealand / Far East China Africa Mature, developed market Large professional farms AGCO strategy focused on: dealer development growing the harvesting business Developing market Small, consolidating farms AGCO strategy focused on: grow the GSI business distribution improvement Developing market Small, consolidating farms AGCO strategy focused on: improving distribution utilizing future farm for training customer segmentation strategy 33