AGCO Reports Fourth Quarter Results
AGCO, a global manufacturer of agricultural equipment, reported record fourth-quarter 2022 net sales of $3.9 billion, marking a 23.6% increase from the prior year. Earnings per share (EPS) reached $4.29 for the quarter, with adjusted EPS at $4.47. Full-year net sales totaled $12.7 billion, a 13.6% increase year-over-year, while EPS rose to $11.87. The company anticipates 2023 sales of approximately $14 billion and EPS of $13.50, driven by strong global demand and strategic focus on precision agriculture. However, supply chain challenges may persist throughout the year.
- 23.6% increase in Q4 net sales compared to Q4 2021.
- Full-year net sales reached $12.7 billion, up 13.6% from 2021.
- Projected 2023 net sales of approximately $14 billion and EPS of $13.50.
- Supply chain pressures expected to continue affecting operations in 2023.
- Record fourth quarter and full year net sales and earnings per share
-
Full year reported operating margin of
10% and adjusted operating margin of10.3% -
Full year South American operating margin of
17.6% -
Reiterates 2023 full year net sales of
~ and earnings per share of$14 billion ~ $13.50
“Our record results in 2022, underscored by net sales of approximately
Fourth Quarter Highlights
-
Reported fourth quarter regional sales results(1):
Europe /Middle East (“EME”) +21.7% ,North America +22.1% ,South America +66.4% ,Asia/Pacific /Africa (“APA”) (23.1)% -
Constant currency fourth quarter regional sales results(1)(2)(3): EME +
37.9% ,North America +23.2% ,South America +57.9% , APA (14.5)% -
Fourth quarter regional operating margin performance: EME
14.6% ,North America 7.4% ,South America 20.0% , APA9.0% -
Full-year reported operating margins and adjusted operating margins(3) improved to
10.0% and10.3% respectively, in 2022 compared to9.0% and9.1% in 2021 -
Generated
in cash flow from operations and$838.2 million in free cash flow(3) for the full-year 2022$449.9 million
(1) |
As compared to fourth quarter 2021. |
(2) |
Excludes currency translation impact. |
(3) |
See reconciliation of Non-GAAP measures in appendix. |
Net sales for the full year of 2022 were approximately
Market Update
|
|
Industry Unit Retail Sales |
||
|
|
Tractors |
|
Combines |
Year ended |
|
Change from
|
|
Change from
|
|
|
(5.0)% |
|
|
|
|
|
|
(1.6)% |
|
|
(8.5)% |
|
|
(1) |
Excludes compact tractors. |
(2) |
Based on Company estimates. |
“Supportive farm economics are resulting in robust demand for larger agricultural equipment as farmers continue to replace aging machines,” stated
North American full-year industry retail tractor sales declined compared to the previous year. Lower sales of smaller equipment, more closely tied to the general economy, were partially offset by strong growth of high horsepower tractors and combines. Favorable commodity prices, extended fleet age and precision ag technology are continuing to stimulate demand for row crop farmers. These conditions are expected to continue in 2023, resulting in flat North American industry sales compared to 2022.
Industry retail tractor sales in
In
Regional Results
AGCO Regional
Three Months Ended |
|
|
2022 |
|
|
2021 |
|
% change
|
|
% change from
|
|
% change
|
|||
|
|
$ |
823.7 |
|
$ |
674.7 |
|
22.1 |
% |
|
(1.2 |
)% |
|
23.2 |
% |
|
|
|
674.8 |
|
|
405.6 |
|
66.4 |
% |
|
8.5 |
% |
|
57.9 |
% |
EME |
|
|
2,186.5 |
|
|
1,796.9 |
|
21.7 |
% |
|
(16.2 |
)% |
|
37.9 |
% |
APA |
|
|
213.9 |
|
|
278.0 |
|
(23.1 |
)% |
|
(8.6 |
)% |
|
(14.5 |
)% |
Total |
|
$ |
3,898.9 |
|
$ |
3,155.2 |
|
23.6 |
% |
|
(9.2 |
)% |
|
32.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Year Ended |
|
|
2022 |
|
|
2021 |
|
% change
|
|
% change from
|
|
% change
|
|||
|
|
$ |
3,175.1 |
|
$ |
2,659.2 |
|
19.4 |
% |
|
(0.8 |
)% |
|
20.2 |
% |
|
|
|
2,121.6 |
|
|
1,307.7 |
|
62.2 |
% |
|
5.6 |
% |
|
56.6 |
% |
EME |
|
|
6,447.3 |
|
|
6,221.7 |
|
3.6 |
% |
|
(14.8 |
)% |
|
18.5 |
% |
APA |
|
|
907.4 |
|
|
949.7 |
|
(4.5 |
)% |
|
(8.0 |
)% |
|
3.6 |
% |
Total |
|
$ |
12,651.4 |
|
$ |
11,138.3 |
|
13.6 |
% |
|
(8.5 |
)% |
|
22.1 |
% |
(1) See Footnotes for additional disclosures. |
|
|
|
|
|
|
|
|
|
|
AGCO’s North American net sales increased
Net sales in the South American region increased
Net sales in the
Outlook
AGCO’s net sales for 2023 are expected to be approximately
* * * * *
AGCO will host a conference call with respect to this earnings announcement at
* * * * *
Safe Harbor Statement
Statements that are not historical facts, including the projections of earnings per share, production levels, sales, industry demand, market conditions, commodity prices, currency translation, farm income levels, margin levels, strategy, investments in product and technology development, new product introductions, restructuring and other cost reduction initiatives, production volumes, tax rates and general economic conditions, are forward-looking and subject to risks that could cause actual results to differ materially from those suggested by the statements. The following are among the factors that could cause actual results to differ materially from the results discussed in or implied by the forward-looking statements.
- COVID-19 has negatively impacted our business, initially through closures, higher absentee rates, and reduced production at both our plants and the plants that supply us with parts and components, and more recently through supply chain disruptions, including the inability of some of our suppliers to meet demand and logistics and transportation-related companies to deliver products in a timely manner. In addition, we have had to incur various costs related to preventing the spread of COVID-19, including changes to our factories and other facilities and those related to enabling remote work. We expect COVID-19 to continue to impact our business, although the manner and extent to which it impacts us will depend on future developments, including the duration of the pandemic, the timing, distribution and impact of vaccinations, and possible mutations of the virus that are more contagious or resistant to current vaccines. Measures taken by governments around the world, as well as businesses, including us, and the general public in order to limit the spread of COVID-19 will impact our business as well. These measures have included travel bans and restrictions, quarantines, shelter in place orders, curfews, business and government office closures, increased border controls or closures, port closures and transportation restrictions. The impacts of COVID-19 and such measures could include decreases in demand for our products, factory closures, increased absentee rates, reduced production, incurrence of additional costs due to the adherence to cleaning requirements and social distancing guidelines and increased costs of labor, parts and components and shipping, incurrence of impairment charges, slower collections and larger write-offs of accounts receivable, among other changes.
-
We cannot predict or control the impact of the conflict in
Ukraine on our business. Already it has resulted in reduced sales inUkraine as farmers have experienced economic distress, difficulties in harvesting and delivering their products, as well as general uncertainty. There is a potential for natural gas shortages, as well as shortages in other energy sources, throughoutEurope , which could negatively impact our production inEurope both directly and through interrupting the supply of parts and components that we use. It is unclear how long these conditions will continue, or whether they will worsen, and what the ultimate impact on our performance will be. In addition, AGCO sells products in, and purchases parts and components from, other regions where there could be hostilities. Any hostilities likely would adversely impact our performance. - Our financial results depend entirely upon the agricultural industry, and factors that adversely affect the agricultural industry generally, including declines in the general economy, adverse weather, tariffs, increases in farm input costs, lower commodity prices, lower farm income and changes in the availability of credit for our retail customers, will adversely affect us.
-
A majority of our sales and manufacturing takes place outside
the United States , and many of our sales involve products that are manufactured in one country and sold in a different country. As a result, we are exposed to risks related to foreign laws, taxes and tariffs, trade restrictions, economic conditions, labor supply and relations, political conditions and governmental policies. These risks may delay or reduce our realization of value from our international operations. Among these risks are the uncertain consequences of Brexit, the conflict inUkraine , Russian sanctions and tariffs imposed on exports to and imports fromChina . -
Most retail sales of the products that we manufacture are financed, either by our joint ventures with
Rabobank or by a bank or other private lender. Our joint ventures withRabobank , which are controlled byRabobank and are dependent uponRabobank for financing as well, finance approximately50% of the retail sales of our tractors and combines in the markets where the joint ventures operate. Any difficulty byRabobank to continue to provide that financing, or any business decision byRabobank as the controlling member not to fund the business or particular aspects of it (for example, a particular country or region), would require the joint ventures to find other sources of financing (which may be difficult to obtain), or us to find another source of retail financing for our customers, or our customers would be required to utilize other retail financing providers. As a result of the recent economic downturn, financing for capital equipment purchases generally has become more difficult in certain regions and in some cases, can be expensive to obtain. To the extent that financing is not available or available only at unattractive prices, our sales would be negatively impacted. - Both AGCO and our finance joint ventures have substantial accounts receivable from dealers and end customers, and we would be adversely impacted if the collectability of these receivables was less than optimal; this collectability is dependent upon the financial strength of the farm industry, which in turn is dependent upon the general economy and commodity prices, as well as several of the other factors listed in this section.
- We have experienced substantial and sustained volatility with respect to currency exchange rate and interest rate changes, which can adversely affect our reported results of operations and the competitiveness of our products.
- Our success depends on the introduction of new products, particularly engines that comply with emission requirements and sustainable smart farming technology, which require substantial expenditures; there is no certainty that we can develop the necessary technology or that the technology that we develop will be attractive to farmers or available at competitive prices.
- Our expansion plans in emerging markets, including establishing a greater manufacturing and marketing presence and growing our use of component suppliers, could entail significant risks.
- Our business increasingly is subject to regulations relating to privacy and data protection, and if we violate any of those regulations, or otherwise are the victim of a cyberattack, we could be subject to significant claims, penalties and damages.
-
Attacks through ransomware and other means are rapidly increasing, and in
May 2022 we learned that we had been subject to a cyberattack. We continue to review and improve our safeguards to minimize our exposure to future attacks. However, there always will be the potential of the risk that a cyberattack will be successful and will disrupt our business, either through shutting down our operations, destroying data, exfiltrating data or otherwise. -
We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products. Recently suppliers of several key parts and components have not been able to meet our demand and we have had to decrease our production levels. In addition, the potential of natural gas shortages in
Europe , as well as predicted overall shortages in other energy sources, could also negatively impact our production and that of our supply chain in the future. It is unclear when these supply chain disruptions will be restored or what the ultimate impact on production, and consequently sales, will be. - During 2022 we experienced significant inflation in a range of costs, including for parts and components, shipping, and energy. While we have been able to pass along most of those costs through increased prices, there can be no assurance that we will be able to continue to do so. If we are not, it will adversely impact our performance.
- We face significant competition, and if we are unable to compete successfully against other agricultural equipment manufacturers, we would lose customers and our net sales and performance would decline.
- We have a substantial amount of indebtedness, and, as a result, we are subject to certain restrictive covenants and payment obligations that may adversely affect our ability to operate and expand our business.
Further information concerning these and other factors is included in AGCO’s filings with the
* * * * *
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture and distribution of agricultural solutions and delivers high-tech solutions for farmers feeding the world through its full line of equipment and related services. AGCO products are sold through six core brands, Challenger®, Fendt®, GSI®,
# # # # #
Please visit our website at www.agcocorp.com
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions)
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
789.5 |
|
|
$ |
889.1 |
|
Accounts and notes receivable, net |
|
1,221.3 |
|
|
|
991.5 |
|
Inventories, net |
|
3,189.7 |
|
|
|
2,593.7 |
|
Other current assets |
|
538.8 |
|
|
|
539.8 |
|
Total current assets |
|
5,739.3 |
|
|
|
5,014.1 |
|
Property, plant and equipment, net |
|
1,591.2 |
|
|
|
1,464.8 |
|
Right-of-use lease assets |
|
163.9 |
|
|
|
154.1 |
|
Investments in affiliates |
|
436.9 |
|
|
|
413.5 |
|
Deferred tax assets |
|
228.5 |
|
|
|
169.3 |
|
Other assets |
|
268.7 |
|
|
|
293.3 |
|
Intangible assets, net |
|
364.4 |
|
|
|
392.2 |
|
|
|
1,310.8 |
|
|
|
1,280.8 |
|
Total assets |
$ |
10,103.7 |
|
|
$ |
9,182.1 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Current portion of long-term debt |
$ |
187.1 |
|
|
$ |
2.1 |
|
Short term borrowings |
|
8.9 |
|
|
|
90.8 |
|
Accounts payable |
|
1,385.3 |
|
|
|
1,078.3 |
|
Accrued expenses |
|
2,271.3 |
|
|
|
2,062.2 |
|
Other current liabilities |
|
235.4 |
|
|
|
221.2 |
|
Total current liabilities |
|
4,088.0 |
|
|
|
3,454.6 |
|
Long-term debt, less current portion and debt issuance costs |
|
1,264.8 |
|
|
|
1,411.2 |
|
Operating lease liabilities |
|
125.4 |
|
|
|
115.5 |
|
Pensions and postretirement health care benefits |
|
158.0 |
|
|
|
209.0 |
|
Deferred tax liabilities |
|
112.0 |
|
|
|
116.9 |
|
Other noncurrent liabilities |
|
472.9 |
|
|
|
431.1 |
|
Total liabilities |
|
6,221.1 |
|
|
|
5,738.3 |
|
|
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
|
|
|
|
||||
Common stock |
|
0.7 |
|
|
|
0.7 |
|
Additional paid-in capital |
|
30.2 |
|
|
|
3.9 |
|
Retained earnings |
|
5,654.6 |
|
|
|
5,182.2 |
|
Accumulated other comprehensive loss |
|
(1,803.1 |
) |
|
|
(1,770.9 |
) |
|
|
3,882.4 |
|
|
|
3,415.9 |
|
Noncontrolling interests |
|
0.2 |
|
|
|
27.9 |
|
Total stockholders’ equity |
|
3,882.6 |
|
|
|
3,443.8 |
|
Total liabilities and stockholders’ equity |
$ |
10,103.7 |
|
|
$ |
9,182.1 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
|
Three Months Ended |
|||||
|
2022 |
|
2021 |
|||
Net sales |
$ |
3,898.9 |
|
$ |
3,155.2 |
|
Cost of goods sold |
|
2,958.3 |
|
|
2,472.5 |
|
Gross profit |
|
940.6 |
|
|
682.7 |
|
Selling, general and administrative expenses |
|
325.1 |
|
|
285.2 |
|
Engineering expenses |
|
132.1 |
|
|
109.5 |
|
Amortization of intangibles |
|
14.7 |
|
|
15.3 |
|
Restructuring expenses |
|
1.7 |
|
|
7.9 |
|
Bad debt expense |
|
1.2 |
|
|
0.8 |
|
Income from operations |
|
465.8 |
|
|
264.0 |
|
Interest expense (income), net |
|
4.4 |
|
|
(0.1 |
) |
Other expense, net |
|
72.9 |
|
|
10.2 |
|
Income before income taxes and equity in net earnings of affiliates |
|
388.5 |
|
|
253.9 |
|
Income tax provision (benefit) |
|
90.7 |
|
|
(13.0 |
) |
Income before equity in net earnings of affiliates |
|
297.8 |
|
|
266.9 |
|
Equity in net earnings of affiliates |
|
24.4 |
|
|
16.4 |
|
Net income |
|
322.2 |
|
|
283.3 |
|
Net income attributable to noncontrolling interests |
|
— |
|
|
(1.2 |
) |
Net income attributable to |
$ |
322.2 |
|
$ |
282.1 |
|
Net income per common share attributable to |
|
|
||||
Basic |
$ |
4.32 |
|
$ |
3.77 |
|
Diluted |
$ |
4.29 |
|
$ |
3.75 |
|
Cash dividends declared and paid per common share |
$ |
0.24 |
|
$ |
0.20 |
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
||||
Basic |
|
74.6 |
|
|
74.7 |
|
Diluted |
|
75.0 |
|
|
75.3 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
|
Years Ended |
|||||
|
2022 |
|
2021 |
|||
Net sales |
$ |
12,651.4 |
|
$ |
11,138.3 |
|
Cost of goods sold |
|
9,650.1 |
|
|
8,566.0 |
|
Gross profit |
|
3,001.3 |
|
|
2,572.3 |
|
Selling, general and administrative expenses |
|
1,186.2 |
|
|
1,088.2 |
|
Engineering expenses |
|
444.2 |
|
|
405.8 |
|
Amortization of intangibles |
|
60.1 |
|
|
61.1 |
|
Impairment charge |
|
36.0 |
|
|
— |
|
Restructuring expenses |
|
6.1 |
|
|
15.3 |
|
Bad debt expense |
|
3.3 |
|
|
0.5 |
|
Income from operations |
|
1,265.4 |
|
|
1,001.4 |
|
Interest expense, net |
|
13.0 |
|
|
6.7 |
|
Other expense, net |
|
145.2 |
|
|
50.4 |
|
Income before income taxes and equity in net earnings of affiliates |
|
1,107.2 |
|
|
944.3 |
|
Income tax provision |
|
296.6 |
|
|
108.4 |
|
Income before equity in net earnings of affiliates |
|
810.6 |
|
|
835.9 |
|
Equity in net earnings of affiliates |
|
64.1 |
|
|
65.6 |
|
Net income |
|
874.7 |
|
|
901.5 |
|
Net loss (income) attributable to noncontrolling interests |
|
14.9 |
|
|
(4.5 |
) |
Net income attributable to |
$ |
889.6 |
|
$ |
897.0 |
|
Net income per common share attributable to |
|
|
|
|||
Basic |
$ |
11.92 |
|
$ |
11.93 |
|
Diluted |
$ |
11.87 |
|
$ |
11.85 |
|
Cash dividends declared and paid per common share |
$ |
5.40 |
|
$ |
4.74 |
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|||
Basic |
|
74.6 |
|
|
75.2 |
|
Diluted |
|
74.9 |
|
|
75.7 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
|
Years Ended |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
874.7 |
|
|
$ |
901.5 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
209.5 |
|
|
|
220.7 |
|
Impairment charge |
|
36.0 |
|
|
|
— |
|
Amortization of intangibles |
|
60.1 |
|
|
|
61.1 |
|
Stock compensation expense |
|
34.0 |
|
|
|
27.4 |
|
Equity in net earnings of affiliates, net of cash received |
|
(40.8 |
) |
|
|
(1.9 |
) |
Deferred income tax benefit |
|
(58.0 |
) |
|
|
(117.9 |
) |
Other |
|
16.2 |
|
|
|
20.5 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts and notes receivable, net |
|
(306.1 |
) |
|
|
(207.7 |
) |
Inventories, net |
|
(668.3 |
) |
|
|
(762.6 |
) |
Other current and noncurrent assets |
|
20.1 |
|
|
|
(268.0 |
) |
Accounts payable |
|
322.1 |
|
|
|
292.2 |
|
Accrued expenses |
|
282.7 |
|
|
|
241.2 |
|
Other current and noncurrent liabilities |
|
56.0 |
|
|
|
253.7 |
|
Total adjustments |
|
(36.5 |
) |
|
|
(241.3 |
) |
Net cash provided by operating activities |
|
838.2 |
|
|
|
660.2 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(388.3 |
) |
|
|
(269.8 |
) |
Proceeds from sale of property, plant and equipment |
|
2.6 |
|
|
|
6.3 |
|
Purchase of businesses, net of cash acquired |
|
(111.3 |
) |
|
|
(22.6 |
) |
Sale of, distributions from (investments in) unconsolidated affiliates, net |
|
4.0 |
|
|
|
13.1 |
|
Other |
|
(3.8 |
) |
|
|
(15.4 |
) |
Net cash used in investing activities |
|
(496.8 |
) |
|
|
(288.4 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from (repayments of) indebtedness, net |
|
33.0 |
|
|
|
(3.8 |
) |
Purchases and retirement of common stock |
|
— |
|
|
|
(135.0 |
) |
Payment of dividends to stockholders |
|
(404.3 |
) |
|
|
(358.5 |
) |
Payment of minimum tax withholdings on stock compensation |
|
(20.6 |
) |
|
|
(34.9 |
) |
Payment of debt issuance costs |
|
(3.6 |
) |
|
|
(3.8 |
) |
Distributions to noncontrolling interests, net |
|
(11.5 |
) |
|
|
(3.5 |
) |
Net cash used in financing activities |
|
(407.0 |
) |
|
|
(539.5 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(34.0 |
) |
|
|
(62.3 |
) |
Decrease in cash, cash equivalents and restricted cash |
|
(99.6 |
) |
|
|
(230.0 |
) |
Cash, cash equivalents and restricted cash, beginning of year |
|
889.1 |
|
|
|
1,119.1 |
|
Cash, cash equivalents and restricted cash, end of year |
$ |
789.5 |
|
|
$ |
889.1 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except share amounts, per share data and employees)
1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows (in millions):
|
Three Months Ended |
|
Years Ended |
||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
Cost of goods sold |
$ |
0.3 |
|
$ |
0.2 |
|
$ |
1.3 |
|
$ |
1.0 |
Selling, general and administrative expenses |
|
8.3 |
|
|
6.1 |
|
|
32.7 |
|
|
26.6 |
Total stock compensation expense |
$ |
8.6 |
|
$ |
6.3 |
|
$ |
34.0 |
|
$ |
27.6 |
2. IMPAIRMENT CHARGES
As a consequence of the conflict between
3. RESTRUCTURING EXPENSES
In recent years, the Company announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the
4. INDEBTEDNESS
Long-term debt at
|
|
|
|
||||
Credit facility, expires 2027 |
|
200.0 |
|
|
|
— |
|
|
|
267.3 |
|
|
|
283.7 |
|
Senior term loans due between 2023 and 2028 |
|
341.6 |
|
|
|
445.9 |
|
|
|
641.5 |
|
|
|
680.8 |
|
Other long-term debt |
|
5.1 |
|
|
|
7.7 |
|
Debt issuance costs |
|
(3.6 |
) |
|
|
(4.8 |
) |
|
|
1,451.9 |
|
|
|
1,413.3 |
|
Less: |
|
|
|
||||
Senior term loans due 2023, net of debt issuance costs |
|
(184.9 |
) |
|
|
— |
|
Current portion of other long-term debt |
|
(2.2 |
) |
|
|
(2.1 |
) |
Total long-term indebtedness, less current portion |
$ |
1,264.8 |
|
|
$ |
1,411.2 |
|
As of
In December, 2022, the Company, certain of its subsidiaries and Coöperatieve Rabobank U.A.,
In
In
5. INVENTORIES
Inventories at
|
|
|
|
||
Finished goods |
$ |
994.9 |
|
$ |
718.2 |
Repair and replacement parts |
|
750.1 |
|
|
697.8 |
Work in process |
|
369.8 |
|
|
282.8 |
Raw materials |
|
1,074.9 |
|
|
894.9 |
Inventories, net |
$ |
3,189.7 |
|
$ |
2,593.7 |
6. ACCOUNTS RECEIVABLE SALES AGREEMENTS
The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in
In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world. As of
Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately
The Company’s finance joint ventures in
7. NET INCOME PER SHARE
A reconciliation of net income attributable to
|
Three Months Ended
|
|
Years Ended
|
||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
Basic net income per share: |
|
|
|
|
|
|
|
||||
Net income attributable to |
$ |
322.2 |
|
$ |
282.1 |
|
$ |
889.6 |
|
$ |
897.0 |
Weighted average number of common shares outstanding |
|
74.6 |
|
|
74.7 |
|
|
74.6 |
|
|
75.2 |
Basic net income per share attributable to |
$ |
4.32 |
|
$ |
3.77 |
|
$ |
11.92 |
|
$ |
11.93 |
Diluted net income per share: |
|
|
|
|
|
|
|
||||
Net income attributable to |
$ |
322.2 |
|
$ |
282.1 |
|
$ |
889.6 |
|
$ |
897.0 |
Weighted average number of common shares outstanding |
|
74.6 |
|
|
74.7 |
|
|
74.6 |
|
|
75.2 |
Dilutive stock-settled appreciation rights, performance share awards and restricted stock units |
|
0.4 |
|
|
0.6 |
|
|
0.3 |
|
|
0.5 |
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share |
|
75.0 |
|
|
75.3 |
|
|
74.9 |
|
|
75.7 |
Diluted net income per share attributable to |
$ |
4.29 |
|
$ |
3.75 |
|
$ |
11.87 |
|
$ |
11.85 |
8. SEGMENT REPORTING
The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement parts. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations for one segment may not be comparable to another segment. Segment results for the three months and years ended
Three Months Ended |
|
North
|
|
South
|
|
|
|
|
|
Consolidated |
|||||
2022 |
|
|
|
|
|
|
|
|
|
|
|||||
Net sales |
|
$ |
823.7 |
|
$ |
674.8 |
|
$ |
2,186.5 |
|
$ |
213.9 |
|
$ |
3,898.9 |
Income from operations |
|
|
60.6 |
|
|
134.8 |
|
|
318.5 |
|
|
19.2 |
|
|
533.1 |
2021 |
|
|
|
|
|
|
|
|
|
|
|||||
Net sales |
|
$ |
674.7 |
|
$ |
405.6 |
|
$ |
1,796.9 |
|
$ |
278.0 |
|
$ |
3,155.2 |
Income from operations |
|
|
23.7 |
|
|
48.5 |
|
|
217.3 |
|
|
37.7 |
|
|
327.2 |
Years Ended |
|
North
|
|
South
|
|
|
|
|
|
Consolidated |
|||||
2022 |
|
|
|
|
|
|
|
|
|
|
|||||
Net sales |
|
$ |
3,175.1 |
|
$ |
2,121.6 |
|
$ |
6,447.3 |
|
$ |
907.4 |
|
$ |
12,651.4 |
Income from operations |
|
|
278.8 |
|
|
373.9 |
|
|
784.1 |
|
|
116.9 |
|
|
1,553.7 |
2021 |
|
|
|
|
|
|
|
|
|
|
|||||
Net sales |
|
$ |
2,659.2 |
|
$ |
1,307.7 |
|
$ |
6,221.7 |
|
$ |
949.7 |
|
$ |
11,138.3 |
Income from operations |
|
|
238.1 |
|
|
132.2 |
|
|
755.4 |
|
|
113.9 |
|
|
1,239.6 |
A reconciliation from the segment information to the consolidated balances for income from operations is set forth below (in millions):
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Segment income from operations |
$ |
533.1 |
|
|
$ |
327.2 |
|
|
$ |
1,553.7 |
|
|
$ |
1,239.6 |
|
Corporate expenses |
|
(42.6 |
) |
|
|
(33.9 |
) |
|
|
(153.4 |
) |
|
|
(135.2 |
) |
Amortization of intangibles |
|
(14.7 |
) |
|
|
(15.3 |
) |
|
|
(60.1 |
) |
|
|
(61.1 |
) |
Stock compensation expense |
|
(8.3 |
) |
|
|
(6.1 |
) |
|
|
(32.7 |
) |
|
|
(26.6 |
) |
Restructuring expenses |
|
(1.7 |
) |
|
|
(7.9 |
) |
|
|
(6.1 |
) |
|
|
(15.3 |
) |
Impairment charges |
|
— |
|
|
|
— |
|
|
|
(36.0 |
) |
|
|
— |
|
Consolidated income from operations |
$ |
465.8 |
|
|
$ |
264.0 |
|
|
$ |
1,265.4 |
|
|
$ |
1,001.4 |
|
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations, adjusted net income, adjusted net income per share, free cash flow and net sales on a constant currency basis, each of which exclude amounts that are typically included in the most directly comparable measure calculated in accordance with
The following is a reconciliation of reported income from operations, net income and net income per share to adjusted income from operations, net income and net income per share for the three months and years ended
|
Three Months Ended |
||||||||||||||||||
|
2022 |
|
2021 |
||||||||||||||||
|
Income From
|
|
Net
|
|
Net Income
|
|
Income From
|
|
Net
|
|
Net Income
|
||||||||
As reported |
$ |
465.8 |
|
$ |
322.2 |
|
$ |
4.29 |
|
$ |
264.0 |
|
$ |
282.1 |
|
|
$ |
3.75 |
|
Restructuring expenses(3) |
|
1.7 |
|
|
1.6 |
|
|
0.02 |
|
|
7.9 |
|
|
5.5 |
|
|
|
0.07 |
|
Divestiture-related foreign currency translation release(4) |
|
— |
|
|
11.4 |
|
|
0.15 |
|
|
— |
|
|
— |
|
|
|
— |
|
Deferred income tax adjustment(5) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(55.6 |
) |
|
|
(0.74 |
) |
As adjusted |
$ |
467.5 |
|
$ |
335.3 |
|
$ |
4.47 |
|
$ |
272.0 |
|
$ |
232.0 |
|
|
$ |
3.08 |
|
(1) |
Net income and net income per share amounts are after tax. |
(2) |
Rounding may impact summation of amounts. |
(3) |
The restructuring expenses recorded during the three months ended |
(4) |
During the three months ended |
(5) |
During the three months ended |
|
Years Ended |
||||||||||||||||||||
|
2022 |
|
2021 |
||||||||||||||||||
|
Income From
|
|
Net
|
|
Net Income
|
|
Income From
|
|
Net
|
|
Net Income
|
||||||||||
As reported |
$ |
1,265.4 |
|
$ |
889.6 |
|
|
$ |
11.87 |
|
|
$ |
1,001.4 |
|
$ |
897.0 |
|
|
$ |
11.85 |
|
Impairment of Russian joint ventures(3) |
|
36.0 |
|
|
23.8 |
|
|
|
0.32 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Restructuring expenses(4) |
|
6.1 |
|
|
4.8 |
|
|
|
0.06 |
|
|
|
15.3 |
|
|
11.8 |
|
|
|
0.16 |
|
Gain on full acquisition of IAS joint venture(5) |
|
— |
|
|
(3.4 |
) |
|
|
(0.05 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
Write-down of investment in Russian finance joint venture(6) |
|
— |
|
|
4.8 |
|
|
|
0.06 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Divestiture-related foreign currency translation release(7) |
|
— |
|
|
11.4 |
|
|
|
0.15 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Deferred income tax adjustment(8) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(123.4 |
) |
|
|
(1.63 |
) |
As adjusted |
$ |
1,307.5 |
|
$ |
930.9 |
|
|
$ |
12.42 |
|
|
$ |
1,016.7 |
|
$ |
785.4 |
|
|
$ |
10.38 |
|
(1) |
Net income and net income per share amounts are after tax. |
(2) |
Rounding may impact summation of amounts. |
(3) |
During 2022, the Company recorded certain asset impairment charges related to its Russian joint ventures of approximately |
(4) |
The restructuring expenses recorded during the year ended |
(5) |
During 2022, the Company acquired |
(6) |
During 2022, the Company recorded a write-down of its investment in its Russian finance joint venture of approximately |
(7) |
During the year ended |
(8) |
During the year ended |
The following is a reconciliation of net cash provided by operating activities to free cash flow for the three months and years ended
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net cash provided by operating activities |
$ |
1,133.3 |
|
|
$ |
618.7 |
|
|
$ |
838.2 |
|
|
$ |
660.2 |
|
Less: capital expenditures |
|
(117.8 |
) |
|
|
(71.1 |
) |
|
|
(388.3 |
) |
|
|
(269.8 |
) |
Free cash flow |
$ |
1,015.5 |
|
|
$ |
547.6 |
|
|
$ |
449.9 |
|
|
$ |
390.4 |
|
The following tables set forth, for the three months and year ended
|
Three Months Ended |
|
Change due to currency translation |
||||||||||||
|
2022 |
|
2021 |
|
% change
|
|
$ |
|
% |
||||||
|
$ |
823.7 |
|
$ |
674.7 |
|
22.1 |
% |
|
$ |
(7.8 |
) |
|
(1.2 |
) % |
|
|
674.8 |
|
|
405.6 |
|
66.4 |
% |
|
|
34.5 |
|
|
8.5 |
% |
|
|
2,186.5 |
|
|
1,796.9 |
|
21.7 |
% |
|
|
(291.9 |
) |
|
(16.2 |
) % |
|
|
213.9 |
|
|
278.0 |
|
(23.1 |
) % |
|
|
(23.9 |
) |
|
(8.6 |
) % |
|
$ |
3,898.9 |
|
$ |
3,155.2 |
|
23.6 |
% |
|
$ |
(289.1 |
) |
|
(9.2 |
) % |
|
Years Ended |
|
Change due to currency translation |
||||||||||||
|
2022 |
|
2021 |
|
% change
|
|
$ |
|
% |
||||||
|
$ |
3,175.1 |
|
$ |
2,659.2 |
|
19.4 |
% |
|
$ |
(20.6 |
) |
|
(0.8 |
) % |
|
|
2,121.6 |
|
|
1,307.7 |
|
62.2 |
% |
|
|
73.4 |
|
|
5.6 |
% |
|
|
6,447.3 |
|
|
6,221.7 |
|
3.6 |
% |
|
|
(922.8 |
) |
|
(14.8 |
) % |
|
|
907.4 |
|
|
949.7 |
|
(4.5 |
) % |
|
|
(76.1 |
) |
|
(8.0 |
) % |
|
$ |
12,651.4 |
|
$ |
11,138.3 |
|
13.6 |
% |
|
$ |
(946.1 |
) |
|
(8.5 |
) % |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230206005666/en/
Vice President, Investor Relations
770-232-8229
greg.peterson@agcocorp.com
Source: AGCO
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