Financial Data and Key Metrics Changes - In fiscal year 2025, net sales and revenues decreased by 12% to $45.7 billion, while net sales for equipment operations fell by 13% to $38.9 billion [8][12] - Net income attributable to Deere & Company was $5 billion, or $18.50 per diluted share [8][12] - For the fourth quarter, net sales and revenues increased by 11% to $12.4 billion, and net sales for equipment operations rose by 14% to $10.6 billion [8][12] - Net income for the fourth quarter decreased to $1.1 billion, or $3.93 per diluted share [8][12] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating margin of 12.7% [9] - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher costs [10] - Construction and Forestry segment's net sales increased by 27% year-over-year to $3.382 billion, with an operating margin of 10.3% [13] Market Data and Key Metrics Changes - Industry sales of large equipment in the U.S. and Canada are expected to decline by 15%-20% in fiscal year 2026, while small ag and turf demand is estimated to be flat to up 5% [10][11] - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins [11][46] - South America is expected to see flat industry sales, with Brazilian demand tempered by high interest rates and strong global crop yields [11][12] Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction [37] - Deere is committed to advancing its smart industrial journey, emphasizing technology and innovation across all production systems [19][23] - The company anticipates growth in small ag and turf, as well as construction and forestry, while entering North American large ag with lean production [67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization in certain segments and geographies, despite challenges in large ag [7][8] - The company highlighted strong crop use and supportive government payments as potential upside factors [10][41] - Management acknowledged the resilience of the organization amidst a challenging market backdrop, with a focus on long-term customer value [19][67] Other Important Information - The company expects full-year net income for fiscal year 2026 to be in the range of $4 billion to $4.75 billion, with an effective tax rate between 25%-27% [17] - Cash flow from equipment operations is projected to be between $4 billion and $5 billion [17] - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in Q4 due to market uncertainty [67] Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure through price-cost positive expectations and will continue to execute activities to mitigate the impact [73][74] Question: Can you provide insights on the production plans and product mix implications for seasonality? - The company anticipates lower than normal seasonal production to start the year, with flexibility to adjust to demand in subsequent quarters [51][44]

Financial Data and Key Metrics Changes - For fiscal year 2025, net sales and revenues decreased by 12% to $45.7 billion, while net sales for equipment operations fell by 13% to $38.9 billion [8] - Net income attributable to Deere & Company was $5 billion, or $18.50 per diluted share [8] - In the fourth quarter, net sales and revenues increased by 11% to $12.4 billion, with net sales for equipment operations rising by 14% to $10.6 billion [8] - Net income attributable to Deere & Company for the fourth quarter decreased to $1.1 billion, or $3.93 per diluted share [8] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating profit of $604 million and a 12.7% operating margin [9] - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher costs [10] - Construction and Forestry segment's net sales increased by 27% year-over-year to $3.382 billion, with an operating profit of $348 million and a 10.3% operating margin [13] Market Data and Key Metrics Changes - Industry sales of large equipment in the U.S. and Canada are expected to decline by 15%-20% in fiscal year 2026, while small agriculture and turf demand is estimated to be flat to up 5% [10][11] - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins and improving arable cash flows [11] - South America is expected to see flat industry sales, with Brazilian customer demand tempered by high interest rates and strong global crop yields [11] Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction [37] - Deere is committed to advancing its Smart Industrial journey, emphasizing technology and innovation to enhance customer value [20][23] - The company anticipates growth in small ag and turf, as well as construction and forestry, while entering fiscal year 2026 with lean production in North American large ag [67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization in certain segments and geographies, despite challenges in large ag [7][8] - The company highlighted strong crop use and consumption, new trade agreements, and supportive government payments as potential growth drivers [11] - Management acknowledged the resilience of the organization in navigating a challenging market environment while maintaining strong performance levels [20][26] Other Important Information - The company expects full-year net income for fiscal year 2026 to be in the range of $4 billion to $4.75 billion, with an effective tax rate between 25%-27% [17] - Cash flow from equipment operations is projected to be between $4 billion and $5 billion [17] - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in the fourth quarter of fiscal 2025 [66] Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure this year and some from 2025, with a plan to continue executing activities to mitigate the impact [73][74] Question: Can you provide insights on the production plans and product mix implications for seasonality? - The company anticipates net sales in production precision ag to be close to the first quarter of 2025, but margins will be significantly lower due to a lean production plan [51]

Financial Data and Key Metrics Changes - In Q4 2025, net sales and revenues increased by 11% to $12.4 billion, while net sales for equipment operations rose by 14% to $10.6 billion. However, net income attributable to Deere & Company decreased to $1.1 billion, or $3.93 per diluted share [6][12]. - For the full year, net sales and revenues were down 12% to $45.7 billion, with net sales for equipment operations down 13% to $38.9 billion. Net income was $5 billion, or $18.50 per diluted share [6][12]. Business Segment Data and Key Metrics Changes - Production and Precision Ag segment saw net sales of $4.74 billion, up 10% year-over-year, with an operating margin of 12.7%. The increase was attributed to higher shipment volumes and favorable price realization [7]. - Small Ag and Turf segment reported net sales of $2.57 billion, up 7% year-over-year, but operating profit declined to $25 million due to higher tariffs and production costs [8]. - Construction and Forestry segment experienced a 27% increase in net sales to $3.382 billion, with an operating margin of 10.3% [12]. Market Data and Key Metrics Changes - The outlook for large equipment sales in North America is expected to decline by 15%-20%, while small ag and turf demand is estimated to be flat to up 5% [9][10]. - In Europe, the industry is projected to be flat to up 5%, with robust dairy sector margins and improving arable cash flows [10][43]. - South America is expected to see flat industry sales, with Brazil's demand tempered by high interest rates and strong global crop yields [10][11]. Company Strategy and Development Direction - The company aims to manage inventory carefully and avoid oversupply while focusing on used inventory reduction. This strategy is expected to position the market well for 2026 [34]. - The company is committed to advancing its smart industrial journey, emphasizing technology and innovation to enhance customer value and operational efficiency [20][66]. - The focus on R&D investment is expected to support future growth and unlock value for customers and shareholders [64][66]. Management's Comments on Operating Environment and Future Outlook - Management noted that fiscal 2025 was marked by significant challenges, but the company demonstrated resilience with over $5 billion in net income and strong operating margins [5][18]. - The company anticipates a subdued large ag market in North America for 2026 but sees growth opportunities in small ag, turf, and construction forestry segments [6][10]. - Management expressed optimism about stabilizing market conditions and the potential for growth driven by favorable commodity demand and government support for farmers [37][46]. Other Important Information - The company expects a full-year net income forecast for 2026 to be in the range of $4 billion to $4.75 billion, with a projected effective tax rate between 25%-27% [16]. - The company plans to resume normal capital allocation activities in 2026 after pausing buybacks in Q4 2025 due to market uncertainty [64]. Q&A Session Summary Question: How is the company thinking about offsetting the $1.2 billion tariff headwind in 2026? - The company expects to capture back some of the incremental exposure from tariffs through price-cost positive strategies and plans to take additional price increases as needed [70]. Question: Can you unpack the decremental margin on the sales decline in the Production and Precision Ag segment? - The company acknowledged that a significant portion of the decremental margin is attributed to tariffs, and they are working on improving profitability in other regions, particularly Brazil [74].

Financial Data and Key Metrics Changes - Net sales and revenues decreased by 9% to DKK 12.018 billion, with equipment operations net sales also down 9% to DKK 10.357 billion [10] - Net income attributable to Deere and Company was €1.289 billion, or $4.75 per diluted share [10] Business Segment Data and Key Metrics Changes - Production and Precision Ag segment net sales fell 16% year over year to €4.273 billion, primarily due to lower shipment volumes and unfavorable price realization [10][11] - Small Ag and Turf segment net sales decreased by 1% year over year to €3.025 billion, with operating profit declining slightly to €485 million, resulting in a 16% operating margin [12] - Construction and Forestry segment net sales were down 5% year over year to DKK 3.059 billion, with an operating profit of €237 million and a 7.7% operating margin [19][20] Market Data and Key Metrics Changes - In the U.S. and Canada, large ag equipment industry sales are expected to decline approximately 30% in fiscal year 2025 due to high interest rates and elevated used inventory levels [13] - Small ag and turf industry demand in the U.S. and Canada is projected to decrease by 10% [14] - European market sentiment is improving, with expectations for industry sales to be flat to down 5% in fiscal year 2025 [15] Company Strategy and Development Direction - The company is focused on disciplined execution amidst challenging market dynamics, with a strong emphasis on managing production costs and inventory levels [6][8] - Deere is positioning itself to respond effectively to market demand inflections, having reduced inventories significantly across all business segments [29][32] - The company is investing in technology and precision agriculture solutions to drive future growth and improve customer outcomes [59][110] Management's Comments on Operating Environment and Future Outlook - Management noted that global uncertainty and high interest rates are impacting customer sentiment, leading to cautious capital purchases [28] - Despite challenges, there are signs of optimism in certain markets, with improved retail sales and order activity in specific segments [9][44] - The company remains committed to delivering long-term value for customers and shareholders, leveraging its operational efficiencies and market position [67][68] Other Important Information - Tariff costs in the quarter were approximately $200 million, with a forecasted pretax impact of nearly $600 million for fiscal year 2025 [37][38] - The company has seen a positive response to pricing actions taken in the North American earthmoving market, with retail settlements up mid-single digits year over year [39] Q&A Session Summary Question: Can you provide additional color on the quarter's performance? - Management highlighted the challenges posed by global trade dynamics and interest rate expectations, emphasizing the importance of focusing on controllable factors like production and inventory management [28] Question: What are the expectations for production in relation to retail demand next year? - Management indicated that production is expected to align closely with retail demand, particularly in large ag, while small ag and turf may see some lift due to underproduction this year [75] Question: Can you elaborate on the early order programs and their trends? - Management noted that while there is caution in ordering due to market uncertainty, early returns on planters and combines are positive, though it is still early in the programs [81][82] Question: How is the company addressing pricing competition in the market? - Management acknowledged the competitive pricing environment but expressed optimism about the market's ability to bear higher pricing, especially with positive retail sales trends [86] Question: What is the outlook for cash flow guidance? - Management explained that the cash flow guidance remains unchanged due to the uncertain environment, but they feel confident about inventory levels and retail sales trends [94]

Financial Data and Key Metrics Changes - Net sales and revenues decreased by 9% to DKK 12.018 billion, with equipment operations net sales also down by 9% to DKK 10.357 billion [9] - Net income attributable to Deere & Company was €1.289 billion, or $4.75 per diluted share [9] - Operating margin for equipment operations was reported at 12.6% [5] Business Segment Data and Key Metrics Changes - **Production and Precision Ag**: Net sales decreased by 16% year over year to €4.273 billion, primarily due to lower shipment volumes and unfavorable price realization [10] - **Small Ag and Turf**: Net sales were down 1% year over year to €3.025 billion, with a slight decline in shipment volumes offset by positive currency translation [11] - **Construction and Forestry**: Net sales decreased by 5% year over year to DKK 3.059 billion, mainly due to unfavorable price realization [17] Market Data and Key Metrics Changes - In the U.S. and Canada, large ag equipment industry sales are expected to decline by approximately 30% in fiscal year 2025 due to high interest rates and elevated used inventory levels [12] - Small ag and turf industry demand in the U.S. and Canada is projected to be down 10% [13] - European market sentiment is improving, with expectations for industry sales to be flat to down 5% in fiscal year 2025 [14] Company Strategy and Development Direction - The company is focused on disciplined execution amidst challenging market dynamics, managing production costs, and inventory levels effectively [5][6] - There is an emphasis on responding proactively to market downturns and maintaining robust investment levels for future growth [65] - The company aims to build production in line with retail demand as market conditions improve [26][65] Management's Comments on Operating Environment and Future Outlook - Management noted that global uncertainty and high interest rates continue to weigh on customer sentiment, but there are signs of improved demand in certain segments [5][6] - The company remains optimistic about its order books and is well-positioned to respond to demand growth when it returns [7][65] - Management highlighted the importance of managing costs and production efficiency to navigate the current economic environment [30][32] Other Important Information - Tariff costs in the quarter were approximately $200 million, with a forecasted pretax impact of nearly $600 million for fiscal year 2025 [32][33] - The company has seen significant reductions in inventory levels across various segments, positioning itself well for future demand [26][27] Q&A Session Summary Question: Production to retail demand expectations - Management indicated that production levels could align closely with retail sales increases, particularly in large ag, while small ag and turf may see some lift due to underproduction this year [70][73] Question: Early order programs insights - Management noted that planter programs are seeing cautious ordering, while early responses for combines are positive but still early in the cycle [76][79] Question: Pricing and market competition - Management acknowledged competitive pricing pressures but noted positive market responses to recent pricing actions, with expectations for some price moderation in the fourth quarter [97][99] Question: Cash flow guidance variability - Management explained that the cash flow guidance range reflects uncertainties in the market, but they feel confident about inventory levels and retail sales trends [91][94] Question: Tariff impacts and mitigation strategies - Management provided details on the tariff costs and their allocation among business units, emphasizing ongoing efforts to mitigate these impacts [114]

Summary of Deere & Company (DE) 2025 Investor Day Company Overview - **Company**: Deere & Company (John Deere) - **Event**: 2025 Investor Day - **Date**: June 10, 2025 - **Location**: Andayatuba, Brazil Industry Insights - **Agricultural Growth in Brazil**: Brazil has transformed into one of the world's largest agricultural producers, with significant advancements in grain production efficiency and innovation over the past 40 years [5][6] - **Economic Contribution**: Agribusiness accounts for 22% of Brazil's GDP, generating over $400 billion annually, and is expected to double production over the next decade [6][7] - **Sustainable Practices**: Brazil aims to restore 22 million hectares of degraded pastures, increasing planted areas by 27% while protecting conservation areas [6][7] Key Opportunities - **Market Position**: Brazil is a leading global exporter of soybeans, sugar, cotton, and corn, with agricultural exports representing nearly half of all Brazilian exports [19][20] - **Precision Agriculture**: Adoption of precision ag technologies is expected to drive productivity and efficiency, with a focus on double cropping practices [19][20] - **Ethanol Demand**: Ethanol consumption and production in Brazil are projected to increase by nearly 40% over the next decade, driven by rising blending mandates and a growing flex-fuel vehicle fleet [21][24] Company Strategy - **Smart Industrial Strategy**: John Deere's strategy focuses on integrating advanced technologies and digital solutions to enhance customer productivity and sustainability [11][12] - **Investment in R&D**: The newly opened Research and Development Center in Brazil is aimed at developing solutions tailored to local agricultural needs [12][79] - **Product Leadership**: Continuous investment in product development and manufacturing capabilities to deliver innovative solutions that meet the unique needs of Brazilian customers [78][79] Customer Landscape - **Diverse Customer Base**: John Deere serves a wide range of customers, from large family farms to extra-large agribusiness groups, each with distinct operational needs [33][34] - **Operational Challenges**: Customers face challenges such as labor scarcity, high operational complexity, and limited connectivity, which John Deere aims to address through precision solutions [39][50] Manufacturing and Dealer Network - **Manufacturing Footprint**: John Deere has established a robust manufacturing presence in Brazil, with eight factories and a comprehensive product portfolio [55][59] - **Dealer Network**: The dealer organization has expanded significantly, with over 275 locations, providing exceptional support and enhancing customer experience [72][73] Future Growth Projections - **Connected Machines**: John Deere aims to significantly increase the number of connected machines in Brazil, targeting 2.5 times the current number by 2030 [82][83] - **Engaged Acres**: The company plans to grow engaged acres in the John Deere Operations Center by 50% and highly engaged acres by 150% by 2030 [83] Conclusion - **Strategic Positioning**: John Deere is uniquely positioned to drive differentiated value and sustainable growth in Brazilian agriculture through its strong foundation, innovative solutions, and commitment to customer success [14][17]

Financial Data and Key Metrics Changes - Net sales and revenues decreased by 16% to $12.763 billion, while net sales for equipment operations fell by 18% to $11.171 billion [16] - Net income attributable to Deere and Company was $1.804 billion, or $6.64 per diluted share [16] - Equipment operations achieved an 18.8% margin, demonstrating strong execution despite market challenges [15] Business Line Data and Key Metrics Changes - Production and Precision Ag segment saw net sales decline by 21% to $5.230 billion, with an operating profit of $1.148 billion and a 22% operating margin [17][18] - Small Ag and Turf segment's net sales decreased by 6% to $2.994 billion, with an operating profit of approximately $574 million and a 19.2% operating margin [19] - Construction and Forestry segment's net sales dropped by 23% to $2.947 billion, with an operating profit of $379 million and a 12.9% operating margin [27] Market Data and Key Metrics Changes - Large ag equipment industry sales in the U.S. and Canada are expected to decline by approximately 30% due to high interest rates and trade uncertainty [20] - Small ag and turf industry demand in the U.S. and Canada is projected to decrease by 10-15% [21] - European industry sales are expected to decrease by about 5%, while South America is forecasted to have flat sales [22][23] Company Strategy and Development Direction - The company remains committed to its Smart Industrial strategy, focusing on innovation and advanced technology integration [9][12] - A planned investment of $20 billion in U.S. operations over the next decade aims to enhance product development and manufacturing capabilities [13] - The company emphasizes maintaining customer relationships and delivering high uptime and reliability [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant global trade volatility and its impact on customer sentiment [6][16] - The outlook for fiscal year 2025 has been broadened due to a fluid tariff environment, with net income guidance now between $4.75 billion and $5.5 billion [33] - Management expressed optimism about future opportunities and the ability to drive value for customers despite current challenges [14][80] Other Important Information - The company is actively managing costs, production, inventory, and quality to navigate the uncertain market environment [9] - There is a focus on reducing used inventory levels in North America, with new inventory for tractors above 220 horsepower down over 40% year over year [62] - The company is enhancing its precision ag solutions, with significant growth in adoption and utilization of technologies like See and Spray [70][71] Q&A Session Summary Question: Can you discuss the SaaS models and the Precision Essential product line? - The company has three main SaaS offerings: precision digital technologies, sense and ag technologies, and forthcoming autonomous solutions [88][89] - The Precision Essentials product line includes foundational digital elements with a lower upfront cost and annual licensing [88] Question: What is the implied profitability for the PPA segment in the second half? - The profitability is impacted by tariff effects, mix impacts, and less favorable pricing compared to the previous year [100][101] Question: How will tariffs affect the early order program pricing for 2026? - The early order programs will maintain a similar structure, allowing for price flexibility as tariffs evolve [107][108] Question: Why are margins expected to be low in the second half of the year? - The low margins are primarily due to tariff impacts, mix changes, and less favorable pricing conditions [114]

Financial Data and Key Metrics Changes - Net sales and revenues decreased by 16% to $12.763 billion, while net sales for equipment operations fell by 18% to $11.171 billion [13] - Net income attributable to Deere and Company was $1.804 billion, or $6.64 per diluted share [13] - Equipment operations margin was 18.8%, demonstrating strong execution despite challenging market dynamics [12] Business Line Data and Key Metrics Changes - Production and Precision Ag segment net sales were down 21% to $5.230 billion, with an operating profit of $1.148 billion and a 22% operating margin [14] - Small Ag and Turf segment net sales decreased by 6% to $2.994 billion, with an operating profit of approximately $574 million and a 19.2% operating margin [15] - Construction and Forestry segment net sales declined by 23% to $2.947 billion, with an operating profit of $379 million and a 12.9% operating margin [24] Market Data and Key Metrics Changes - Large ag equipment industry sales in the U.S. and Canada are expected to decline by approximately 30% due to high interest rates and trade uncertainty [17] - Small ag and turf industry demand in the U.S. and Canada is projected to decrease by 10-15% [18] - European industry sales are expected to decrease by about 5%, while South American sales forecasts remain flat [19][20] Company Strategy and Development Direction - The company remains committed to its Smart Industrial strategy, focusing on innovation and advanced technology integration [10][12] - Plans to invest $20 billion in the U.S. over the next decade to enhance product development and manufacturing capabilities [11] - The company aims to navigate uncertain markets while maintaining investments in value-creating products and solutions [7] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of customer relationships and maintaining focus during periods of volatility [5][6] - The outlook for fiscal year 2025 has been broadened due to a fluid tariff environment, with net income guidance now between $4.75 billion and $5.5 billion [30] - Management expressed optimism about future opportunities despite current market challenges [12][68] Other Important Information - The company is actively working on mitigating tariff impacts, with an expected pre-tax tariff impact of over $500 million for fiscal year 2025 [38] - The company has seen stabilization in the North American ag market, which may provide reassurance if uncertainties abate [50] Q&A Session Questions and Answers Question: Can you discuss the SaaS models and the Precision Essential product line? - The company has three main SaaS offerings: precision digital technologies, sense and ag technologies, and forthcoming autonomous solutions [74][75] - The Precision Essentials product line includes core elements of precision agriculture, offered at a lower upfront cost with an annual license [74] Question: What is the implied profitability for the PPA segment in the second half? - The tariff impact and a mix impact from North American large ag being down are significant factors affecting profitability [82] Question: How will the early order program pricing change in 2026? - The structure of early order programs will remain similar, providing price flexibility as tariffs evolve [87] Question: Can you clarify the price-cost conversation and potential pricing strategies for 2026? - The company is reviewing list prices for 2026 to ensure they can continue to push pricing ahead of inflation [99]