Market Perspectives for the German and European Agricultural Machinery Industry Gerd Wiesendorfer VDMA Agricultural Machinery Association 2013-11-12 Agrievolution Economic Committee Page 1
Business climate of German manufacturers remains positive Question: We consider our current business to be. very good good satisfying unfavourable very unfavourable 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: CEMA Business Barometer, evaluation of companies based in Germany 2013-11-12 Agrievolution Economic Committee Page 2
Outstanding performance of German machinery in major markets % change 2013 for the main markets of the German agricultural machinery industry 5,0 4,5 Germany 4,0 France 3,5 Total market (full year) Total market (Jan-Jun) German exports (Jan-Jun)* 3,0 USA 2,5 Russia 2,0 1,5 United Kingdom 1,0 0,5 Poland 0,0 2000-30 2001-25 2002-20 2003-15 -10 2004-52005 0 2006 5 2007 10 200815 2009 20 2010 25 30 Source: VDMA, own estimations and calculations; *for Germany: national production for German market 2013-11-12 Agrievolution Economic Committee Page 3
German Agricultural Machinery Exports Situation for main destination markets Exports from Germany to 1600 1400 2009 2010 2011 2012 2013e 1200 in Mill. Euro 1000 800 600 400 200 0 Source: Federal German Statistics Agency, VDMA 2013-11-12 Agrievolution Economic Committee Page 4
Order backlog slightly below the level of the previous year New Orders of the German ag. machinery industry nominal, index 2010=100, without seasonal adjustment Current comparison to previous year: Jul - Sep 13: -2%; Sep 13: -3% 230 200 170 2010 2011 2012 2013 140 110 80 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 97 95 96 83 103 77 72 64 103 144 131 158 2011 178 156 141 118 106 83 100 91 113 182 164 205 2012 199 157 129 129 101 98 107 89 113 227 157 175 2013 200 144 147 124 102 104 116 78 110 Source: Quelle: VDMA, figures Zahlen related bezogen to manufacturers auf Landtechnik-Hersteller in Germany in Deutschland 2013-11-12 Agrievolution Economic Committee Page 5
Forecast for German agricultural machinery industry 2013: +7% to new all-time-high Turnover in Bn. Euro Nominal %-change 7,5 7,0 7,7 8,2 14 17 24 27 4,5 4,7 5,2 6,1 5,6 5,5 5 10 10 7-2 -25 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e Source: VDMA Agricultural Machinery Association, Production in Germany 2013-11-12 Agrievolution Economic Committee Page 6
Marketing challenges for farmers in 2013 due to price drop for arable crops Average future price for quality wheat - per ton (mix of various stock exchanges) 300 280-28% 260 240 220 200 180 160 140 120 100 80 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 2007 2008 2009 2010 2011 2012 2013 Source: finanzen.net, VDMA Agricultural Machinery Association, last value for Oct 2013 2013-11-12 Agrievolution Economic Committee Page 7
but overall farming conditions remain favourable Good quantities harvested in Europe EU +10% to 298 mn tons Above average results in Germany and France Compensation of poor 2012 results in Central / South East Europe Lower commodity prices Sharp drop for all arable crops (wheat, barley, rapeseed) with recent recovery Long-term comparison: average prices Positive milk and meat prices Comparably lower input cost Still above long-term average, but slight drop compared to 2012 (feed, fertiliser, energy) No major change in European agricultural policy (CAP) Budget for 2014-2020: 370 bn reduction by 12% (after inflation) Major tools (direct payments) remain unchanged Some regional and sectoral impact on markets can be expected 2013-11-12 Agrievolution Economic Committee Page 8
The mood amongst farmers is currently at a very high level German Agrarian Business Barometer Index: zero = mean 2000 2006 Sources: Produkt+Markt, VDMA 2013-11-12 Agrievolution Economic Committee Page 9
Investment planning of German farmers over the previous year s level Share of agricultural holdings in Germany with investment plans for agricultural machinery (for half year ahead) 25 2009 2010 2011 2012 2013 20 20 20 20 % of interviewees 15 10 16 5 0 January April July October Source: Agrarian Business Barometer, VDMA 2013-11-12 Agrievolution Economic Committee Page 10
German Agricultural Machinery Market Market Volume in Bn. Euros %-change in nominal terms 5,0 5,4 5,6 23 23 4,5 4,0 3,5 3,0 2,5 2,7 2,6 2,9 4,5 3,9 3,9 3,7 3,3 4,8 12 16 10 14 3 2,0-3 -2 1,5 1,0 0,5-8 -13 0,0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e Source: VDMA Agricultural Machinery Association, forecast status: July 2013 2013-11-12 Agrievolution Economic Committee Page 11
The high demand for tractors underlines this thesis Tractor registrations in units France* Germany 40000 35000 30000 25000 20000 15000 10000 5000 2007 2008 2009 2010 2011 2012 2013e France* 35083 40716 36800 29123 35409 39089 42000 Germany 28451 31250 29464 28587 35977 36264 35000 * excluding telescopic handlers Sources: Federal German Traffic Agency (KBA), VDMA, AXEMA, Forecast 2013: VDMA 2013-11-12 Agrievolution Economic Committee Page 12
German Tractor Market New Registrations of Tractors in Germany (in units, total over all hp segments*) 5000 2011 2012 2013 Jan Dec 2011: +26% Jan Dec 2012: +2% Jan Oct 2013: +/-0% 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 1546 1995 3725 3271 3382 3095 3160 2708 2813 2905 2861 4516 2012 1827 2071 4401 3366 3119 3321 3457 2988 2263 2856 2409 4186 2013 1647 2069 3559 3990 3115 3173 3898 2587 2469 3046 Source: KBA * excluding ATVs and telescopic handlers Forecast 2013: ca. 35,500 units 2013-11-12 Agrievolution Economic Committee Page 13
Agricultural Machinery Market Development: Comparison for the EU and Germany Development of the Market Volumes in Bn. Euro 5,5 +14% +3% 30 Germany EU 5,0 26 4,5 Germany 4,0 +6% -1% 22 EU 28 3,5 3,0 18 2,5 2,0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e Germany 2,59 2,90 3,35 3,69 4,54 3,93 3,87 4,76 5,41 5,60 EU 17,71 18,57 20,05 22,44 25,52 21,04 20,58 24,31 25,77 25,42 14 Source: VDMA Agricultural Machinery Association, Eurostat, EU calculation including Croatia starting in 2009 2013-11-12 Agrievolution Economic Committee Page 14