Key Figures and Trends for the Agricultural Machinery Industry Update: November 2015 (monthly) Contact: Philip Nonnenmacher VDMA Agricultural Machinery Association philip.nonnenmacher@vdma.org Subject to correction VDMA
VDMA Production, Turnover, Trade, Order Intake and Business Climate
Global Turnover of the Agricultural Machinery Industry according to location Production Volumes in billion Euro 110 100 90 80 70 60 50 40 30 20 10 0 7,4 8,2 7,2 6,6 6,0 22,6 22,8 21,8 6,8 6,6 21,2 18,5 5,7 4,8 5,8 5,9 4,3 5,6 20,0 20,4 4,6 4,4 4,8 5,5 5,1 19,0 19,5 6,9 6,4 6,6 4,5 3,9 18,5 5,0 5,9 5,0 4,7 4,5 4,0 4,5 4,0 16,1 18,5 18,3 4,4 3,5 3,1 3,5 4,2 14,4 17,5 4,0 3,2 8,0 3,8 3,2 6,7 11,3 4,8 9,5 21,4 23,5 27,2 21,6 22,0 26,6 28,7 29,3 28,2 25,5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Rest of the World South / Central America North America (NAFTA) Rest of Asia Japan India China Turkey Rest of Europe European Union Source: VDMA (estimations, status September 2015) VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 3 02/11/2015
Turnover of the German Agricultural Machinery Industry Turnover in Bn. Euro 8,4 24 Nominal %-change 27 5,2 6,1 7,5 5,6 5,5 7,0 7,7 7,7 7,2 6,8 10 17 10 10-2 -8-7 -5-25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e Source: VDMA Agricultural Machinery Association, production in Germany, updated in November 2015 VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 4 02/11/2015
German Agricultural Machinery Production Quarterly % change German ag machinery industry (each compared to previous year s period) 48 24 33 18 17 17 30 35 26 16 24 4 5 5 2 17 11 8 1 3-1 -7-4 -12-12 -13-14 -27-22 -35-41 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 2008 2009 2010 2011 2012 2013 2014 2015 Source: VDMA Agricultural Machinery Association VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 5 02/11/2015
German Agricultural Machinery Production Quarterly German Turnover in million 2007 2008 2009 2010 2011 2012 2013 2014 2015 2400 2000 1600 1200 800 400 0 1st quarter 2nd quarter 3rd quarter 4th quarter Source: VDMA VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 6 02/11/2015
German Agricultural Machinery Production Januar September, in million Turnover 2012 2013 2014 2015 2015/14 Change Ag Machines 3.344,5 3.498,1 3.490,4 3.298,7-5,5% Tractors 2.683,3 3.114,4 2.649,2 2.484,4-6,2% Total 6.027,8 6.612,6 6.139,7 5.783,1-5,8% Germany Ag Machines 989,5 990,7 1023,9 1025,6 +0,2% Tractors 727,2 852,2 721,6 644,5-10,7% Total 1.716,7 1.842,9 1.745,5 1.670,2-4,3% Exports Ag Machines 2.355,0 2.507,4 2.466,5 2.273,1-7,8% Tractors 1.956,1 2.262,2 1.927,6 1.839,9-4,6% Total 4.311,1 4.769,7 4.394,2 4.112,9-6,4% Values: Jan-Sept in each year, in million Euro Source: VDMA Agricultural Machinery Association VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 7 02/11/2015
Current Order Book Situation New Orders of the German ag. machinery industry nominal, index 2010=100, without seasonal adjustment 230 200 170 2012 2013 2014 2015 140 110 80 Sep 15/14: -11% Jul Sep 15/14: -7% 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 199 157 129 129 101 98 107 89 113 227 157 175 2013 200 144 147 124 102 104 116 78 110 216 135 173 2014 199 140 116 109 102 88 82 72 158 165 117 146 2015 160 113 123 105 89 83 83 67 140 Source: VDMA, figures related to manufacturers in Germany VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 8 02/11/2015
Current Order Book Situation for the German market New Orders of the German ag. machinery industry for the German market nominal, index 2010=100, without seasonal adjustment 200 170 140 2012 2013 2014 2015 Sep 15/14: -40% Jul Sep 15/14: -24% 110 80 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 171 155 129 120 95 80 100 101 88 169 156 152 2013 160 140 150 121 90 92 127 74 87 153 145 171 2014 166 109 99 82 90 81 73 68 137 137 93 132 2015 125 101 122 67 77 84 74 53 82 Source: VDMA, figures related to manufacturers in Germany VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 9 02/11/2015
German Agricultural Machinery Exports 2015 year-to-date results for the top 15 destinations Tractors Pos Destination % share Change 01-08/2015 1 USA 18,8 20% 2 France 16,6-17% 3 United Kingdom 10,1-17% 4 Italy 5,9 4% 5 Poland 4,9-10% 6 Spain 4,3-5% 7 Netherlands 3,6-6% 8 Switzerland 3,2 35% 9 Austria 2,7-15% 10 Belgium 2,1 4% 11 Australia 2,0-3% 12 Norway 2,0 22% 13 Belgium 1,9-22% 14 Romania 1,8-1% 15 Sweden 1,7-20% Agricultural machines Pos Destination % share Change 01-08/2015 1 France 13,9-11% 2 USA 8,0-6% 3 Russian Federation 6,0-30% 4 Poland 5,9-1% 5 United Kingdom 5,6-15% 6 Austria 5,4 4% 7 Netherlands 4,9-1% 8 Italy 3,2 9% 9 Czech Republic 3,0 3% 10 Switzerland 2,9 16% 11 Ukraine 2,8 5% 12 Hungary 2,5-19% 13 Bulgaria 2,4 31% 14 Denmark 2,3-11% 15 China 2,1-9% Remark: Tractor exports to the USA do not seem correct a request has been placed towards the German authorities. VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 10 02/11/2015
German Agricultural Machinery Exports Top 20 destinations Exports from Germany to 1600 1400 2011 2012 2013 2014 2015e 1200 in Mill. Euro 1000 800 600 400 200 0 Source: Federal German Statistics Agency, VDMA (incl. estimation July 2015) VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 11 02/11/2015
Business Climate in the European Agricultural Machinery Industry CEMA Business Climate Index (CBI) CEMA Business Cycle 100 80 60 40 20 0-20 -40 201103 201106 201109 201112 201203 201206 201209 201212 201303 201306 201309 201312 CBI Present Situation Future Expectation 201403 201406 201409 201412 201503 201506 201509 90 Balance 70 50 30 10-10 -30-50 Expectations for the next 6 months Upswing 2010 2011 2012 2013 2014 Jan-Oct 2015 Boom -60-80 -100 Source: CEMA, October 2015-70 Recession Downswing -90-90 -70-50 -30-10 10 30 50 70 90 Evaluation of current business Balance Source: CEMA Business Barometer, each value as an average of the last two months VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 12 02/11/2015
Market Development VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org
Global Agricultural Machinery Market Trends Agritech Business Climate Index Possible range from -100 to +100 100 Oct 12 Apr 13 Oct 13 Apr 14 Oct 14 Apr 15 Oct 15 80 60 40 20 0-20 -40-60 -80 World* USA Brazil Western Europe Turkey Russia India China Korea Japan Remark: low number of participants in October 2015 for Brazil and Korea that might not be representative for the entire country Source: Agritech Business Barometer Survey, Agrievolution *weighted global average VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 14 02/11/2015
Agricultural Machinery Market Trends in the EU Country Index 201508 201509 201510 1 Spain -2 10 13 2 France -3 2 11 3 Italy -3 6 7 4 Romania -11-5 4 5 Czech Republic + Slovakia -7-2 1 6 Switzerland -3 3 0 7 Other new EU member states -12-5 -2 8 Poland -5-2 -3 9 Scandinavia (DK, N, S) + FIN -13-10 -3 10 Netherlands -18-4 -5 11 Belgium -17-11 -7 12 UK + Ireland -10-8 -10 13 Austria -16-11 -13 14 Germany -17-12 -17 15 CIS countries -43-30 -17 Status October 2015 Explanatory note: Possible index scale: from -100 to +100 All single market indications given in the survey are summed up and weighted according to the extent of expected decrease/increase positive index value illustrates prevailing expectation for increasing turnover in this market over the next six months negative index value illustrates prevailing expectation for decreasing turnover in this market over the next six months Country ranking ascending from highest increase resp. lowest decrease to lowest increase resp. highest decrese. VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 15 02/11/2015
German Agricultural Machinery Market Market Volume in Bn. Euros %-change in nominal terms 5,0 5,4 5,6 5,5 4,5 4,0 3,5 3,3 3,0 3,7 4,5 3,9 3,9 4,8 5,0 16 10 23 23 14 2,5 3 2,0 1,5-2 -1 1,0 0,5-13 -10 0,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Source: VDMA Agricultural Machinery Association, status: November 2015 VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 16 02/11/2015
German Agricultural Machinery Market by Segments in million 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e % change 2014 % change 2015 Tractors 1.032 1.232 1.612 1.342 1.345 1.699 1.901 2.046 1.973 1.780-4% -10% Soil Working Equipment 146 150 191 185 171 199 253 266 263 225-1% -14% Seed Drills 31 31 45 40 35 47 77 82 84 78 3% -7% Precision Seed Drills 13 15 18 18 23 30 36 39 37 33-5% -12% Mineral Fertilizer Spreaders 25 19 32 30 25 35 38 45 44 39-3% -11% Plant Protection Equipment** 38 36 59 67 58 61 78 98 111 94 12% -15% Mowers, Tedders, Rakes 175 154 178 159 153 196 240 240 230 216-4% -6% Combine Harvestes 294 281 346 327 211 312 332 298 314 300 5% -5% Balers 57 63 83 83 73 84 95 105 92 88-13% -4% Forage Harvesters 73 71 71 78 107 127 142 105 110 108 4% -2% Milking and Cooling Equipment 100 135 184 150 156 196 204 211 237 198 12% -16% Groundcare equipment 291 324 382 386 406 454 507 521 540 520 4% -4% Others* 1.090 1.178 1.340 1.072 1.105 1.315 1.514 1.500 1.457 1.280-3% -12% 0 Total market volume 3.364 3.688 4.539 3.934 3.868 4.756 5.417 5.558 5.490 4.959-1% -10% * parts, machines for feeding and transport, other harvesting and arable equipment, irrigation, slurry and manure equipment, others. Remark to soil w orking equipment, seeding, plant protection: values as of 2012 not comparable w ith previous years ** w ithout knapsack sprayers Status November 2015 VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 17 02/11/2015
German Tractor Market New Registrations of Tractors in Germany (in units, total over all hp segments*) 4500 2013 2014 2015 2014 total: 34,611 units (-4.5%) Jan-Sep 2015: -10% (-14% for > 50 hp tractors) 4000 3500 3000 2500 2000 1500 1000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 1646 2069 3559 3990 3115 3173 3898 2587 2469 3046 2540 4156 2014 1610 2410 3895 3534 2753 3024 3426 2403 3115 2761 1894 3786 2015 1528 1896 3531 3458 2593 2757 3294 2153 2361 Source: KBA * excluding ATVs and telescopic handlers VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 18 02/11/2015
German Tractor Market Development with distinction of power range Registrations of new tractors in Germany 40000 36000 Total >50 hp 32000 28000 24000 20000 16000 12000 8000 4000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 23492 29015 28451 31250 29464 28587 35977 36264 36248 34611 >50 hp 19730 24459 24330 27288 25228 23081 28416 30162 29675 28444 Sources: KBA, VDMA, since 2010 excluding telescopic handlers VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 19 02/11/2015
Medium- and long-term influencing factors driving demand for agricultural machinery Increasing demand and Scarcity of agricultural products due to» further growing world population» higher living standards in large emerging economies (with changing consumption habits)» new forms of use of agricultural commodities for bioenergy» higher crop risks (drought, floods) leading to greater mechanization pressure in agriculture to» increase yields per hectare» open up new areas» produce high quality food The downturn since the middle of 2014 is a temporary phenomenon after having long and strong upturns (until 2008 and from 2010 until 2014). In the long term, the demand for modern machinery remains high. Especially in emerging markets, there is still great potential. VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 20 02/11/2015
Selected Agricultural Information VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org
Long-term Development of Global Agricultural Production Gross agricultural production in billion USD at constant prices (2004-2006) 800 700 600 Cereals Livestock 500 400 300 200 100 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: FAO VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 22 02/11/2015
Long-term Development of Global Agricultural Production Regional comparison Gross agricultural production in billion USD at constant prices (2004-2006) 1400 Europe 2500 Single Continents 1200 1000 800 600 400 200 Asia Americas Africa World 2000 1500 1000 500 World Increments 1980-2013 Agricultural production Population Total Annual Ø Total Annual Ø World 125% 2,4% 61% 1,4% Europe 36% 0,9% -1% 0,0% Asia 184% 3,1% 67% 1,5% Americas 103% 2,1% 57% 1,3% Africa 228% 3,6% 132% 2,5% 0 0 Source: FAO VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 23 02/11/2015
Agricultural Commodity Price Development Global price indices for different agrarian products (FAO) Deflated index basis 2002-2004=100 290 270 250 230 210 Meat Dairy Products Cereals Sugar 190 170 150 130 110 90 70 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Food and Agricultural Organization (FAO), last indicated month: September 2015 VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 24 02/11/2015
Continuous Decline on the Milk Market Average price paid to German farmers for 1 kg of milk (standard fat and protein values) 44 42 40 38 36 34 32 30 28 26 24 22 20 18 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 11 1 3 5 7 9 2008 2009 2010 2011 2012 2013 2014 2015 Source: AMI, last value for September 2015 VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 25 02/11/2015
How do German farmers evaluate their economic situation? Evaluation of the main drivers Prices / harvest Policy Input cost Grains* (sale) Milk* Cattle* Pigs* Piglets (purchase)* Feed (purchase)* Maize for biogas (purchase)* Fertilizer (purchase) Seeds (purchase) Harvest result 2015 National agricultural policy National tax policy CAP (EU ag. policy) Competition within the EU Price for land rent* Interest rate for loansl Electricity cost Fuel cost Leasing for machines 5... 4,5 4,0 3,5 3,0 2,5 2,0 1 (very) negative impact (very) positive impact September 2015 2015 Ø values; * Filter: Enterprise has... (Cows/cattle/pigs/grains/rapeseed/biogas plant/kulturanbau/pachtfläche) Source: Agrarian Business Barometer VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 26 02/11/2015
Business Climate of German Farmers 32,2 39,4 33,9 12,0 36,2 21,0 35,3 34,1 33,1 37,2 30,7 26,6 21,2 14,4 14,6 12 13,1 14,7 19,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Agrarian Business Barometer VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 27 02/11/2015
Livestock and forage production particularly sensitive to the continued negative price development good (2,0) (2,5) satisfactory (3,0) (3,5) unfavorable (4,0) (4,5) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Arable farms (n = 395) Forage production farms (n = 309) Livestock farms (n = 89) Ø Werte; 1 = sehr gut; 3 = befriedigend; 5 = sehr ungünstig Source: Agrarian Business Barometer VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 28 02/11/2015
Investment Plans of German Farmers Total investments* 28% 34% Machinery and equipment Farm buildings Courtyard and stable equipment Renewable energy Besides agriculture Electronics (retrofit systems)) 14% 18% 9% 13% 4% 6% 2% 2% 2% 3% <1% 1% Okt. 15 16 Okt. 14 15 * Excluding land purchase % Businesses with investment planning incl. investment probabilities (new or used) Source: Agrarian Business Barometer VDMA Key Figures and Trends - Contact: Philip.Nonnenmacher@vdma.org Page 29 02/11/2015