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瑞银_美股_重型机械行业_2018年Q1机械行业指南_2018.4.4_34页

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Machinery 4 April 2018 2ContentsMachinery ..... 3AGCO Corp (AGCO) ....... 3Caterpillar(CAT) . 5CNH Industrial(CNHI) .... 7Cummins(CMI) .. 9Deere & Co. (DE) ........... 11H&E Equipment(HEES) .. 13Illinois Tool Works (ITW) .. 15Kennametal(KMT) ........ 17Manitowoc(MTW) ....... 19Navistar International(NAV) ....... 21PACCAR(PCAR) .......... 23Terex(TEX) ..... 25United Rentals(URI) ...... 27The following notes and commentary are excerpted from company press releases,conference calls, and presentations Figure 2: Summary of UBS Machinery CoverageSource:Company reports, FactSet, UBS estimatesPriceStock PriceMkt-Cap CompanyTickerRatingTarget4/3/2018($MM)20172018E2019E2020E20172018E2019E2020E CaterpillarCATBuy$190.00$145.06$86,6926.878.8610.3511.5521.116.414.012.6 ManitowocMTWNeutral (CBE)$37.00$28.12$992-0.300.601.202.00nmf46.823.414.0 Terex CorpTEXBuy$52.00$36.70$2,9431.362.603.354.1527.014.111.08.8 Construction, Mining & Industrial Machinery Average24.025.816.111.8 Illinois Tool WorksITWNeutral$174.00$155.36$53,0556.777.658.559.2522.920.318.216.8 KennametalKMTSell$35.00$39.25$3,2001.522.452.853.1025.816.013.812.7 Diversified Industrial & Component Suppliers Average24.418.216.014.7 Deere & Co.DENeutral$175.00$153.04$49,5536.659.6511.0011.8523.015.913.912.9 CNH IndustrialCNHIBuy$17.00$12.12$16,5280.480.650.851.0025.118.714.312.2 AGCOAGCONeutral$70.00$65.23$5,1893.013.754.104.4021.717.415.914.8 Agricultural Equipment Average23.317.314.713.3 PACCARPCARBuy$84.00$65.71$23,1174.265.405.705.4515.412.211.512.1 Cummins Inc.CMINeutral$176.00$160.10$26,44910.5812.4513.1013.6015.112.912.211.8 Navistar Intl.NAVNeutral$45.00$34.32$3,3840.311.502.252.40nmf22.815.314.3 Trucks & Engine Average15.315.913.012.7 United RentalsURINeutral$196.00$169.50$14,31710.6113.7514.5015.0016.012.311.711.3 H&E EquipmentHEESSell$18.00$37.73$1,3451.721.501.601.7021.925.223.722.2 Rental Equipment Average19.018.717.716.7 Machinery Median21.916.414.012.7 UBS EPS Estimates (FY)P/E Ratio (Current) Steven Fisher, CFAAnalyststeven.fisher@ubs+1-212-713 8634Erika JacksonAssociate Analysterika.jackson@ubs+1-212-713 1426 Machinery 4 April 2018 3MachineryAGCO Corp (AGCO)Management's outlook: Retail Tractor/Combines Industry Sales:2018 Forecast NotesNorth America ~Flat - Unchanged; The farm equipment fleet has begun to age and row cropfarmers are now starting to look at replacement demandSouth America ~Up 0-5% - Unchanged; Given current farm economics in BrazilWestern Europe ~Flat - Unchanged; 2018 European farm income is expected to improve modestly,driven by better dairy economics and higher 2017 wheat production For 2018, we will evaluate potential share repurchases starting in the latter portion of the year to coincide with ourseasonal cash generation. In addition, the repatriation provisions of the recently enacted U.S. tax reform will give usmuch more flexibility in this area. Our 2018 forecast assumes relatively stable industry demand across all regions. FY 2018 NotesEuropean Sales Up ~8-9% vs. 2017 - From Dec 2017 Investor Day; +1.5% from pricing; 2-3% on an organicbasis, excluding FX impactRevenue ~$9.1b - Prior: ~$9b; ~+3.5% FX (~+3% prior); EUR $1.22; +2.5% acquisitions;Our plan includes market share improvement with price increases ofabout 1.5% on a consolidated basis; ~9% growth vs. 2017Pricing +1.5% YoY - UnchangedGSI organic growth 3-4% - The global trend towards growing population and increased proteinconsumption should make our GSI business an attractive source ofprofitable growth for AGCO in the years aheadProduction volumes Up ~4% vs. 2017 - Our production should be up in all regions. The biggest increasewould likely be in our South America regionOperating margins +50bps - Unchanged; Due to higher sales levels and the benefit of productivityand purchasing initiatives partially offset by investments we are makingand long-term initiativesEffective tax rate ~38% - Unchanged; The rate will be much higher in the first quarter of 2018compared to the remaining quarters in 2018Engineering Expense ~$360m - Expected to run about 4% of our sales;Up $35m vs. 2017Adj. EPSQ1~$3.50$0.05-0.10- UnchangedFCF ~$225m - Unchanged; Covering inventory build associated with new emissionsregulations in Europe and in Brazil- Net cash provided by operating activities: ~$475mInterest expense ~$115m - Prior: slightly over $110m; similar to 2017 levelsRepurchase $331.4m remaining- As of 12/31/17; The authorization of $300m will expire in December2019, the remaining $31.4m has no expiration dateCapEx ~$250m - Prior: $275m; Up $50m vs. 2017; We intend to increase the level ofinvestment in 2018 to execute our product development plans andmeet new emissions requirements in both Brazil and in EuropeMachinery 4 April 2018 4 As we move into 2018, our production will start out relatively low, but build up throughout the course of the year andoverall will be higher because, again, we had low production last year and we need to build up inventory for anotherround of emissions-related new products in 2019 in South America. We expect to see growth relating to market share growth, a little growth in our GSI business and some parts salesgrowth as well. So we do expect to grow, despite as we're forecasting at this point, relatively flat market condition. [Operating margins] In North America, it should be pretty close or in line to [expected overall 50 bps marginimprovement]. Europe as well. The Asia/Pacific/Africa segment we had a very strong year in 2017, so we're looking atthat to be a little flatter or maybe even slightly down. And then South America, we would expect the improvement to belarger than our company average. Inventory for next year should be relatively flat year-over-year. We do expect to have some working capital usage,though, probably more in the areas of accounts receivable and accounts payable and accrued expenses. And so, overall,have a working capital usage of about $75 million for next year.Europe We do expect [dairy prices] to kind of move down this year, and we've kind of baked that into our forecast for Europe.So that's part of the reason that we didn't forecast, I think, for more growth in Europe is that, that sector had alreadyrecovered. And so, we're not looking for any more growth in that dairy sector. So, more stability in 2018. We think about incrementals going forward on an organic basis, we're still thinking around kind of in the low to mid20s percent for Europe.North America So 2018, North America, our forecast does assume some modest growth in some of the sectors, some of the higherhorsepower equipment, tractors, combines, but with some lower sales expected in small tractors. The small tractorindustry is at basically record levels right now. And so, we think the market is going to stay very strong, but areanticipating a little pullback there just because we don't think it's sustainable at that level. And so, that's how we kindof net out to kind of a flat market in North America. As we look about how we're going to manage our production and our wholesale versus retail activity, we do expect towholesale less than retail again in North America in 2018. We want to continue to reduce dealer inventory levels. In2017, we reduced our dealer inventory by about 12%, and we're looking for somewhere about a 10% reduction herein 2018. So, we want to continue to drive down dealer inventories and make ourselves more efficient.South America We're looking at somewhere 150 basis point improvement in our [South American] margins in 2018. We're going tostart out pretty slow and then in second half hoping to get to a little more… I don't know if I'd call them normalizedmargins, but decent margins… And so, this isn't going to be one quarter and all of a sudden we're done; it's going tobe a gradual change and a gradual improvement, I'd say, through 2019.Cost-Saving Actions & Long-Term Targets: (from 12/19/17 investor day) Long Term Target NotesMargins ~10% - under more normal market conditions; incrementalmargins of low 20s to high 20% on normalized salesSG&A and fixed manufacturing costs~$75m total savings - From 2017-2019; ~$15m in 2017, ~$20m in 2018,~$40m 2019Purchasing and sourcing savings $40-50m - incremental annual savingsProduction Systems savings $15-20m - incremental annual savingsProduct launches 73 new & upgraded tractors - 40 harvesters; in 2018-2021。。。。。。