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Noealt Corporate

Services

November 2014

Strategic Factor Analysis Summary (SFAS) Framework Analysis - 2015

World’s 6 Leading Agriculture Equipment Manufacturers

© Noealt Corporate Services. All Rights Reserved.

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Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – 2013 Vs. 2012 &

Q1-Q3 FY2014 Vs. Q1-Q3 FY2013

- Sales Revenues Growth - Gross Earnings & Margin - Operating Earnings & Margin - Net Earnings - Profitability Growth - Profit Margins - Cash Flow from Operations

Table of Contents - 1

John Deere & Co.


Internal Factor Analysis Summary

(IFAS) Matrix

External Factor Analysis Summary

(EFAS) Matrix

Strategic Factor Analysis Summary

(SFAS) Matrix

Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – 2013 Vs. 2012,

Q1-Q3 2014 Vs. Q1-Q3 2013 & H1 2014 Vs. H1 2013



CNH N.V.



(IFAS) Matrix


(EFAS) Matrix


(SFAS) Matrix

Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – 2013 Vs. 2012 &

Q1-Q3 2014 Vs. Q1-Q3 2013



AGCO Corporation



(IFAS) Matrix


(EFAS) Matrix


(SFAS) Matrix

Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – 2013 Vs. 2012



CLAAS Group



(IFAS) Matrix


(EFAS) Matrix


(SFAS) Matrix

Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – 2013 Vs. 2012



SAME Deutz-Fahr

Group S.p.A.



(IFAS) Matrix


(EFAS) Matrix


(SFAS) Matrix

Section - 1 Business Structure & Snapshot a) Founded b) Headquartered c) Business Segments d) Employees e) Revenues f) Market Capitalization g) Key Executives h) Shareholding/Ownership Pattern & Structure Section – 2 Financial Performance Snapshot – FY2014 Vs. FY2013

& H1 FY2015 Vs. H1 FY2014



Kubota Corporation



(IFAS) Matrix


(EFAS) Matrix


(SFAS) Matrix

Section – 7 Global Agriculture Equipment Industry – Force Field Analysis

Section – 8 Key Industry Trends, Issues, Risk Factors, Challenges & Industry Outlook



About Strategic Factor Analysis Summary (SFAS) Framework - 1


Background :-

Strategic Factor Analysis Summary(SFAS) matrix, also referred to as Quantitative SWOT Analysis, is a framework developed by T. L. Wheelen and J. D. Hunger, which

is used widely across organizations globally as a key strategic planning tool. The framework trifurcates an organization’s operating environment into Societal, Task &

Internal environment respectively with the societal & task environments together constituting the firm’s external environment :

--Societal Environment: Refers to Generic Macroeconomic forces & factors at play

--Task Environment: Comprises of industry environment that includes customers, suppliers, competitors etc.

--Internal Environment: Refers to the firm’s internal structure, resources, capabilities & functioning that form the basis of firm’s strengths & weaknesses.

The framework, thus, outlines, summarizes & generates an insightful snapshot of key strategic factors of an organization based on a comprehensive external

environmental assessment to identify potential opportunities & pertinent threats based on an External Factor Analysis Summary (EFAS) matrix along-with a detailed

analysis of organization’s internal environment to identify core strengths & weaknesses through an Internal Factor Analysis Summary (IFAS) matrix. The framework finally

reviews the firm’s potential strategic options.

The framework generates a snapshot of the prevailing, overall strategic equation for an organization at a given point in time by identifying, weighing, prioritizing & ranking

strategic factors in the internal & external environment based on their significance & potential degree of impact along-with the organization’s corresponding response to

the factors.

Usefulness over Traditional SWOT:-

The framework scores over traditional SWOT analysis framework in terms of its ability to quantify strengths, weaknesses, opportunities & threats respectively based on

the potential degree of effect of each strategic factor being analyzed and the organization’s commensurate degree of responsiveness to that; thereby making it much

more effective from the perspective of strategic planning, competitive assessment & analysis standpoint.

About Strategic Factor Analysis Summary (SFAS) Framework - 2


Methodology:-

The SFAS Framework is comprised of three matrices, i.e., IFAS (Internal Factor Analysis Summary), EFAS (External Factor Analysis Summary) & SFAS (Strategic Factor

Analysis Summary) respectively.

IFAS & EFAS matrices each contain factors classified under Strengths & Weaknesses for IFAS and Opportunities & Threats for EFAS.

1. Up to 5 factors are included in the IFAS & EFAS matrices based on the relevance of factors to the organization and are sorted in the first column.

2. In the second column, each of the factor’s significance is assessed (by assigning weights ranging from 0 – least significance to 1 – greatest significance),

depending on their influence on/magnitude of the strategic positioning of the organization. Greater the weight of the factors, larger the influence & potential

magnitude on the organization’s positioning. Total sum of the weights is equal to 1, no matter the number of factors. The abi lity of the organization to respond to each

of these factors & the organization’s current/existing degree of responsiveness(assessed based on strategic initiatives, developments & activity) with reference to

that factor is then analyzed, taking into consideration their importance for that specific organization.

3. Ability & the existing degree of responsiveness of the organization to respond to each of these factors is rated in the third column, with rating from 1 to 5 (1-

inadequate, 5 -excellent).

4. Multiplication of the weight of the factor and the organizations’ current degree of responsiveness gives a weighted score for each individual factor (fourth column).

5. In the fifth column comment is given about the analysis & potential implications.

Total weighted score is thus a combination of strategic positioning & the degree of responsiveness to strategic factors and indicates the degree of organization’s

responsiveness & effectiveness in responding to external as well as internal strategic factors having varying degree of magnitude of potential impact on the

organization.

SFAS matrix synthesizes & integrates results of EFAS and IFAS analysis and reprioritizes & ranks strategic factors once again by reassigning weights and re-rating them

to generate a fresh weighted score for each factor. The SFAS ultimately provides a single, total SFAS score on the organization by summing up weighted scores for

Strengths, Weaknesses, Opportunities & Threats respectively.


IFAS, EFAS & SFAS Scores – Interpretation

The scores or rating is based on the strategic positioning & responsiveness of an organization with respect to its internal & external environment.

Better positioning of the organization will reflect in higher rating consequently.

• A score of 3 indicates average positioning meaning neither well nor poorly positioned organization & average responsiveness.

• A number higher than 3 would mean that the organization is doing well in terms of understanding & responding to internal as well as external strategic factors.

• A score of 4 or over 4 indicates superior & excellent positioning & responsiveness.

• A score of 5 indicates that the organization’s positioning as well as degree of responsiveness are outstanding.

Part 1

Business Overview


Business Snapshot


Market Cap Source: * Bloomberg based on no. of Shares outstanding .

Data Sources: SEC Filings, Company website, Financial Results.

John Deere & Co. - Key Numbers – In $ Million

Revenues Split by Key Business Segments

Founded: 1837

Headquartered: Moline, Illinois, United States

Employees: 67,044 as of December 31, 2013.

Business Segments :

• Agriculture & Turf

• Construction & Forestry

• Financial Services

•

Key Executives:

Samuel R. Allen: Chairman & CEO

Rajesh Kalathur : Senior Vice President & CFO

James M. Field: President, Agriculture & Turf Division –

Americas, Australia and Global Harvesting & Turf Platforms

John C. May: President, Agricultural Solutions & Chief

Information Officer (CIO)

Market Capitalization : USD 30.15 Billion as of October 16,

2014.

Ownership Structure: 66% stocks owned by Institutional &

Mutual Fund Owners. Vanguard Group Inc. held about 5.66% of

shares while the State Street Corporation owned 4.24% shares

in John Deere & Co. as of June 30, 2014.

Nov13-Jul14

Nov12-Jul13

Agriculture & Turf Equipment Segment – Snapshot


Source: Company website, SEC filings. Financial Results.

Note: Equipment Operations includes Agriculture & Turf and Construction & Forestry Segments

John Deere & Co. – Agriculture & Turf Division - Key Numbers – In $Million John Deere & Co. – Agriculture & Turf Division – Operating Margin Trend

John Deere & Co. – Asset Base Distribution by Segment John Deere & Co. – Equipment Operations – Revenues Split by Geographic

Regions

North America still

the Core Market &

plays an

Indispensable Role in

Revenues Generation

Nov13-Jul14

Nov12-Jul13

July 31, 2014 Total

Assets: $61.74 Billion

October 31, 2013

Total Assets: $59.52 Billion

Financial Snapshot - 2013


Source: Company website, SEC filings. Financial Results.

Note: Equipment Operations includes Agriculture & Turf and Construction & Forestry Segments

John Deere & Co. – Agriculture & Turf Division - Key Numbers – In $Million John Deere & Co. – Revenues Split by Key Business Segments

John Deere & Co. – R&D and Capital Expenditure – In $Billion John Deere & Co. – Agriculture & Turf Division – Key Numbers – In $Million

2013

2012

16.06% 14.45%

Operating

Margin


Part 1

IFAS, EFAS & SFAS Matrices

1.2


Internal Factor Analysis Summary(IFAS) Matrix


Internal Factors Weight Rating Weighted

Score Comments

Strengths

1.Diversified Business & Product Portfolio spread across

Agriculture, Construction & Forestry Equipment Segments. 0.15 4 0.60

JD has a strong & diversified product portfolio spread across Agriculture,

Construction & Forestry Segments besides its Fledgling Maintenance,

Repair, Overhaul & Aftermarket Business

2.Market Leadership in North America & Strong Profitability

of JD’s North America based Operations. 0.20 5 1.00

John Deere leads the industry in terms of profitability of its operations with

operating margin touching the 14.68% for the first three quarters of FY2014

as against 16% for the first three quarters of FY2013 & 14% for FY2012.

3.Significant Brand Equity & Extensive Global Geographic

Footprint, especially, for the Agriculture Equipment

Segment.

0.15 4 0.60

The company has strong brand equity, especially, in the North American

market with respect to Agriculture Equipment segment and has extensive

global geographic footprint.

4. Huge, significant Global Installed Machinery Base. 0.10 3 0.30

Deere & Company has significant global installed base of agriculture,

construction & forestry equipment providing steady revenue streams

originating from service & sustainment support.

0.60 2.50

Weaknesses

1.Faces Potential Market Concentration Risks. 0.10 4 0.40

JD derives the largest share of its revenues from the North American

market (61% for the first three quarters of FY2014, 64.5% for Q1-Q3

FY2013 & 62% for FY2012).

2.Lacks the Capability to Hedge Industry Cyclicality Trends

Effectively. 0.15 3 0.45

Lacks a strong & significant presence outside the agriculture equipment

segment (which generated about 75% for Q1-Q3 FY2014, 82% for FY2013

& 80% for FY2012) with the inadequate size & scale of construction &

forestry equipment segments to be able to effectively hedge against the

industry cyclicality trends in the agriculture equipment segment.

3.Low Profitability of International Operations. 0.15 3 0.45 Profitability of international operations(located outside North America) is

limited (8.26% for Q1-Q3 FY2013 & 4.41% for FY2012)

0.40 1.30

Total Scores 1 3.80

Note: Weight indicates the strategic significance of the factors for the company.

Rating refers to the perceived degree of average responsiveness of the company to

the respective factors on a scale of 1-5 with 1 representing the lowest.

External Factor Analysis Summary(EFAS) Matrix


External Factors Weight Rating Weighted

Score Comments

Opportunities

1.To Expand the share of revenues originating from

Emerging Markets over Medium to Long Term. 0.10 4 0.40

To effectively capitalize on the shifting global dynamics, leverage a strong

& suitable product portfolio with strong, long-term industry fundamentals

requiring global agriculture output to double itself through 2050.

2.Extension of existing Product Lines through Product

Innovations. 0.10 5 0.50

Hydraulic Excavators & High Horse Power Tractor Segments entail

significant Growth Potential.

3.To Leverage significant Operational, Financial & Resource

Synergies across Agriculture, Construction & Forestry

Equipment Segments for enhanced efficiency. 0.10 3 0.30

Scope to realize potential financial, operational & resource synergies

across agriculture, construction & forestry segments for enhanced cost

competitiveness, especially, across international markets.

4.Consolidation of Farm Sizes across Traditional Markets. 0.10 4 0.40

Provides significant growth avenues for larger machinery across traditional

markets entailing higher profitability for OEMs.

5.Development of New Products, Innovative Technologies to

Stimulate Potential Replacement Demand. 0.10 5 0.50

Driven by enhanced/innovative, new capabilities developed from scratch

offering enhanced operating economics & total cost of ownership for the

end user.

0.50 2.10

Threats

1.Plummeting of Crop Prices with Record Harvest to Impact

Equipment Sales significantly over Near Term. 0.15 4 0.60

Record harvest across NAFTA, EU & LATAM regions has led to a slide in

crop prices of-late which is impacting farm incomes & is likely to impact

agriculture machinery purchase decisions over near term.

2.Slowing down of World Economy with Stalling of EU

Economic Recovery & Difficult Economic Conditions across

Brazil & Russia. 0.10 3 0.30

Slowing down of world economy in general besides stalling of economic

recovery in the EU besides economic difficulties across Russia & Brazil to

impact capital goods sector over near term.

3.Sporadic Global Currency Exchange Rate Fluctuations &

Continued Strength of U.S. Dollar to Impact Profitability. 0.10 3 0.30

Sporadic fluctuations in the global currency exchange rates and the

continued strength of U.S. Dollar against most global currencies to impact

profitability with JD deriving about 60% of its revenues from North America.

4.Proposed Easing of Ethanol Mandates across NAFTA & EU

to Impact Corn Prices & Machinery Sales over Near Term. 0.15 3 0.45

Likely to impact corn crop dynamics significantly given a significant

increase in corn planting acreage over recent years with alteration of crop

planting patterns which has already led to oversupply issues.

0.50 1.65

Total Scores 1 3.75




Strategic Factor Analysis Summary(SFAS) Matrix


Strategic Factors Weight Rating Weighted Score Short Intermediate Long

S2 Market Leadership in North America & Strong Profitability of

JD’s North America based Operations. 0.15 5 0.75 X

S1 Diversified Business & Product Portfolio spread across

Agriculture, Construction & Forestry Segments. 0.10 4 0.40

X

X

X

0.25 1.15

W1 Potential Market Concentration Risks. 0.10 4 0.40 X X

W3 Low Profitability of International Operations. 0.10 3 0.30

X

0.20 0.70

O2 To Realize Potential Synergies across Business Segments. 0.10 3 0.30 X X

O5 Development of Innovation driven New Products &

Technologies. 0.10 5 0.50 X X

0.20 0.80

T1 Plummeting of Crop Prices to Impact Machinery Sales. 0.15 4 0.60 X

T2 Slowing Down of Global Economy & Proposed Easing of Ethanol

Mandates over Near Term. 0.10 3 0.30 X X

T3 Currency Exchange Rate Fluctuations & Continued Strength of

U.S. Dollar to Impact Profitability. 0.10 3 0.30 X

0.35 1.20

Total Score 1 3.85

Impact Duration

Note: The average score for organizations across industries is about 3. Higher scores reflect higher degree of organization’s responsiveness towards strategic factors & better strategic positioning.


Part 2

Business Overview

Business Snapshot

Founded: 1999 with the merger of New Holland N.V. & Case

Corporation. Further, the merger of Fiat Industrial S.p.A. & CNH

N.V. in September 2013 created CNH Industrial N.V.

Headquartered: Burr Ridge, IL (CNH Global N.V.)

Employees: About 71,192 as of December 31, 2013

Business Segments :

• Agriculture Equipment

• Construction Equipment

• Trucks & Commercial Vehicles

• Powertrain

• Financial Services

•

Market Capitalization : USD 10.44 Billion as of October 15, 2014 (for

ticker CNHI listed on New York Stock Exchange) & EUR 8.25 Billion for

the company’s listing on BrsaItaliana.

Shareholding Structure: CNH Industrial N.V. issued 1,348,867,772

common shares post merger with Fiat Industrial S.p.A. shareholders

receiving 1 newly allotted common share in CNH Industrial N.V. for

each ordinary share held in Fiat Industrial N.V. while CNH Global N.V.

shareholders received 3.828 newly allotted common shares in CNH

Industrial N.V. for each common share held by them in CNH Global

N.V. The CNH Industrial share began trading on NYSE & the MTA on

September 30, 2013.

Key Executives:

Sergio Marchionne: Chairman of the Board

Richard J. Tobin: Chief Executive Officer (CEO)

Massimiliano Chiara: Chief Financial Officer (CFO)

Source: Company website, Financial Results.

Note: Revenues split is based on revenues depicted under IFRS by the company & excludes eliminations.

Sales revenues for CNH Industrial stand at $16,652 for H1 2014 under IFRS. © Noealt Corporate Services. 2014. All Rights Reserved.

CNH Industrial N.V. - Key Numbers – In US$ Million – Under U.S. GAAP

CNH Industrial N.V. - Revenues Split by Key Business Segments

H1 2014

H1 2013

CNH Industrial N.V. – Financial Snapshot – Q1-Q3 2014


Source: Company website, Company Reports

Note: Financial Data based on U.S. GAAP

except Trading Profit which is in IFRS.

CNH Industrial N.V. - Key Numbers – In U.S. $ Million CNH Industrial N.V. – Revenues Split by Key Business Segments

CNH Industrial N.V. – Operating Margin by Business Segments CNH Industrial N.V. – Agriculture Equipment Segment – Key Numbers – In

U.S. $ Million

Q1-Q3 2014

Q1-Q3 2013

CNH Industrial N.V. – Agriculture Equipment – H1 2014



CNH Industrial N.V. – Agriculture Equipment Segment - Key Numbers –

In $ Million

CNH Industrial N.V. - Agriculture Equipment Segment - Operating Margin

Trend

CNH Industrial N.V. – Agriculture Equipment Segment - Revenues Split by Key

Geographic Markets

CNH Industrial N.V. – Agriculture Equipment Segment – Sales Growth Trend

by Key Global Markets & Regions

H1 2014

H1 2013

CNH Industrial N.V. – Financial Snapshot - 2013



CNH Industrial N.V. - Key Numbers – In EUR Million CNH Industrial N.V. – Revenues Split by Key Geographic Markets

CNH Industrial N.V. – Revenues Split by Key Business Segments CNH Industrial N.V. – Operating Margin Trend by Business Segments

2013

2012

2013

2012


Part 1


2.1


Internal Factor Analysis Summary (IFAS) Matrix



Score Comments

Strengths

1.Structural Balance & Diversification of CNH’s overall

Business Portfolio across Industries & Sectors. 0.15 4 0.60

CNH’s business portfolio is well diversified across industrial markets comprising

of Agriculture & Construction equipment, Commercial Vehicles & Powertrains.

2.Well-Developed Geographic Presence & Industrial

Footprint and Well-diversified revenue base distributed

across NAFTA & EMEA regions.

0.20 4 0.80 Bolsters profitability given & high profitability of the value driven wide body

aircraft segment.

3.Merger with Fiat Industrial has Reinforced & Expanded

CNH’s Financial, Technological & Resource Strength

Significantly.

0.20 4 0.80

Well-developed global footprint of CNH’s agriculture equipment business with

37 manufacturing facilities located across the globe supported by a strong

sales & distribution network operating across 170 countries. CNH’s overall

revenue base is well-diversified across key global markets with a good blend &

distribution of revenue base across traditional & emerging markets.

0.55 2.20

Weaknesses

1. Profitability of CNH’s Operations remains a Key Concern. 0.15 4 0.60

Needs further improvement in profitability of operations. CNH is undertaking

initiatives to align cost base & inventory position with market demand levels &

pursuit of Industrial & Functional Cost flexibility enhancement measures with

projections for an operating margin of 6.5%-6.9% for 2014 for industrial

activities. Operating margin for the Agriculture segment for Q3 2014 stood at

11.8%. Plans to double net income to $2.2 billion by 2018 with significant

investments towards expansion & market development across key Asian

economies.

2. Needs a more cohesive, synchronized & integrated

business approach as well as strategy for International

Operations.

0.15 3 0.45 Will provide the ability to leverage significant operational, financial, resource &

market synergies across group businesses that will enhance efficiency & bolster

overall profitability.

3. CNH’s current strategy of leveraging, specific regional

industrial hubs for production of specific product lines may

impact overall competitiveness amid difficult market

conditions.

0.15 3 0.45 May hamper cost base management ability over medium to long term despite

providing significant industrial flexibility & cost savings from a near term

perspective.

0.45 1.50

Total Scores 1 3.70




External Factor Analysis Summary (EFAS) Matrix



Score Comments

Opportunities

1.To leverage merger with Fiat Industrial as the catapult to

further strengthen & extend positioning & market share in

the global agriculture equipment market. 0.20 4 0.80

Merger with Fiat Industrial has strengthened CNH’s financial, technological

& resource strength tremendously & has provided the ability to hedge

industry cyclicality trends effectively.

2.To realize significant potential operational, financial,

resource & market synergies across agriculture,

construction equipment & commercial vehicle segments. 0.10 3 0.30

To bolster profitability by harnessing significant synergies across group

businesses effectively.

3.Deepening of local roots across emerging markets with

continued expansion & diversification of industrial footprint

to provide significant growth avenues over medium to long-

term with mechanization of agriculture sectors across

emerging markets. 0.15 4 0.60

Continued expansion of CNH’s geographic & industrial footprint across

emerging markets will enhance market positioning & provide the ability to

capitalize on potential growth opportunities effectively.

0.45 1.70

Threats

1.Record harvest & sliding of crop prices to impact new

machinery sales over near term, especially, for high

horsepower tractors & combines. 0.20 4 0.80

Record harvest across NAFTA, EU & LATAM regions has led to a slide in

crop prices of-late which is impacting farm incomes & is likely to impact

agriculture machinery purchase decisions over near term. CNH derived

over 70% of its revenues for 2013 from NAFTA & EMEA regions combined.

2.Strengthening of U.S. Dollar against most global currencies

to impact profitability.

0.10 3 0.30

The recent surge in U.S. Dollar against most global currencies is likely to

impact profitability of OEMs & competitiveness of exports amid visible

pressures on top line growth emanating from difficult market dynamics.

3. Increased competitiveness of Japanese OEMs in the U.S.

market with significant weakening of Japanese Yen against

the U.S. Dollar. 0.10 3 0.30

The softening of Japanese Yen against the U.S. Dollar has enhanced the

competitiveness of Japanese OEMs, especially, Kubota, which is likely to

lead to a significant increase in competitive intensity in the NAFTA market.

4. Proposed easing of Ethanol mandates across NAFTA &

EU regions to impact corn prices & machinery sales

significantly over near term. 0.15 4 0.60

May impact corn pricing & farm incomes adversely given continued supply

side easing with an increase in corn planting acreage across NAFTA, EU &

LATAM regions over recent years.

0.55 2.00

Total Scores 1 3.70




Strategic Factor Analysis Summary (SFAS) Matrix


Strategic Factors Weight Rating Weighted

Score Short Intermediate Long

S2 Well-developed geographic, industrial footprint & well-

diversified revenue base across key markets & regions. 0.15 4 0.60 X

X

X

S3 Merger with Fiat Industrial has reinforced & expanded CNH’s

financial, technological & resource strength significantly. 0.15 4 0.60

X

X

X

0.30 1.20

W1 Profitability of CNH’s Agriculture Equipment business. 0.10 4 0.40 X X

W2 Need for a more cohesive, synchronized & integrated

business approach as well as strategy. 0.10 3 0.30

X X

0.20 0.70

O1 To leverage merger with Fiat Industrial as the catapult to

further strengthen & extend positioning & market share in the

global agriculture equipment market. 0.15 4 0.60

X X

O2 Mechanization of Agriculture sector across emerging markets

for enhanced efficiency & crop yield over medium to long

term. 0.10 4 0.40

X X

X

0.25 1.00

T1 Record harvest & sliding of crop prices to impact new

machinery sales over near term, especially, across harvesting

& high horsepower row crop sectors across NAFTA & LATAM

regions through 2015. 0.15 3 0.45

X

T2 Proposed easing of Ethanol mandates across NAFTA & EU

regions to impact corn prices & machinery sales significantly

over near term. 0.10 3 0.30

X

X

0.25 0.75

Total Score 1 3.65

Impact Duration


Part 3

Business Overview


Business Snapshot

Founded : 1990

Headquartered : Duluth, Georgia, United States

Employees : 22,111 as of December 31, 2013

Business/Geographical Segments:

• North America

• South America

• Europe/Africa/Middle East

• Asia/Pacific

•

Market Capitalization: USD 4.19 Billion as of October 15, 2014

as against 5.39 Billion on January 21, 2014.

Shareholding Structure: About 92% of the shares are held by

Institutional & Mutual Fund investors. SouthernSun Asset

Management, Inc. held 5.35% of AGCO’s shares followed by

LSV Asset Management & Vanguard Group, Inc. who each

owned 5.29% of AGCO’s share capital as of June 30, 2014.

Key Executives:

Martin Richenhagen: Chairman, President & CEO

Andrew H Beck : Senior Vice President & CFO

Hans-Bernd Veltmaat : Chief Supply Chain Officer & Sr. VP

Gary L Collar : Senior VP, GM-Asia-Pacific Region


Market cap source: Bloomberg,.

Source: Company website, Annual Results.

AGCO Corporation - Key Numbers –In $ Million

AGCO Corporation - Revenues Split by Key Geographic Markets & Regions

H1 2014

H1 2013

Financial Snapshot – 1 – H1 2014



AGCO Corporation – Sales Growth Trend by Key Geographic Markets &

Regions – H1 2014 Vs. H1 2013 AGCO Corporation – Operating Margin for Key Geographic Markets

& Regions

Profitability of AGCO’s Asia-

Pacific based operations

remains an area of concern for

the company with continued

market development costs

being incurred in China.

Sales revenues originating from the South

American market for AGCO contracted by 21%

for H1 2014 with sugar producers facing

significant financial pressures & difficulties with

slide in sugar prices due to oversupply

impacting demand for agriculture equipment,

unfavorable currency exchange rate besides

delay in implementation of Government support

programs

AGCO Corporation – Operating & Net Profit Margin Trend AGCO Corporation – Sales & Operating Profit Growth

Significant growth in & sustained

profitability for AGCO Corporation

with operating margin staying over

the 8% level for 2013 & H1 2014

despite pressures on sales across

key geographic markets & regions

Financial Snapshot – 2 – Q1-Q3 2014 Vs. Q1-Q3 2013



AGCO Corporation – Key Numbers – In $Million AGCO Corporation – Revenues Split by Key Markets & Regions

AGCO Corporation – Sales Growth by Key Markets & Regions – Q1-Q3

2014 Vs. 1-Q3 2013

AGCO Corporation – Operating Margin for Key Geographic Markets

& Regions

Pressure on top line growth across all key markets

& regions with softening of crop prices impacting

demand for agriculture machinery. South America

registered the biggest decline with pressure on

sugar producers, unfavorable currency exchange

rate & delay in implementation of Government

financing programs in Brazil

Q1-Q3 2014

Q1-Q3 2013 Operating Margin: 7.33%

for Q1-Q3 2014 as against

8.87% for Q1-Q3 2013

Financial Snapshot – 2 – 2013



AGCO Corporation – Key Numbers – In $Million AGCO Corporation – Revenues Split by Key Product Segments

AGCO Corporation – R&D Expenditure Trend – In $Million AGCO Corporation – Revenues Split by Key Geographic Markets &

Regions

2013

AGCO’s R&D Expenditure has

grown at a CAGR of 16.44%

over the 2009-2013 period with

strong investment focus

towards new product &

technologies development

CAGR 16.4%

2013

Financial Snapshot - 3 – 2012 Vs. 2011



AGCO Corporation - Key Numbers - 2012

Operating & Net Profit Margin Trend Key Numbers - Growth Trends

AGCO Corporation - Revenues Split by Key Product Segments -

2012

2012

Working towards Improving

overall operating margin

driven by bid to improve

operating efficiencies, optimize

procurement & new product

development efforts. AGCO’s

Operating margin for Q2 2013

crossed the 10%mark & stood

at 9.25% for H1 2013


Part 1


3.1


Internal Factor Analysis Summary(IFAS) Matrix



Score Comments

Strengths

1.World’s Largest, Pure-play Manufacturer of Agriculture

Machinery. 0.10 4 0.40

Enables AGCO to establish strategic, long-term relationships with key clients &

the farming community and to focus on and work closely with the end-users with

respect to development of new and innovative products as well as solutions

2.Strong Market Presence & Significant Operating

Experience across Emerging Markets. 0.20 4 0.80

Has a strong market presence & significant operating experience across

emerging markets, especially, Latin America

3.Well-diversified Revenue Base Distributed evenly across

Key Geographic Markets & Regions. 0.15 3 0.45

AGCO has a well-diversified revenue base distributed evenly across traditional

as well as emerging markets. The company derived about 51% of its revenues

for 2013 from EMEA while it derived 25% of its revenues from North America &

19% from South America.

0.45 1.65

Weaknesses

1.Lacks a Significant & Substantial Industrial Presence

outside the Global Agriculture Machinery Industry. 0.15 3 0.45

Does not have any substantial or significant presence outside the Global

Agriculture industry. Thus, subject to significant industry concentration risks.

2.Limited overall Size & Scale of Operations and limited

Financial & Resource Strength from a Competitive

Standpoint.

0.15 3 0.45

AGCO has a relatively limited size and scale of operations when compared

against way larger industry competitors possessing significant financial as well

as resource strength & capabilities. AGCO’s key competitors, CNH & John

Deere, both have the competitive advantage of being able to leverage overall

size & scale of operations through their presence in agriculture, construction &

forestry equipment segments besides an extensive geographic footprint.

3.Derives a Major Proportion of Revenues from International

Markets. 0.15 3 0.45

AGCO derived about 75% of its annual revenues for 2013 from outside North

America and is thus exposed to significant currency fluctuation risks besides a

multitude of risks emanating from international regulatory frameworks, taxation,

economic conditions, political conditions/risks and regulatory policies.

4.Limited Market Presence & Low Profitability of Asia-Pacific

Operations. 0.10 3 0.30

AGCO derived a mere 5% of its revenues for 2013 from the Asia-Pacific region

with an operating margin of -2.31% for H1 2014 & -1.64% for Q1-Q3 2014.

0.55 1.65

Total Scores 1 3.30




External Factor Analysis Summary(EFAS) Matrix



Score Comments

Opportunities

1.Rapid Mechanization of Agriculture Sector across

Emerging Markets. 0.15 5 0.75

To further Deepen existing Roots across Emerging Markets with strong,

long-term industry fundamentals requiring rapid mechanization for global

agriculture output to double itself through 2050. Growth pursuits in Africa.

2.R&D driven New Product Development & Technological

Innovations to stimulate Replacement Demand. 0.10 4 0.40

Introduction of New Products featuring a range of cutting-edge

technologies & innovations to drive replacement demand over medium

term. Near term pressures on sales likely with decrease in farm incomes.

3.Growth Avenues for GSI Business with growing focus on

Grain Storage & Protein Production Systems. 0.15 3 0.45

Significant growth avenues for GSI with growing focus on grain storage &

protein production systems, especially, across emerging markets driven by

need for enhanced operating efficiency & an increase in protein

consumption .

0.40 1.60

Threats

1.Faces Threat to existing, Strong Market Positions across

Emerging Markets. 0.10 4 0.40

AGCO will need to defend its existing, strong market presence across

emerging markets aggressively with both John Deere & CNH making

significant, strategic investments towards deepening presence across

emerging markets under their aggressive global growth plans & strategies.

2.Sporadic Global Currency Exchange Rate Fluctuations &

Continued Strength of U.S. Dollar to Impact Profitability.

0.15 3 0.45

Continued strengthening of U.S. Dollar to impact profitability with over 75%

of AGCO’s revenues originating from outside North America.

3.Faces Stiff Competition from Larger & More Resourceful

Industry Competitors. 0.15 4 0.60

Increasing competitive intensity from Deere & Co. and CNH as they focus

on international diversification of industrial footprint leveraging significant

financial & resource strength and pursue growth opportunities outside

North America more aggressively. JD’s 2018 growth strategy focuses on

capabilities integration and rapid BRIC expansion to achieve a revenue

growth target of $50 billion through 2050. CNH, too, plans to invest

significantly towards expanding presence in Asia with plans to double

operating income to $2 billion by 2018.

4. Softening of Crop Prices to Impact Sales over Near Term. 0.20 4 0.80 Significant contraction in sales expected over near term.

0.60 2.25

Total Scores 1 3.85




Strategic Factor Analysis Summary(SFAS) Matrix




S2 Strong Market Presence & Operating Experience across

Emerging Markets. 0.10 5 0.50 X

X X

S1 Well-Diversified Revenue Base Distributed evenly across Key

Global Markets & Geographic Regions. 0.10 4 0.40

X

X

X

0.20 0.90

W1 Faces Industry Concentration Risks. 0.10 3 0.30 X X

W2 Limited Size, Scale of Operations and Limited Financial &

Resource Strength from a Competitive Standpoint. 0.10 3 0.30

X

0.20 0.60

O1 Rapid Mechanization of Agriculture Sector across Emerging

Markets. 0.15 5 0.75 X X X

O3 Growth Avenues for GSI Business. 0.10 4 0.40 X X

0.25 1.15

T1 Threat to existing, Strong Market Positions across Emerging

Market. 0.10 4 0.40 X X

T2 Currency Exchange Rate Fluctuations & Continued Strength of

U.S. Dollar. 0.10 3 0.30 X

T4 Softening of Crop Prices to Impact Sales significantly over Near

Term. 0.15 4 0.60 X

0.35 1.30

Total Score 1 3.95

Impact Duration



Part 4

CLAAS Group

Business Snapshot

Founded: 1913

Headquartered: Harsewinkel, Germany

Employees: 9697 as of December 31, 2013.

Business Segments:

• Agricultural Equipment

• Production Technology

• Industrial Engineering

•

Shareholding/Ownership Structure: CLAAS Group is a

privately held/family owned company.

Key Executives:

Lothar Kriszun: Speaker of the Executive Board wef October

01, 2014 with the retirement of Dr. Theo Freye

Thomas Böck: Technology & Quality wef October 01, 2014

post retirement of Dr. Hermann Garbers

Hans Lampert: Finance & Controlling

Jan-Hendrik Mohr: Sales

Lothar Kriszun: Tractors

Dr. Henry Puhl: Grain Harvest

Source: Company website, Financial results for 2013.


CLAAS Group - Key Numbers – In EUR Million

CLAAS Group - Revenue Split by Key Geographic Markets & Regions

2013

2012

CLAAS Group – Financial Snapshot



CLAAS Group – Key Growth Rates – 2013 Vs. 2012 EBIT Margin Trend

CLAAS Group – Revenues Growth for Key Geographic Markets & Regions CLAAS Group – R&D & CAPEX Growth Trends

Continued growth in R&D outlay &

CAPEX for CLAAS Group with

strong focus on new product &

technology development and

geographic expansion


Part 1


4.1





Score Comments

Strengths

1. Depth of Technological Capabilities which has been the

Group’s Real Backbone. 0.20 5 1.00

Depth of technological capabilities has been the group’s real backbone, a key

differentiator & significant source of competitive advantage with development of

a number of award winning technologies & products over recent years.

2. Strong Product Portfolio with availability of Products across

the entire Price & Performance Spectrum. 0.15 4 0.60

Strong product portfolio with availability of products across the price &

performance spectrum covering each strategic checkpoint effectively,

especially, in the combines segment. CLAAS group, in fact, is one of the very

few pure-play agriculture OEMs, which derives a larger proportion of its

revenues from combines instead of tractors.

3. Significant Heritage as well as Equity of CLAAS group

Branding across key European Agriculture Equipment

Markets.

0.15 4 0.60 CLAAS is well entrenched in the European market, especially, Western Europe,

which is also the group’s largest market contributing to about 64% of its

revenues for 2012.

0.50 2.20

Weaknesses

1. CLAAS is more of a Regional Player with Operational

Focus and Scope more or less limited to Continental

Europe at Present.

0.20 4 0.60

The group derived about 63% of its revenues from Western Europe for 2013

and about 22% of its revenues from Central & Eastern Europe, thereby, making

the total revenues originating from continental Europe to about 85% for 2013.

There is a significant scope to further diversify & extend the group’s existing footprint & presence across global markets.

2. Faces significant Limitations on account of the overall Size

& Scale of Operations from a Competitive Standpoint. 0.15 4 0.60

Faces significant limitations on account of the overall size & scale of operations

while competing against way larger, global competitors possessing tremendous

financial as well as resource strength, especially, with a disadvantageous ownership structure limiting access to capital.

3. Exposed to significant Industry Concentration Risks.

0.15 3 0.45

Lacks a presence outside the global agriculture equipment industry thereby

getting subjected to significant industry concentration risks.

prevail over medium term.

0.50 1.65

Total Scores 1 3.85







Score Comments

Opportunities

1.To Further Enhance Technological Innovation based

Product Differentiation which is proving to be a Significant

Source of Competitive Advantage. 0.20 5 0.75

The ongoing R&D activity & active pursuit of new platform & technology

development provides significant opportunities to further enhance technological

innovation based product differentiation proving to be a significant source of

competitive advantage as part of the overall technological innovation driven

business growth strategy.

2.To Grow & Evolve from being a Regional Player to an

Internationally Diversified group with the Expansion of

International Footprint outside Continental Europe. 0.15 4 0.60

The ongoing expansion of the group’s international footprint outside continental

Europe with the regional hub strategy provides significant avenues to grow &

evolve from being a regional player to become an internationally diversified

group providing a hedge against cyclicality in the European market besides

providing opportunities to capitalize on growth opportunities across emerging

markets more effectively.

3.To Expand Market Presence & Deepen Roots in China with

the Recent Acquisition of a key Chinese Agriculture

Machinery Manufacturer. 0.15 4 0.60

Acquisition of Shandong Jinyee Machinery Manufacture Co. Ltd. in China

provides significant avenues to expand market presence & deepen local roots

in the Chinese market.

0.50 1.95

Threats

1.Increasing Competitive Intensity across Emerging Markets

from Larger & More Resourceful Competitors. 0.15 4 0.60

Faces stiff competition from leading Global & Regional OEMs, especially,

across Emerging Markets with the players having outlined aggressive growth

plans & strategies.

2.Decline in Crop Prices to impact farm incomes & agriculture

machinery sales over near term significantly.

0.20 3 0.60

Sales of combines & high horsepower tractors are likely to be most impacted.

CLAAS group to be impacted significantly with its strong market presence &

positioning in the European Combines market. CLAAS group, in fact, is one of

the very few pure-play agriculture OEMs, which derives a larger proportion of its

sales revenues from combines instead of tractors.

3.Stalling of Economic recovery in EU & Proposed Easing of

Ethanol Mandates in EU over near term. 0.15 3 0.45

Slowing down of economic recovery in the EU and significant risks of further

decline in corn prices over near term from proposed easing of Ethanol

mandates which could lead to a further contraction in demand for agriculture machinery.

0.50 1.65

Total Scores 1 3.60








S1 Depth of Technological Capabilities. 0.15 5 0.75 X

X

S2 Strong, Diversified Product Portfolio with positioning of

Products across the entire Price & Performance Spectrum. 0.10 4 0.40

X

X

0.25 1.15

W1 CLAAS is more of a Regional Player with Limited Operational

Focus and Scope Concentrated within Continental Europe.

0.15 4 0.60

X X

W3 Exposed to significant Industry Concentration Risks. 0.10 3 0.30

X X X

0.25 0.90

O1 To Further Enhance Technological Innovation based Product

Differentiation. 0.10 4 0.40 X X

O2 To Evolve from being a Regional Player to an Internationally

Diversified group. 0.10 4 0.40

X X

X

0.20 0.80

T1 Decline in Crop Prices to Impact Agriculture Machinery sales

significantly over Near Term. 0.15 4 0.60 X X

T3 Stalling of Economic recovery in the EU & Proposed easing of

Ethanol mandates over Near Term. 0.15 3 0.45

X

X

0.30 1.05

Total Score 1 3.90

Impact Duration


Part 5

Business Overview


Business Snapshot

Founded: 1927

Headquartered: Treviglio, Italy

Employees: 3039 as of December 31, 2013

Key Brands:

• SAME

• Deutz-Fahr

• Lamborghini

• Hürlimann

• Grégoire

•

Ownership Structure:

SAME Deutz-Fahr Group S.p.A. is a privately held business

entity. The group, however, has a 8.44% equity stake in Deutz

A.G. and operates through a network of global subsidiaries.

Key Executives:

Vittorio Carozza: Chairman of the Board of Directors

Aldo Carozza: Vice Chairman

Francesco Carozza: Vice Chairman

Lodovico Bussolati: Chief Executive Officer

Andrea Paganelli: EVP & Managing Director ,SAME Deutz-

Fahr Deutschland GmbH




SAME Deutz-Fahr - Key Numbers –In EUR Million

Revenues Split by Key Product Segments

2013

2012




SDF Group – Revenues & EBIT Trend

SDF Group – Sales Revenues Split by Geographic Regions SDF Group - Key Numbers - Growth Trend

SDF Group – Key Numbers – Growth Trend

Improving Profitability of

Operations with a 80

basis points

improvement in

Operating Margin & a

0.78% improvement in

Net Profit Margin

SDF’s EBIT has grown at

60.3% CAGR over the

2010-2013 period while

Sales Revenues have

grown at 12.3% CAGR

2013

2012 SDF Group consistently

derives over 80% of its

annual revenues from the

EU zone posing significant

potential regional

concentration risks




SDF Group – Tractor Sales by Engine Power – Units – 2013 Vs. 2012

SDF Group – Tractor Sales Split by Brands – In Unit Terms SDF Group – Tractor Sales growth by Engine Power Segment –

2013 Vs. 2012

SDF Group – Tractor Sales Split by Engine Power – In Value Terms

Total

2013

Sales:

34,348

Units

Total

2013

Sales:

EUR 929

Million

Total

2012

Sales:

EUR 907

Million

Total

2012

Sales:

31,937

Units

2013

2012

Strong 43% sales growth registered in the

0-50 hp tractor segment followed by the

>200hp segment which registered a 76%

growth in unit sales

0-50 hp & >200 hp segments continue

to spearhead sales growth in volume

terms as well with 91.3% & 90%

growth respectively

Deutz-Fahr Brand at the Core of Business &

Gaining Further Significance. Expansion of

brand portfolio with the SHU-HE brand used

for tractors produced in the Chinese market


Part 1


5.1





Score Comments

Strengths

1. Very well entrenched in the EU market as a key regional

industry player. 0.20 4 0.80

Well entrenched as a leading regional player with strong market presence in the

EU market.

2. Strong Brand Portfolio comprising of a range of strong,

aboriginal brands with strong brand equity. 0.15 4 0.60

Possesses strong, aboriginal brands, namely Deutz-Fahr, Lamborghini, SAME,

Hürlimann & Grégoire possessing significant brand equity as well as heritage,

especially, in continental Europe.

3. Strong Technological, New Product Development &

Product Design Capabilities. 0.15 4 0.60

Significant technological capabilities through the existing strategic technolgoy

agreement with Deutz AG as showcased by the indigenous development of the

Continuous Variable Transmission(CVT) system for the mid-size tractors &

expansion of high horsepower tractor portfolio with the introduction of 9 series.

Additionally, strategic agreement with Giugiaro Design for product design has

transpired into a significant focus on aesthetics as well as functionality as

showcased by a number of prestigious awards won by SDF products of-late for

product design.

0.50 2.00

Weaknesses

1. Regional focus with the group deriving over 80% of its

revenues from Europe consistently. 0.20 4 0.80

The SDF group is a regional player with over 80% of the revenues originating

from within Europe consistently .

2. Limited Size & Scale of Operations as against Key Global

Industry Competitors. 0.15 3 0.45

SDF’s limited size & scale of operations limits the ability to compete effectively

with larger & way more resourceful industry competitors.

3. Low Profitability of Operations. 0.15 4 0.60 The operating margin has been improving over the years (6.85% for 2013) with

the implementation of efficiency enhancement measures, however, it is still

below industry average.

0.50 1.85

Total Scores 1 3.85







Score Comments

Opportunities

1. Strong, sustained Demand Growth projections for

Agriculture Machinery over Long Term. 0.20 4 0.80 Translates into significant growth avenues for SDF over long-term.

2. Mechanization of Agriculture Activity across Emerging

Markets. 0.15 4 0.60

Will drive demand for agriculture machinery over medium to long term and

translates into a growing share of global demand for machinery from

emerging markets.

3. To Grow & Evolve from being a Regional Player to an

Internationally Diversified group over Medium Term with a

Significant Expansion of International Footprint outside

Continental Europe. 0.15 4 0.60

Expansion of SDF’s industrial footprint & market presence globally with

specific focus on emerging markets aimed at capitalizing on growth

opportunities effectively.

0.50 2.00

Threats

1. Projections towards Decline in Global Demand for

Agriculture Machinery over Near Term with Plummeting of

Crop Prices. 0.20 3 0.60

Near term projections for farm incomes indicate towards contraction

through 2016 with declining of crop prices which translates into a significant

decline in global demand for tractors & combines over near term.

2. Proposed easing of Ethanol Mandates in the EU over Near

Term likely to impact Corn crop dynamics & equipment

sales directly.

0.15 3 0.45

To impact corn prices & demand for agriculture impact significantly as there

has already been a significant increase in crop planting acreages across

key geographic regions globally that has driven the record harvest for 2014

& the subsequent fall in corn prices.

3. Stalling of Economic Recovery in the EU. 0.15 3 0.45

May impact equipment financing, access to capital sources &

subsequently, sales of agriculture machinery.

0.50 1.50

Total Scores 1 3.50








S1 Market Positioning in the EU Market. 0.15 4 0.60 X

X X

S3 Strong Technological, New Product Development & Product

Design Capabilities. 0.10 4 0.40

X

X

0.25 1.00

W1 Regional Focus limited to EU. 0.10 4 0.40 X X

W3 Low Profitability of Operations. 0.15 4 0.60

X X

0.25 1.00

O1 Strong, sustained Demand Growth projections for Agriculture

Machinery over Long Term. 0.15 4 0.60 X X X

O2 Mechanization of Agriculture Activity across Emerging

Markets. 0.10 4 0.40

X X

X

0.25 1.00

T1 Projections towards Decline in Global Demand for Agriculture

Machinery over Near Term with Plummeting of Crop Prices. 0.15 3 0.45 X

T2 Stalling of Economic Recovery in the EU. 0.10 3 0.30

X

0.25 0.75

Total Score 1 3.75

Impact Duration


Part 6

Business Overview


Business Snapshot

Founded: 1890

Headquartered: Osaka, Japan

Employees: 33,845 as of March 31, 2014.

Key Business Segments:

• Farm & Industrial Machinery

• Water & Environment

•

Market Capitalization: JPY 1909.7 billion as of October 16, 2014.

Shareholding Structure: About 39,117 shareholders hold over

1.25 billion shares of Kubota Corporation. About 49.5% of the

Kubota shares are owned by Japanese institutions while 36.37%

of stocks are held by foreign institutional holders. The Master Trust

Bank of Japan, Ltd. (Trust Account) is the largest shareholder in

Kubota Corporation owning 9.11% shares as of March 31, 2014

followed by Nippon Life Insurance Company that held 5.53% of

Kubota’s shares.

Key Executives:

Masatoshi Kimata: President & Representative Director

Toshihiro Kubo: Representative Director & EVP

Shigeru Kimura: Director & Senior Managing Executive Officer

Kenshiro Ogawa: Director & Senior Managing Executive Officer

Yuichi Kitao: Director, Managing Executive Officer & GM-Farm &

Utility Machinery Division




Note: FY2014 refers to April 01, 2013 to March 31, 2014 Period.

Kubota Corporation - Key Numbers –In JPY Million

Revenues Split by Key Business Segments – FY2014

FY2014 Total

Revenues: JPY 1508.6

Billion

Kubota – Farm & Industrial Machinery Segment – Snapshot - 1



Kubota Corporation – Farm & Industrial Machinery - Revenues & Operating

Income - In JPY Billion

Kubota Corporation – Farm & Industrial Machinery Segment – Operating Margin

Trend

Kubota Corporation – Farm & Industrial Machinery Segment - Revenues

from International Markets

Kubota Corporation – Farm & Industrial Machinery Segment - Revenues

Split by Key Sub-Segments

FY 2014

FY 2013 Revenues

Growth

+29.2%

Profitability

Growth

+69.15%

A 400bps improvement in

Kubota’s operating margin for

the Farm & Industrial

Machinery segment for

FY2014 boosted by

significant weakening of Yen

against the U.S. Dollar

Growth in Revenues

Originating from

International Markets as

Part of Kubota’s Overall

Strategy

Spike in sales growth in

Japan driven by

purchases made before

the consumption tax hike

& agriculture related

supplemental budget. NA

growth driven by

expansion of product line

& continued economic

recovery

Kubota – Financial Snapshot – 2 – FY2014



Kubota Corporation – Revenues Split by Key Geographic Markets & Regions

Kubota Corporation – Operating & Net Profit Margin Trend Kubota Corporation – Sales Revenues Growth Trend for Key Geographic

Markets & Regions

Kubota Corporation – Revenues from International Markets

FY 2014

FY 2013

Significant improvement in

profitability for Kubota for FY2014

with a 340bps improvement in

operating margin & a 230bps

improvement in net margin driven

by significant sales growth globally

& the effects of significant

depreciation of Yen against the US

Dollar.

Kubota’s share of revenues

originating from

international markets has

been growing steadily as

per the company’s

underlying plans

Kubota has been able to

register tremendous growth

rates across all its key

markets, especially, NA,

Europe & Asia despite difficult

market conditions supported by

Yen’s weakness against the

USD enhancing

competitiveness of Kubota’s

products. NA growth driven by

introduction of new product

lines & economic recovery.

Kubota – Financial Snapshot – 3 – Q1 FY2015



Kubota Corporation – Key Numbers – In JPY Million – Q1 FY2015

Kubota Corporation – Farm & Industrial Machinery Segment – Key Numbers –

In JPY Million

Kubota Corporation – Sales Revenues Split by Key Geographic Markets &

Regions

Kubota Corporation – Revenues Split by Segments – Q1 FY2015

Q1 FY 2015

Q1 FY 2014

Q1 FY 2015

Q1 FY 2014

Kubota – Financial Snapshot – 4 – H1 FY2015



Kubota Corporation – Key Numbers – In JPY Million – H1 FY2015

Kubota – Farm & Industrial Machinery Segment – Operating Margin Trend Kubota Corporation – Sales Revenues Growth for Key Geographic Markets

& Regions

Kubota Corporation – Farm Equipment & Engines - Revenues Split by

Markets – H1 FY2015

H1 FY 2015

H1 FY 2014

Revenues from Japan contracted by 22%

with the Consumption Tax hike in prior

fiscal year while revenues from

international markets grew by 7.8% with

continued demand growth across North

America driven by economic recovery &

introduction of new product lineup while

European sales grew with strong demand

in the U.K..

Pressure on profitability for

Kubota for Jul-Sept 2014 quarter

with contraction of sales growth

in Japan despite a favourable

Yen-USD impact & strong sales

growth across North America &

Europe


Part 1


6.1





Score Comments

Strengths

1. Well-entrenched in & has a strong presence as well as

brand equity across Key Asian markets. 0.20 4 0.80

Kubota has a strong market presence across key Asian markets, namely,

Japan, China, Thailand & Indonesia with significant market shares driven &

spearheaded by rice cultivation segment.

2. Strong & High Profitability of Operations with Operating

Margin standing at 17% for FY2014. 0.20 4 0.80

Has been able to maintain & sustain a high level of profitability aided by the

favorable JPY-USD equation which has enabled Kubota to invest significantly

towards R&D, new product development & global expansion.

3. Strong Positioning & Leadership of the North American

Sub-Compact Tractor Market. 0.10 4 0.40

Kubota has virtual leadership of the North American market for sub-compact

tractors in the 30hp-50hp segment which has enabled the company to establish

a significant presence in North America.

0.50 2.00

Weaknesses

1. Potential Concentration Risks with Kubota deriving over

61% of its sales revenues from Asia consistently. 0.15 4 0.60

Potential emergence of concentration risks with Kubota consistently deriving

over 60% of its sales revenues from Asia albeit plans to expand presence

across North America & EU markets rapidly.

2. Lacks the ability to hedge industry cyclicality trends

effectively with a limited presence outside the agriculture

equipment industry.

0.15 3 0.45

Kubota lacks a sizeable & significant presence outside the global agriculture

industry with the farm & industrial machinery segment comprising over 76% of

Kubota’s revenues for FY2014. The company, thus, lacks the capability to

hedge industry cyclicality trends effectively.

3. Concentration of industrial footprint & centralization of key

functions within Japan. 0.10 4 0.40

A significant proportion of Kubota’s total annual production capacity & asset

base is based in Japan along-with a number of other key, centralized functions

which increases the risks from natural disasters while limiting the overall pace of

responsiveness, decision-making, flexibility & customization as well as

alignment of approach with local market requirements.

4. Exposed to significant currency exchange rate fluctuations

with over 55% of revenues originating from outside Japan. 0.10 4 0.40

Kubota is exposed to significant currency exchange rate fluctuations, especially,

the JPY-USD exchange rate equation with over 58% of revenues originating

from outside Japan consistently.

0.50 1.85

Total Scores 1 3.85







Score Comments

Opportunities

1.Rapid mechanization of agriculture activity across key

emerging markets based in Asia. 0.20 4 0.80

Emerging markets based in Asia are investing significantly towards

mechanization of their agriculture sectors for enhanced efficiency & crop

yield to meet significant, projected growth in food demand over long term

presenting significant growth opportunities for Kubota. Additionally, plans to

accelerate business development for upland farming across key Asian

markets to open significant growth avenues over medium to long term.

2.Recent surge in U.S. Dollar against Japanese Yen has

enhanced Kubota’s competitiveness in the North American

market. 0.15 4 0.60

The weakness of Japanese Yen against the USD, which is at a 6 year low,

has enhanced competitiveness of Kubota’s products in the North American

market and has bolstered profitability of operations which could be

leveraged to further expand market presence in North America.

3.Continued, strong activity in the dairy & livestock sectors

provides growth opportunities with Kubota’s strong product

positioning & leadership of the North American market for

sub-compact tractors. 0.15 4 0.60

Continued activity & growth in the dairy & livestock sectors present

significant opportunity to further consolidate presence in the North

American market for sub-compact tractors.

0.50 2.00

Threats

1.Projections for significant decline in farm income across

NAFTA, EU & LATAM regions to impact agriculture

machinery sales over near term. 0.20 4 0.80

Recent decline in crop prices emanating from record harvest across key

geographic regions is likely to impact agriculture machinery sales over near

term.

2.Plans by key industry OEMs to expand presence in the

Asia-Pacific region to increase competitive intensity

significantly.

0.15 3 0.45

Plans by key industry OEMs to expand market presence in the Asia-Pacific

region is likely to increase competitive intensity significantly & pose a threat

to Kubota’s market shares in the region.

3.Faces constant threat to profitability emanating from USD-

JPY exchange rate equation with over 58% of Kubota’s

revenues for FY2014 originating from outside Japan. 0.15 4 0.60

Faces constant threat to profitability with over 58% of sales revenues

originating from international markets exposed to the USD-JPY exchange

rate equation.

0.50 1.85

Total Scores 1 3.85








S1 Well entrenched across Key Asian Markets with strong brand

equity. 0.15 4 0.60 X

X

S2 Strong & High Profitability of Kubota’s Operations. 0.15 5 0.75

X

X

0.30 1.35

W1 Potential Market Concentration Risks. 0.10 4 0.40 X X

W2 Lacks the ability to hedge industry cyclicality trends

effectively. 0.10 3 0.30

X X

0.20 0.70

O1 Mechanization of agriculture activity across key Asian

markets 0.15 4 0.60 X X X

O2 Recent surge in U.S. Dollar against Yen has bolstered

Kubota’s competitiveness & profitability of operations. 0.15 4 0.60 X

0.30 1.20

T1 Projected decline in farm incomes across NAFTA, EU &

LATAM regions to impact machinery sales over near term. 0.10 4 0.40 X

T2 Expansion plans by key industry OEMs for Asian markets to

increase competitive intensity significantly. 0.10 3 0.30

X

X

0.20 0.70

Total Score 1 3.95

Impact Duration


Relative SFAS Scores – Ranking based on Total SFAS Scores


Ranking of Companies Total SFAS

Score

1. AGCO Corporation 3.95

2. Kubota Corporation 3.95

3. CLAAS Group 3.90

4. John Deere & Co. 3.85

5. SAME Deutz-Fahr Group 3.75

6. CNH Industrial N.V. 3.65

Note: SFAS scores are a factor of each company’s strategic positioning & its favorability as well as alignment with prevailing & emerging market dynamics and the degree of strategic responsiveness. The scores, thus, indicate towards the overall mix of strategic positioning & responsiveness.


Findings, Analysis & Outlook

1. The SFAS scores for industry players range between 3.65 to 3.95 indicating that the 6 industry OEMs are positioned relatively close to each other.

2. Regional & pure-play agriculture industry players, namely, AGCO, Kubota & CLAAS have scored higher than global players, namely, John Deere & CNH with their higher

degree of strategic responsiveness to internal & external environmental factors & nimble strategic management.

3. AGCO & Kubota jointly lead the list of OEMs with each garnering a score 3.95. AGCO’s pursuit of technological innovations, especially, the integration & incorporation of

technological innovations onto its product portfolio at an early stage and the latest bid towards deeper integration & interconnectivity across equipment under Fuse Technology

initiative as part of AGCO’s Global Precision Farming Strategy clearly reflect a high degree of anticipation & responsiveness . Additionally, AGCO’s proactive establishment of

strong market presence across emerging markets & the recent pursuit of African growth strategy as a key strategic initiative that aims to transform the agriculture sector in

Africa in collaboration with local farming community further proves the point. Kubota, on the other hand, is positioned favorably with a strong presence across a number of

emerging markets based in the Asia-Pacific region which are poised to invest significantly towards mechanization of agriculture activity over medium to long term. Additionally,

Kubota holds a sizeable presence across North America & EU markets & is working towards expanding presence along with diversification of its industrial footprint across

these markets, especially, with plans to establish a new production facility for high horsepower tractors based in France which is likely to become operational from April 2015.

Additionally, Kubota has effectively harnessed the Yen-USD exchange rate equation to derive top line growth bolster profitability over recent years. Further, Kubota has a

diversified exposure to a range of crops across regions & markets with plans to further expand presence to upland farming across emerging markets over medium term which

will enable the company to protect its profitability amid difficult market conditions and open significant growth avenues over medium to long term.

4. The industry outlook over long-term remains robust with strong, long-term industry growth drivers & fundamentals for the global agriculture industry linked directly to a rapidly

growing global population which necessitate a doubling of global food production output by 2050 to match the rate of demand & global population growth. However, the

industry faces significant pressures over short term emanating from an altered supply side economics with projected, record crop production for 2014 across key geographic

regions impacting crop prices & farm incomes directly & significantly which is likely to have a significant bearing on agriculture machinery sales over near term. The Global

Agriculture Industry faces significant, near term pressures emanating from record harvest for corn & soyabean across North America, Europe & Latin America regions in 2014

that have plummeted crop prices & have subsequently impacted farm incomes and ultimately demand & purchase decisions for agriculture machinery. The net farm income in

the U.S. is projected to contract by 14% for 2014 (113.2 billion as per USDA & 111.6 billion as per IHS Global Insight) and decline further to 97.3 billion & 94.4 billion for 2015

& 2016 respectively as per projections by IHS Global Insight. The global demand for tractors is projected to remain flat in 2015 while the demand for combines is projected to

contract by 10%-15% in 2015.

5. Further, recent surge in U.S. Dollar against most key global currencies, significant increase in corn planting acreage across key regions globally, ongoing correction in farm

land prices in the U.S. & proposed easing of existing ethanol fuel mandates across the U.S. & EU over near term paint a grim picture for the industry over near term despite

strong, long-term fundamentals & demand drivers.


Part 7

Key Industry Trends

Key Industry Trends - 1

Traditional Markets Still

Making a Recovery from the

Global Economic Crisis

The world economy, especially, traditional markets, have been making a steady recovery from the global economic crisis with

continued improvements for 2013 & a continued, confirmed upward trend through the first half of 2014 albeit slowing down of the

overall growth rate. The U.S. economy made a strong comeback in Q2 2014 after an unexpected contraction in Q1 2014.

The EU economy continues on its recovery path, however, the rate of growth has been moderate & asymmetric across regions &

states. However, the growth across most EU economies, France, Germany & Italy, seems to be slowing down considerably with

mounting debt levels & a limited scope left for fiscal policy interventions. Amongst emerging markets, the Chinese economy continues

to spearhead growth. However, other emerging markets, especially, Brazil & Russia are witnessing difficult economic situations with

Western sanctions on Russia post the Ukraine crisis impacting the country’s economy significantly. Additionally, the U.S. Dollar, which

is on a 4 year high, continues with its strength against most global currencies In the U.S. which could make profitability a concern for

machinery exports & farm exports from the United States given the fact that the U.S. is the world’s biggest agricultural exporter. The

housing starts have been strong so far in 2014, which are likely to touch 1.18 million for 2014 as per projections and thus augur well

for the economy overall. Additionally, significant increase in political risks as highlighted by the state of affairs in the Middle East & the

potential risks of escalation of the ongoing Ukraine crisis remains a key concern for the world economy. Still, the impact of these

global events on the industry has more or less been limited so far and a further deterioration in global macroeconomic environment

could have an unfavorable impact.

Strong, Long-Term Industry

Fundamentals & Growth

Drivers for Agriculture

Activity Globally

The global agriculture equipment industry is driven by strong, long-term industry fundamentals with the global agricultural

output required to double itself by 2050, in order, to match the rate of global population growth. Additionally, diminishing

natural resources make the need for precision farming more urgent, especially, across emerging markets where the

agricultural efficiency & yield needs to be increased significantly to meet growing food demand with a rapidly growing

population thereby further necessitating the role of mechanization of agriculture sectors across these markets. The agriculture

industry, thus, has strong fundamentals besides multiple, long-term strong growth drivers.

Significant Decline in Crop

Prices Impacting Profitability

across North America & EU

The crop prices for key agriculture commodities, namely, Corn, Soyaben & Wheat; have softened significantly of-late across the U.S.,

EU & Latin American markets with easing of supply side driven by record farm produce across these markets which threatens to

impact farm income across markets. In the U.S., the farm incomes are projected to contract by 14% to $113.2 billion for 2014, as per

projections by the U.S. Department of Agriculture, as against the record level of $131.3 billion for 2013 impacted by the drop in crop

prices with oversupply, increase in production costs & reduced government subsidies as per the latest farm bill. The combination of

these forces is also projected to drive a correction in farmland prices over near term which have been soaring registering a 8% growth

between 2013 & 2014. The debt to assets ratio across farms in the U.S. is projected to stay at historically low levels of 10.8% for 2014

as per projections by the U.S. Department of Agriculture. The corn prices in the U.S. alone have contracted significantly(20% since

last year to a 4 year low) from the highs of $7-$8 per bushel level for the 2006-2012 period, which were driven by strong biofuels

demand & adverse weather conditions globally, to the $3-$4 per bushel range in 2014 with a significant increase in plantation acreage

across North America, Latin America & the EU & a record produce. Corn production in the U.S. is projected to touch an all time high of

14 billion bushels for 2014 as against 13.93 billion bushels in 2013. Additionally, corn prices face further significant risks of plummeting

with the U.S. Government proposing plans to cut down on the existing ethanol fuel mandate, which has been a key driver of demand &

surge in corn prices over the recent years with an attribution factor of over 3 billion corn bushels, in term of demand, since 2006. The

slide in crop prices is likely to impact the agriculture equipment manufacturers equally severely.



Key Global OEMs

Strengthening & Deepening

Presence across Emerging

Markets

Almost, all key global OEMs are making significant investments towards strengthening & deepening local roots across emerging

markets via organic as well as inorganic routes, especially, China, Latin America, Africa & India anticipating strong growth over the

medium term for agriculture equipment segment with increasing emphasis on mechanization with a shift in focus away from

unproductive labor intensive methods across these markets for agriculture activity with enhancing efficiency as well as productivity

becoming key priorities as the number of farms continues to increase. Deere & Company has embarked on an ambitious plan to

significantly build up production capacity across emerging markets as part of its plan to derive further business growth and reach its

target of achieving $50 billion in mid-cycle sales by 2018. As part of the plan, Deere & Company is setting up 7 new manufacturing

facilities across emerging markets, including, 3 new facilities based in China for large farm machinery, engines & construction

equipment; 2 in Brazil; 1 located in India for farm tractors and 1 in Russia for producing seeding, tillage & application equipment.

Further John Deere has increased tractor production capacity by 10% at its Waterloo, Iowa based plant and has expanded production

capacity for hydraulic cylinders at its Moline, IL plant. CNH, too, has set up a manufacturing facility in Russia for assembly of

combines while it expanded its presence in Central Asia with the opening of second tractor production facility in mid-2014, opened its

new industrial manufacturing complex in China and is setting up a new production facility in Argentina for combines & harvesters in

Latin America. AGCO’s core focus so far has been the African market where it opened a new tractor manufacturing facility based at

Algeria through a JV besides investing about $100 million towards development of distribution infrastructure & training sites.

Emerging Markets to

Spearhead Demand for

Agriculture Equipment

through 2016

The global demand for agriculture equipment is likely to grow to $175 billion through 2016 at an average growth rate of 6.8

Percent with about 49% of the demand likely to originate from the Asia-Pacific region, as per a study by the Freedonia group. Key

industry growth drivers will primarily be the demand growth in emerging markets, especially, China, Brazil, and India, with these

nations focusing on mechanization of their agriculture sectors driven by rapid population expansion and strong economic Growth

exerting pressure on their agricultural sectors to become more efficient and productive, that is likely to lead to a significant growth in

agricultural machinery sales. China is projected to overtake the United States & become the largest producer of agriculture equipment

by 2016 with the industry demand projected to grow at 10.8% through 2015 to reach 225 billion yuan with farm tractors as the largest

product segment.




Future of Industry to be

Shaped by Technology

The landscape of the global agriculture equipment industry has been changing rapidly with technological evolutions at the forefront

of shaping it. The technological innovations continue to work relentlessly to enhance various aspects of functionality & the key

technological trends currently shaping the future of industry include:

• Alternate Fuel Based Drivetrain Technologies: Development & production of highly fuel efficient as well as eco-friendly

engines incorporating path-breaking, alternative fuel-based drive-train technologies powered by a range of Bio-fuels, Fuel-cells

and Electric technologies aimed at lowering the total ownership as well as operating costs, in view, of the global oil prices

continuing to be uncertain & staying towards the higher side.

• Integration of ICT Technologies: Incorporation of a host of ICT(Information & Communications) technologies aimed at

enhancing operating efficiency as well as performance. John Deere’s Remote Display Access is based on the same strategy &

the company plans to extend the scope of technological intensiveness of its equipment further in the near to medium term.

• Material Science Innovations: Incorporation of a lighter metals, especially, Aluminum & Magnesium is finding greater

prevalence in the industry of-late aimed at reducing the equipment weight for enhanced fuel efficiency while maintaining the metal

strength, especially, in wake of the recent softening of the global commodity prices. Further, alternate materials, like

CFRP(Carbon Fiber Reinforced Plastics/Polymer), offer way higher strength as well as other performance characteristics,

including, dimensional stability, stiffness, fatigue strength & corrosion resistance while being way lighter than steel

simultaneously, thereby, reducing the overall equipment weight leading to a direct impact on the overall operating costs. The

development & subsequent, tremendous success of the CFRP material in the global defense & aerospace industry; now being

followed by the increasing usage across the automotive industry over upcoming vehicle platforms is likely to drive down the costs

further with the set up of scalable production facilities presently underway. CFRP may find its roots in the agriculture equipment

industry as well over medium term.

• Usage of Integrated Electronics or CANbus for engine power management & headland management

• Research on Tractor Power Management with ongoing research on the role & the potential applications of harnessing

hydraulic and electric power towards enhancing efficiency of tractor implement system.

• Improving Tire Technology with the development of new radial tires by Michelin, Firestone & CLAAS providing improved

traction & capable of carrying more payload with minimal soil compaction.


Part 8

Key Issues, Risk Factors & Challenges

Key Issues, Challenges & Potential Risk Factors - 1

OEMs Need to Expand

Manufacturing Footprint

across Emerging Markets

Rapidly in-line with

Emerging Industry

Dynamics

The most crucial challenge associated with the ongoing shift in the global agriculture equipment industry towards emerging markets is

the need for all global OEMs to establish and expand their overall manufacturing footprint across emerging markets rapidly, in order, to

capitalize on emerging growth opportunities effectively as cost competitiveness is one of the most important factors for succeeding

across these markets requiring durable & reliable equipment at an affordable price tag. The OEMs need a significant industrial base

across these markets for cost competitiveness & for ensuring cost effectiveness through a high degree of component localization. The

process of operating across international markets requires a significant operating experience, market know-how, investments and a

considerable risk appetite, especially, when compounded with a short time-frame. The European players, in this regard, are likely to

have a slight advantage over their American counterparts with international exports being an integral part of their operations

traditionally & a key focus area on account of the limited size of their domestic economies thereby rendering significant market know-

how & operating experience besides established ties & relationships.

Oversupply Driven Slide in

Crop Prices to Impact

Industry OEMs Significantly

Significant slide in crop prices of-late driven by oversupply is likely to impact farm incomes significantly with the U.S. market

estimated to register a 14% contraction in farm incomes for 2014 as per projections by the U.S. Department of Agriculture. Corn

prices, especially, have come down to the $3-$4 range in 2014 with oversupply driving a slide in corn prices as against the $7-$8

level for the 2006-2012 period which drove a significant increase in planting acreage for corn across North America, Europe & Latin

America regions. For most North American OEMs, especially, John Deere & AGCO, the stock performance have traditionally been

closely linked to the prevailing corn price trend and with corn prices heading southwards, the stock prices for these players have

already shown signs of weakness along with pressures on top line & profitability. The impact is going to be especially severe for pure

play agriculture equipment manufacturers like AGCO & CLAAS. AGCO cut its sales forecast for the year 2014 as part of its H1 2014

results to $10.1-$10.3 billion as against $10.8-$11 billion originally marking a first ever decline in sales in over 5 years. AGCO

projects a significant 20% contraction in its Latin America sales for 2014 as sugar producers struggle with financial pressures from

low sugar prices while it projects EU sales to contract by 5%-10% with softening of demand for agriculture machinery emanating from

slump in crop prices as crop production levels for 2014 are anticipated to touch record highs across North & South America and

Europe. North American market leader, John Deere, too has been impacted significantly with the company forecasting a 10% decline

in sales revenues for farm & turf segment for 2014 with weak commodity prices driving down farm incomes. John Deere announced

plans in August 2014 to layoff over 1000 workers across its Tractor production facilities based in Waterloo, Ankeny & Quad Cities to

align cost base with the market demand level.


Key Issues, Challenges & Potential Risk Factors - 2

Global Currency

Fluctuations Impacting

Competitiveness,

Profitability & Economic

Recovery

Sporadic, recent global currency movements & fluctuations have been impacting profitability across almost all key industry players.

The U.S. Dollar continues to maintain its strength against most global currencies having risen by over 7% against most global

currencies since May 2014 and is on a 4 year high level driven by strong performance of the U.S. economy while most other global

economies slow down and an anticipated monetary policy intervention in the U.S. with an increase in interest rates by the Fed. The

U.S. Dollar has strengthened by over 8.5% against Euro between July 1st & mid-October 2014. The continued strengthening of the

U.S. Dollar is likely to put significant pressure on profitability for U.S. based industry OEMs. Additionally, the continued strength of

USD is likely to impact competitiveness of U.S. farm exports given the fact that U.S. is the world’s largest agricultural exporter.

The recent drop in Japanese Yen against the U.S. Dollar, with the Japanese Yen at a 6 year low level against the USD (110.09 yen

per Dollar as of Oct 01 2014), as of early October 2014, is likely to benefit Japanese machinery manufacturers considerably making

their products more competitive in the international markets. The continued & sustained weakening of the Japanese Yen against the

USD may also trigger a potential Chinese response with respect to a commensurate weakening of the Chinese Yuan to maintain

exports competitiveness & parity with the Yen which is likely to lead to enhanced competitiveness & surge of Chinese & Japanese

exports to the EU & the U.S. markets and is likely to significantly impact economic growth & job creation across the EU & the U.S.

economies which are already facing significant risks of deflation.



Part 9

Force Field Analysis

Force Field Analysis – Global Agriculture Equipment Industry


Driving Forces

Restraining Forces

Strong Long-Term

Demand Drivers &

Industry Fundamentals

driven by Growing World

Population

Technological

Developments &

Innovation Driving

Down Overall Operating

& Ownership Costs

Supportive Low Interest

Rate Environment ,

especially, in the U.S.

Market which likely to

Continue through 2014 &

early 2015

Recovery in EU Meat

Production over Near

Term after 2 Years of

Low Supplies as per

Projections by the

European Commission

Increasing Need for

enhanced Efficiency &

Crop Yield across

Emerging Markets

Driving Increasing Need

for Mechanization

Sporadic Global Currency

Exchange Rate

Fluctuations & Continued

Strengthening of U.S.

Dollar Impacting U.S.

Exports & Putting

Pressure on Profitability

Emerging Economies

Battling Inflationary

Pressures & Witness

Slowing Down of

Growth Rate

Uncertain & Difficult

Macro Environment

across Europe & NA

Marked by Slow

Economic Recovery and

Rising State Debt Levels

& Deficits

Softening of Crop

Prices with Record

Crop Production

across Key Regions

Impacting Farm

Incomes

Proposed Plans by the

U.S. Government to

Reduce Ethanol

Mandate to Impact

Corn Crop Dynamics

Significantly

Plummeting of Sugar

Prices in South

America due to

Oversupply Impacting

Producers & Demand

for New Agriculture

Equipment

Note: The color coding & height of the arrows indicates towards relative strength of each active force in respective direction.

Strong

Medium

Weak

Strong

Medium

Weak

Increasing Farm Sizes

across Traditional Markets

Driving Demand for Larger

Agriculture Machinery

About Noealt Corporate Services

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