01—Abstract
Summary
Summary of the 10-K filed December 18, 2017. Cited figures are marked; the original filing is the authoritative source.
Deere & Company's 2017 10-K filing reveals a robust year characterized by significant revenue growth and improved profitability across its equipment operations.
The company reported a 12% increase in worldwide net sales and revenues, reaching $29.7 billiona, driven by a 11% rise in equipment operations sales. Net income attributable to Deere & Company surged by 42% to $2.16 billion, or $6.68 per diluted share, reflecting strong performance in both Agriculture & Turf and Construction & Forestry segments. A major strategic development during the year was the completion of the acquisition of the Wirtgen Group in December 2017, positioning Deere as a leading manufacturer in the global road construction equipment market.
This acquisition is expected to contribute significantly to future sales and profitability. Looking ahead, Deere projects continued sales growth for fiscal year 2018, driven by anticipated improvements in agricultural and construction markets, further bolstered by the Wirtgen integration.
02—Key points
Key Highlights
- Worldwide net sales and revenues increased by 12% to $29.7 billion in 2017.
- Net income attributable to Deere & Company increased by 42% to $2.16 billion ($6.68 per diluted share).
- Acquisition of Wirtgen Group completed, significantly expanding construction equipment offerings.
- Agriculture and Turf segment operating profit increased 46% to $2.48 billion.
- Construction and Forestry segment operating profit more than doubled to $337 million.
- Outlook for fiscal year 2018 projects a 19% increase in net sales and revenues, and net income of approximately $2.6 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Deere & Co kept $0.07.
- Revenue$29.74B100.0%
- Cost of revenue−$19.93B67.0%
- Gross profit$9.80B33.0%
- Operating costs−$6.23B21.0%
- Operating income$3.57B12.0%
- Interest, other & tax−$1.42B4.8%
- Net income$2.16B7.3%
Where FY2017 revenue went
$29.74B- Cost of revenue: $19.93B, 67% of revenue
- Net income: $2.16B, 7.3% of revenue
- R&D: $1.37B, 4.6% of revenue
- SG&A: $3.10B, 10% of revenue
- Other operating costs: $1.76B, 5.9% of revenue
- Interest, other & tax: $1.42B, 4.8% of revenue
Kept 7.3% as net incomeNet income $2.16B · 7.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed December 18, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $29.74B$26.64B | +11.6% |
| Cost of Revenue | $19.93B$18.25B | +9.2% |
| Gross Profit | $9.80B$8.40B | +16.8% |
| R&D Expenses | $1.37B$1.39B | −1.5% |
| SG&A Expenses | $3.10B$2.79B | +11.0% |
| Operating Expenses | $26.58B$24.42B | +8.9% |
| Operating Income | $3.57B$2.61B | +37.0% |
| Interest Expense | $899.00M$763.70M | +17.7% |
| Net Income | $2.16B$1.52B | +41.7% |
| EPS (Basic) | $6.76$4.83 | +40.0% |
| EPS (Diluted) | $6.68$4.81 | +38.9% |
| Shares Outstanding (Basic) | 319.50M315.20M | +1.4% |
| Shares Outstanding (Diluted) | 323.30M316.60M | +2.1% |
05—Questions
Frequently Asked Questions
What were the key financial drivers for Deere & Company in fiscal year 2017?
Deere & Company experienced strong financial performance in fiscal year 2017, with worldwide net sales and revenues increasing by 12% to $29.7 billion. This growth was primarily driven by higher shipment volumes, favorable price realization, and positive currency translation effects across its Equipment Operations. The Agriculture & Turf segment saw a 9% increase in net sales and a 46% rise in operating profit, while the Construction & Forestry segment's net sales grew by 17% with a more than doubling of operating profit. The Financial Services segment also reported a slight increase in net income.
What is the significance of the Wirtgen Group acquisition?
The acquisition of Wirtgen Group, completed on December 1, 2017, is a significant strategic move for Deere & Company. Wirtgen is a global leader in road construction equipment, and its integration into Deere's Construction & Forestry segment is expected to establish Deere as a more prominent player in this market. The acquisition is projected to contribute approximately $3.1 billion in net sales and $75 million to operating profit in fiscal year 2018, significantly enhancing the company's scale and product portfolio in the construction sector.
What is Deere & Company's outlook for fiscal year 2018?
Deere & Company's outlook for fiscal year 2018 is positive, with projections for a substantial increase in overall net sales and revenues by approximately 19% to around $35.4 billion (including the Wirtgen contribution). This growth is expected to be supported by an anticipated 9% increase in worldwide Agriculture and Turf equipment sales and a significant 69% increase in Construction and Forestry equipment sales, the latter heavily influenced by the Wirtgen acquisition. The company forecasts net income attributable to Deere & Company to be approximately $2.6 billion for fiscal year 2018, indicating continued strong performance.
06—Continue