Deere & Co. is interested in seeing its customers go to seed and grow. The company, one of the world's largest makers of farm equipment, is also a major producer of construction, forestry, and commercial and residential lawn care equipment. Deere operates through three business segments: the agriculture and turf and construction and forestry segments make up its equipment operations; a credit segment provides financial services. Deere, famous for its "Nothing Runs Like A Deere" marketing, sells John Deere and other brands through retail dealer networks and also makes products for outlets Home Depot and Lowes. It has manufacturing and sales facilities worldwide; North America represents about 60% of sales.
Year-over-year 2011 net sales and revenues rose 23% thanks mainly to a greater amount of equipment shipments and a favorable foreign currency exchange.
By segment, agriculture and turf net sales, accounting for 75% of revenue, increased 21% in 2011. Consolidated into five product platforms -- crop harvesting, turf and utility, hay and forage, crop care, and tractors, the agriculture and turf segments makes such products as loaders, combines, corn pickers, cotton and sugarcane pickers, and even golf course equipment and outdoor power products. Besides John Deere, brands include Frontier, Green Systems, as well as SABO in Europe and Benye in China.
Supported by launches of advanced new products, global sales for this segment are predicted to rise by about 15% in 2012 as strong demand for agricultural commodities continues. To keep this segment's manufacturing in sync with demand, Deere increases production during the second and third quarters when customers are buying more. Formed by the combination of the commercial and consumer equipment division with the agricultural equipment division in 2009, the agriculture and turf segment consolidated redundant operations.
Construction and forestry net sales, representing 17% of revenue, surged about 45%. Making 90% of the types of equipment used in North America, this segment distributes backhoe loaders, crawler dozers, motor graders, log skidders, and skid-steer loaders. Supported by launches of advanced new products and geographic growth, sales for this segment are predicted to increase about 16% in 2012. Demand from independent rental companies is especially expected to keep sales for this segment on a positive track. Besides manufacturing, this segment resells products made by other companies. Net sales of equipment operations, agriculture and turf twinned with construction and forestry, soared 25%.
Besides equipment, the company's other main operational division, financial services, accounting for 7% of revenue, was up 4%. Comprising the former segments of credit and "other," financial services provides credit services for Deere dealers and wholesalers. Other services include crop risk mitigation and extended equipment warranties.
In North America, Deere distributes products to more than 2,490 dealerships that are primarily independently owned. About 1,550 of them sell agricultural equipment while more than 410 retail products of the company's construction and forestry segment. More than 500 locations sell only turf products. John Deere Landscapes works out of more than 420 locations. Outside North America, Deere products are marketed through distributors and dealers.
International operations, especially the construction and forestry segment, are also supported by joint ventures. Deere has partnered with Hitachi (Deere-Hitachi Construction Machinery) in manufacturing hydraulic excavators and track log loaders in the Americas; Deere distributes several Hitachi brands in the Americas, and certain products made by Deere are distributed by Hitachi in Asia. In China a joint venture with Xuzhou Bohui Science & Technology Development makes hydraulic excavators. In India Ashok Leyland John Deere Construction Equipment makes construction equipment. – less