During a profitable 2021, Deere & Co. leapt ahead with its strategic plan to increase product autonomy, connectivity and sustainability and the global tractor giant is predicting more of the same for 2022. That was the message delivered to Deere shareholders on Wednesday, Feb. 23, by Chairman and CEO John May at the Moline-based company's […]
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During a profitable 2021, Deere & Co. leapt ahead with its strategic plan to increase product autonomy, connectivity and sustainability and the global tractor giant is predicting more of the same for 2022. That was the message delivered to Deere shareholders on Wednesday, Feb. 23, by Chairman and CEO John May at the Moline-based company's annual meeting, which for the second straight year was conducted virtually. The meeting also came less than a week after Deere reported higher than expected earnings for the first quarter, which ended Jan. 30, 2022, despite a number of major challenges. They included the global COVID-19 pandemic, a five-week UAW strike that halted production, as well as persistent supply chain disruptions that are expected to continue for the near future, Mr. May said. In fiscal 2021, which ended Oct. 31, 2021, Deere reported net sales and revenue of more than $44 billion, up from $9 billion in the 2020 fiscal year. Deere’s income of $5.96 billion also was the highest in Deere history in part because “demand was the strongest in some time,” all of which “added up to a year of impressive financial results,” Mr. May told shareholders participating in the virtual meeting. He called 2021 a year of “dramatic achievement” for Deere. It also was a profitable one for investors who saw a 50 percent return on their investment; shareholders who saw their quarterly dividend rate increase twice by a combined 38%; dealers who saw increased demand for their products; and UAW workers who inked a collective bargaining agreement that Mr. May said “set a new standard for wage rules in our industry.” Looking ahead, Mr. May said, “We believe 2022 holds a great deal of promise. Agricultural fundamentals are positive, customer confidence is running high and infrastructure spending is set to rise. As a result, we’re forecasting higher sales and earnings in the year ahead.” Also in 2022, the company plans to amp up its focus on vehicle autonomy, electrification, connectivity and sustainability. Those are some of the key elements driving Deere’s Leap Ambitions for 2026 and 2030. Those goals, in turn, are linked to John Deere’s Smart Industrial Strategy and contained in the Deere & Co. Sustainability Report, which also was released last week along with the earnings report. “The measures of our strategy,” the report said, are designed to boost economic value and sustainability for Deere’s customers, as well as for employees, investors, and other stakeholders. A key element of that strategy is to continue building out Deere’s technology stack, or system-wide technology infrastructure, to provide the advanced products customers need and are demanding, both Mr. May and Ryan Campbell, Deere’s senior vice president and chief financial officer, told shareholders in a Q&A segment aired during the virtual meeting. Deere is doing that with its own employees, whom Mr. May characterized as “the best in the industry,” and through innovative companies that are continuing to enter the Deere fold. Take Deere’s recent deal to acquire majority ownership of Austria’s Kreisel Electric, Inc., a battery technology innovator. Kreisel’s battery-buffered charging technology will help Deere build out infrastructure to support global customers. That, in turn, will help Deere in its quest to provide an electric offering for 100% of its small and turf products. Deere also will focus on growing its family of autonomous products to join its first fully autonomous tractor and tillage tool revealed on Jan. 4. Such products not only add value for farmers, they also are good for the planet. For example, Mr. Campbell and Mr. May focused on the introduction of the first chemical sprayers that use camera technology to distinguish weeds from fallow ground, which results in less pesticide spread and consumption. New technology also is making forestry smarter, safer and more sustainable, they said, with equipment that helps workers “do jobs better than they were able to do in the past, and with lower carbon emissions.” “Our customers are the ultimate stewards of the land,” Mr. Campbell said. “So they care about the environmental impact that they and their operations have.” These new tools will help them to lower that impact. Deere’s connectivity to its equipment worldwide also continues to be a top focus. The goal is to have 1.5 million connected machines by 2026. That will better serve farmers by providing the service, data and analysis they need when they need it, the company said. Going forward, Mr. May said, his goal for Deere’s workforce is this: “We want the best talent, we want the best teams and make sure we provide the best place to work.” “We would not have achieved the success that we have up to the point we’re at without the support of our world class employees,” he said. “We’ve got the best employees in the industry, hands down.”