Deere & Company

Ticker: DE

Sector: Industrials

Industry: Farm & Heavy Construction Machinery

Summary

Deere & Company also know as John Deere is an american company that makes agricultural machinery, heavy, equipment, forestry machinery, diesel engines, drivetrains, and lawn care equipment. The company also does financial services.

Deere & Company, founded by John Deere in 1837, initially gained recognition for its innovation in agricultural equipment. Before Deere's invention, most farmers used iron or wooden plows that were prone to soil sticking, requiring frequent cleaning. Deere's creation of a steel saw blade plow, polished to allow dirt to slide off easily, set them apart in the market. John Deere entered a partnership with Leonard Andrus, and together they purchased land to establish a two-story factory near the Rock River in Illinois. By 1842, they produced approximately 100 plows, and the following year, their production increased to around 400 plows.

In 1848, John Deere moved to Moline, Illinois, to be closer to the Mississippi River, and he joined forces with Robert Tate and John Gould to build a new factory. By 1849, they were producing 200 plows per month. In 1853, Deere bought out Tate and Gould's interests, and his son, Charles Deere, joined the business. The company expanded its product line to include wagons, corn planters, and cultivators. By 1857, they were selling about 1,120 products per month. However, in 1858, an economic downturn prompted John Deere to sell his stake in the company to his son-in-law and his son. He remained as the company's president until his retirement in April 1886 and passed away the following month.

Charles Deere, John Deere's son, introduced marketing centers and independent retail dealers in 1869 to boost sales nationwide. In 1912, William Butterworth, Charles' son-in-law, succeeded him as president and led the company's entry into the tractor business. Instead of manufacturing their own tractors, they acquired the Waterloo Gasoline Engine Company in 1918, which produced the popular Waterloo Boy tractor. The tractors were sold under that name until 1923 when they introduced the John Deere Model. Most of the tractors are still manufactured in Waterloo, Iowa, the former home of the Waterloo Gasoline Engine Company. Over the years, John Deere expanded its product offerings to include a wide range of equipment for agriculture, lawn and garden, construction, landscaping and grounds care, golf and sports turf, forestry and logging, engines and drivetrain, government and military sales, and rental sales.

In terms of revenue generation, John Deere operates in various sectors. Their financial services division provides financing and lease options to customers, while their repair services cater to equipment maintenance and parts sales. The company has positioned itself in a way that only authorized John Deere dealerships can repair their equipment, ensuring that they retain revenue from parts and services. As of 2022, the company reported equipment operating sales and revenues of $47.917 billion, with several subcategories contributing to this figure.

The breakdown of revenue generated by each category in 2022 is as follows:

1. Production Agriculture: Large and certain mid-size tractors, combines, cotton pickers, sugarcane harvesters, tillage and seeding equipment, sprayers, nutrient management machinery, and related attachments and service parts. Revenue: $21.685 billion.
2. Small Agriculture: Mid-size and utility tractors, self-propelled forage harvesters, hay and forage equipment, balers, mowers, and related attachments and service parts. Revenue: $10.027 billion.
3. Turf: Turf and utility equipment, including riding lawn equipment, golf course equipment, utility vehicles, commercial mowing equipment, and related attachments and service parts. Revenue: $3.027 billion.
4. Construction: A broad range of machines used in construction, earthmoving, and material handling, including loaders, excavators, dozers, graders, and related attachments and service parts. Revenue: $5.864 billion.
5. Compact Construction: Smaller construction equipment, such as compact excavators, track loaders, wheel loaders, skid steers, and related attachments and service parts. Revenue: $1.667 billion.
6. Roadbuilding: Equipment used in roadbuilding and renovation, including milling machines, pavers, compactors, crushers, asphalt plants, and related attachments and service parts. Revenue: $3.441 billion.
7. Forestry: Equipment used in timber harvesting, including skidders, harvesters, loaders, forwarders, and related attachments and service parts. Revenue: $1.308 billion.
8. Financial Products: Financing services, including retail notes, wholesale financing, leasing, and extended warranties. Revenue: $3.769 billion.

John Deere's largest sales regions by revenue are as follows: