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About AGCO Corporation

This company has been plowing the furrow of premium agricultural equipment since 1990. AGCO makes tractors, combines, hay and forage tools, sprayers, grain storage and protein production systems, seeding and tillage implements, and replacement parts for agricultural end uses. It sells through a global network of almost 3,300 dealers and distributors spanning about 140 countries. It also builds diesel engines, gears, and generators through its power engines unit. Core brands include Massey Ferguson, GSI, Challenger, Valtra (Finland-based), and Fendt (Germany). AGCO Finance offers financing services to retail customers and dealers via a venture with Rabobank, a Dutch bank specializing in agricultural loans. Europe accounts for nearly 60% of AGCO's sales.

Operations

Tractors account for more than 55% of AGCO's sales and replacement parts around 15%. Grain storage and protein production systems account for over 10%, and other machinery products account for over 15%

Geographic Reach

Georgia-based AGCO has manufacturing locations in the US, France, Italy, Finland, Germany, Austria, Hungary, Denmark, Brazil, and China. It manufactures and assembles its products in around 45 locations worldwide, including four locations where the company operates joint ventures. Europe is its largest market, representing about 60% of net sales, followed by North America at around a quarter of sales.

Sales and Marketing

AGCO distributes its products primarily through a network of nearly 3,300 independent dealers and distributors, who are responsible for retail sales to the equipment's end user in addition to after-sales service and support of the equipment. Distributors also sell its products through a network of dealers supported by the distributor. Sales are not dependent on any specific dealer, distributor, or group of dealers. AGCO also sources machinery and parts from third parties to control costs, inventory, and supply.

Financial Performance

AGCO's revenue is closely linked to shifts in the agricultural industry. Sales of its equipment are affected by, among other things, changes in net cash farm income, farm land values, weather conditions, the demand for agricultural commodities, commodity prices and general economic conditions. As a result, AGCO's revenue has been fluctuating in the last five years, but overall rising about 21% between 2015 and 2019.

Sales in 2019 decreased 3% to $9 billion compared to $9.4 billion in 2018, primarily as a result of sales declines in its South American and APA regions, partially offset by sales growth in our North American and EME regions, on a constant currency basis.

Net income decreased 56% to $125.2 million in 2019 compared to 2018.

Cash at the end of 2019 was $432.8 million, an increase of $107 million from the prior year. Cash from operations contributed $695.9 million to the coffers, while investing activities used $271.6 million, mainly for purchases of property, plant and equipment. Financing activities used $313.4 million, primarily for debt repayment.

Strategy

AGCO's long-term strategy includes establishing a greater manufacturing and supply-chain and/or marketing presence in emerging markets such as India, China and Africa.

The company has made significant investments in smart farming technology that leverages data collected from machinery to increase productivity. AGCO now offers a full line of smart farming equipment that serve the needs of a farm's entire operations from soil preparation and planting, spraying, and harvesting to grain storage and protein production. The company's IDEAL combine, launched in 2019, has more than 80 onboard computers and sensors that provide data visualization of the machinery's operation.

AGCO further boosted its smart ag offerings in 2019 with the announcement of a strategic partnership with Solinftec, a provider of digital agriculture solutions. The deal allows AGCO customers access to Solinftec's digital offerings including on-board computers, soil sensors, and algorithms that enable real-time insights that improve agricultural efficiency.

Solinftec's solutions launched in Brazil in early 2019 for producers of sugarcane, soybeans, cotton, and corn, and will be available to US soybean and corn producers in 2020.

The market downturn had the additional effect of prompting AGCO to improve its operational efficiency in search of margin growth amid low revenue. The company targeted purchasing, factory productivity, and product development. AGCO also balanced reductions in sales and administrative and fixed manufacturing costs with focused spending.

AGCO Corporation

4205 River Green Pkwy
Duluth, GA 30096-2584
Phone: 1 (770) 813-9200

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: AGCO
Stock Exchange: , NYSE
SVP and CFO: Andrew H. Beck
Chairman, President, and CEO: Martin H. Richenhagen
SVP and Chief Supply Chain Officer: Hans-Bernd Veltmaat
Employees (This Location): 215
Employees (All Locations): 21,000

Major Office Locations

Duluth, GA

Other Locations

Visalia, CA
Norcross, GA
Clear Lake, IA
Batavia, IL
Morton, IL
Beloit, KS
Hesston, KS
Edgewood, MD
Jackson, MN
Independence, MO
Charlestown, NH
Kadoka, SD
La Porte, TX
Kitchener, Canada
Espoo, Finland
Forssa, Finland
Huittinen, Finland
Hyllykallio, Finland
Iisalmi, Finland
Joensuu, Finland
Jyvaskyla, Finland
Kajaani, Finland
Kokkola, Finland
Kouvola, Finland
Kuopio, Finland
Kuusamo, Finland
Lahti, Finland
Lappeenranta, Finland
Loimaa, Finland
Mikkeli, Finland
Oulu, Finland
Pirkkala, Finland
Pori, Finland
Rovaniemi, Finland
Salo, Finland
Sastamala, Finland
Savonlinna, Finland
Turku, Finland
Tuuri, Finland
Vaasa, Finland
Varkaus, Finland
Virrat, Finland
Ylivieska, Finland