AGCO Corp at Bank of America Global Industrials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Feniger - BofA Global Research - Analyst : Maybe Damon, we could kind of lead into that. I mean, every day, there's another headline if we're going to go into a recession. I know you were formally the CFO of Kennametal with many of the audience know short-cycle volume-driven industrial production type business. Ag's a little different. Just love to give the update of where you think we are in the ag economy as everyone's worrying about a recession, it feels like the ag economy has kind of been in one already. So love to kind of get a sense where you think the last few years have driven us to today and where the ag economy kind of sits?

Question: Michael Feniger - BofA Global Research - Analyst : And do we have a sense on the fleet age or the replacement cycle for farmers, how often they kind of churn their fleet. I'm just curious if you kind of have a sense of that?

Question: Michael Feniger - BofA Global Research - Analyst : Perfect. And I know we touched on -- we're getting closer to that bottom or feels like we're at that bottom. You guys are global and it's kind of moved in different directions when you think of Europe, North America and Brazil, which are all in a downturn, but they kind of all entered in different periods. Maybe, Damon, you can kind of help us understand where we think about Europe, North America and Brazil in terms of that peak to trough to mid-cycle range?

Question: Michael Feniger - BofA Global Research - Analyst : And talking about you guys being global, obviously, your global manufacturer. And every day, there's a new tariff headline. So I just would love to help kind of get the context just as a manufacturer, how you're contending with these tariff headlines? What you're seeing as the biggest risk write-down we think of Mexico, Canada, Europe, how to kind of contextualize that as with your manufacturing footprint?

Question: Michael Feniger - BofA Global Research - Analyst : And just with tariffs, you discussed how you mapped out externally where some of your other OEMs and competitors might be. What do you guys see last time with tariffs in terms of how it impacted farmer sentiment, but also your ability to get price is things different this time around? Just curious how maybe the farmer contends with tariffs that go around in Trump 2.0 or even the ability to kind of raise pricing in this environment?

Question: Michael Feniger - BofA Global Research - Analyst : And you just touched on net farm income. Just for the audience. Obviously, commodity prices have kind of moved around a lot. But what are some parameters we should think about for corn in terms of breakeven level for farmers right now?

Question: Michael Feniger - BofA Global Research - Analyst : Perfect. And just you touched on it, but Brazil could be that natural hedge in this trade war that we're potentially entering into. It's been a brutal downturn. Are you seeing any signs to start this year that Brazil is bottoming, nearing a bottom? And how does that influence your cadence when it comes to production this year in Brazil?

Question: Michael Feniger - BofA Global Research - Analyst : That's helpful. And then if we could just move to Europe, which is your largest region, but probably more stable out of the other two. I think it's nearly 75% of your operating profit. So a nice stable earnings driver for you guys. Just it seems like sentiment has picked up there on the SIMA index, but German tractor registrations were a little bit weak to start the year. Just what are you kind of seeing in Europe? I think I know it's different by region. But what could positively surprise the market for Europe? What should we be looking at for risk there?

Question: Michael Feniger - BofA Global Research - Analyst : Fair enough. And then just moving on to the other big obstacle that investors talk about our inventories. And I know that's been a big target for you guys coming this year. So where kind of are we globally when we think of your regions on that inventory? How are you guys kind of making progress? How do we sense if we're ahead of schedule, if there's still more work to be done?

Question: Michael Feniger - BofA Global Research - Analyst : And you guys are doing -- your cutting production, trying to get that inventory down to a part of your strategy. What we hear from talking to dealers and not just yours, but others is the you side, is a big obstacle right now? Is that still an obstacle? What are you seeing in the first few months of the year? How do you attack that when maybe that might be independent channels that have a little different dynamics?

Question: Michael Feniger - BofA Global Research - Analyst : Perfect. And can we talk about the outgrowth? I mean, Fendt is a big part of that, I think strategy. Before the farm equipment downturn, I think Fendt grew 30% just in 2022. So just help us understand that outgrowth strategy. Where are you gaining share? There's Fendt, there's Massey, there's a couple of different brands that you're kind of trying to attack that outgrowth. So just love to get a sense of where that is? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 18, 2025 / 9:40AM, AGCO.N - AGCO Corp at Bank of America Global Industrials Conference Because I think for some people, the idea of importing a European premium product to the US is a little strange to some even though it's been gaining traction. So help us kind of understand how that outgrowth plays out?

Question: Michael Feniger - BofA Global Research - Analyst : And maybe that's a great way for us to wrap it up in terms of what did you feel that Trimble ranks? We could all discuss the timing of that acquisition, but what did that bring to your retrofit aftermarket kind of opportunity that you guys see going?