AGCO Corp at Morgan Stanley Technology, Media & Telecom Conference Transcript

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

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : <_ALACRA_META_ABSTRACT>So maybe listen, I think you're one of the three kind of global oligopoly of ag equipment, but I think just describing you as part of this oligopoly kind of does a little bit of a disservice to the company and what you've been working on, particularly as it pertains to technology and how much that increasingly is a bigger part of your business. So maybe to kind of level set for those that are not as familiar with the company and maybe just think of an ag equipment and a tractor if you could quickly just kind of give us an overview of AGCO and how technology kind of fits and why it's so important to your business today.

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful. And I think, listen, you touched on it a little bit with the retrofit. I think that's an area that really differentiated you, again, that you're not just focused on your brands. You can go and retrofit older tractors from one of your competitors and get it to kind of the latest state of the art. If you could just maybe expand on that a little bit more in terms of -- talk about some of the specific products and technology that you're delivering for the farmer. What solutions that you can retrofit on their older equipment?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful and pretty exciting. I guess as you think about some of those products like the grain cart that you talk about, what is ultimately the kind of savings? I think it's easy to understand maybe that conceptually the labor that you're saving the farmer, but is there a way to kind of quantify some of those for whether it's planters, sprayers, or the grain cart?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : I'm assuming that's pretty attractive right now given the market that we're in. So maybe let's talk about it from that perspective. What's kind of the adoption rate that you're seeing from farmers? What's kind of the conversations on some of these retrofit products that you're hearing when you talk to them?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's great. And maybe could you talk about just the competitive dynamic because as you mentioned at the beginning one of the differentiators to AGCO was that you had this retrofit opportunity. And I think since some of your competitors have started to launch some of their own kind of retrofit products, are you seeing that impact, I guess the demand for the product, the level of kind of differentiation, or just the overall competitive dynamic? 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 06, 2025 / 5:15PM, AGCO.N - AGCO Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful. And I do want to remind the audience, if anyone has any questions, feel free to just raise your hand and we'll get to you. But maybe just to tie into that, we'd love to understand, I guess, the customer base. You go to market, as you mentioned, in a different manner. The retrofit customer, is that generally a second or third owner who is more value-oriented? Or are you seeing new owners who, particularly in this market, right, where we've seen price be such a -- or I guess inflation be such a challenge? Are you seeing more kind of new owners be willing to perhaps buy older technology and retrofit, or what are you seeing from an owner perspective?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And what would you say, I guess, differentiates your technology specifically, like kind of apples to apples? Why would they want to take out something that's kind of brand new from Adira or C&H and put on AGCO. What differentiates them?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And maybe to that point, because when I think of farmers, I think of people that maybe want to stick to what they know works, right? You don't want to mess with the way your field is run. Have you seen that evolve over the years as they've been more exposed to this technology and just technology in general, right, of farmers being willing to be on the leading edge of technology and trialing new products to improve their yield?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And maybe just -- and I don't know if you have this kind of for just the retrofit market, but do you have a TAM specifically for just retrofit versus kind of broader precision ag? Or how do you think about those separately, or maybe don't?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful. And maybe just to help us understand, I guess, how this ultimately looks, because there's different aspects, right? You have the retrofit. You have the new solutions. Ultimately, we didn't maybe get too much into PTx Trimble, but this is really where the data, the technology, digital meets the physical, right? So I want to talk about maybe how you go to market, how you monetize it in terms of -- it makes sense with the retrofit. You're just selling that kit. But in terms of, again, PTx Trimble or where you're selling really more the technology or the software and the IP of how they can improve their yield ultimately through that display and everything in those sensors, I guess, can you help us understand that go-to-market monetization, where will you use just kind of selling one-time hardware versus where it might make sense to have a subscription or per acre or per use?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : Yes, no, that's very helpful. And I think historically there was a perception that the farmer was going to be very anti any kind of subscription models, just given how, again, they might be very dependent on the yield that particular year on how much they're making. Are you seeing any evolution of that, particularly for this new technology where it makes a lot of sense in what you're offering? More receptivity to that kind of more per hour or per or your licensing fees or subscription?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : Got it. And I think you talked about, and you laid it out at the Investor Day, right, $2 billion from precision ag over kind of the time, I guess, 2029, your long-term target. Can you talk about the kind of bridge to getting that from an adoption rate perspective in terms of what you need to see? Do you need to see an ag cycle, or is it just continued penetration in our new technology? Just kind of what are the key steps that get you to $2 billion?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : Yes. 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 06, 2025 / 5:15PM, AGCO.N - AGCO Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful. And I want to go back to the data platform aspect that you mentioned. I think that's very important and an area that I think is maybe starts to get you really even further beyond just the tractor, right, when you start to kind of connect all of these different devices. Can you just help us understand, I guess, who are the key partners here? What is the kind of -- what do you kind of own in terms of either the IP or the software versus where do you need to kind of partner, and how does that ultimately end up at products like Panorama and others?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And you talked about growing your engineering spend by 60% over the years, right? And I think we've been in that kind of innovation R&D kind of phase. How do you see that progressing both internally, the investments you feel you need to make incrementally in areas like this, as well as any kind of areas, white space, that you still feel kind of that you can go to, whether to bolt on -- to acquire more of these capabilities, or are we kind of further along and now it's just applying?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : Maybe just on the data part, does the farmer ultimately own the data or do you own the data? How does that work once you collect all that information? And what is kind of your ability to just take all of that and use it how you want in terms of further innovation?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And I feel like I have to ask this, and I feel it's unfair that I left you three minutes to do so, but just given everything that's happening today with tariffs, geopolitical, how do you kind of see the state of affairs and maybe any impact on your ability to kind of deploy and the adoption rates on technology?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : And I believe you're one of the bigger players in Germany and have a good position there, and I think that's an area that's gotten some attention just given some of the stimulus around infrastructure. But any other implications to maybe larger farm equipment or just more broadly to your business from what's happening in Germany?

Question: Angel Castillo - Morgan Stanley & Co. LLC - Analyst : That's very helpful. Thank you. I think that brings us to the end of time, so I'm going to appreciate everyone's time. Thank you, gentlemen, for joining me today.