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AGCO Reports Fourth Quarter Results

Company reports annual net income for 2020 of $419.8M, an increase from $122.8M in 2019

Photo: AGCO
Photo: AGCO

AGCO reported net sales of approximately $2.7 billion for the fourth quarter of 2020, an increase of approximately 8.1% compared to the fourth quarter of 2019. Reported net income was $1.78 per share for the fourth quarter of 2020, and adjusted net income(3), which excludes restructuring expenses and a gain on sale of an investment, was $1.54 per share.

These results compare to reported net loss of $1.17 per share and adjusted net income, which excludes non-cash impairment charges, restructuring expenses and a tax gain, of $0.94 per share for the fourth quarter of 2019. Excluding favorable currency translation impacts of approximately 1.4%, net sales in the fourth quarter of 2020 increased approximately 6.7% compared to the fourth quarter of 2019.

Net sales for the full year of 2020 were approximately $9.1 billion, which is an increase of approximately 1.2% compared to 2019. Excluding unfavorable currency translation impacts of approximately 1.8%, net sales for the full year of 2020 increased approximately 3.0% compared to 2019. For the full year of 2020, reported net income was $5.65 per share, and adjusted net income(3), which excludes non-cash impairment charges, restructuring expenses and a gain on sale of an investment, was $5.61 per share. These results compare to reported net income of $1.63 per share and adjusted net income, which excludes non-cash impairment charges, restructuring expenses and certain tax charges and gains, of $4.44 per share for 2019.

Fourth Quarter Highlights

  • Reported fourth quarter regional sales results(1): Europe/Middle East (“EME”) 13.7%, North America (10.2)%, South America 21.1%, Asia/Pacific/Africa (“APA”) 2.1%
  • Constant currency fourth quarter regional sales results(1)(2)(3): EME 7.7%, North America (10.3)%, South America 52.7%, APA (3.8)%
  • Fourth quarter regional operating margin performance: EME 11.9%, North America 2.0%, South America 5.9%, APA 10.6%
  • Full-year adjusted operating margins(3) improved to 7.0% in 2020 compared to 5.9% in 2019
  • Generated approximately $896.5 million in cash flow from operations and approximately $626.6 million in free cash flow(3) in 2020
  • Full-year earnings forecast for 2021 in a range from $7.00 to $7.25 per share

“The AGCO team delivered strong operational results leveraging improving markets to produce sales and earnings growth in the fourth quarter,” says Eric Hansotia, AGCO’s chairman, president and CEO. “Our focused execution allowed us to overcome supply chain difficulties and maintain production levels, while reducing company and dealer inventories, which contributed to significant cash flow generation.

"Our improved results allowed us to maintain our investments in premium technology, sustainable smart farming solutions and enhanced digital capabilities," he continues. "Looking forward to 2021, we are forecasting sales and earnings growth as industry conditions trend positively and we position AGCO for future success.”

Increased grain consumption, driven by economic recovery and higher export demand, helped to offset a solid year of global crop production leaving year-end grain inventories lower than anticipated, says Hansotia.

“Reduced grain stocks supported a rally in soft commodity prices, lifted farmer sentiment and supported higher demand for agricultural equipment during the fourth quarter," he notes. "Our long-term global view remains positive. Increasing demand for commodities, driven by the growing world population, rising emerging market protein consumption and biofuel use, are expected to support healthy conditions in our industry.”

(1)As compared to fourth quarter 2019.
(2)Excludes currency translation impact.
(3)See reconciliation of Non-GAAP measures in appendix.

About AGCO
AGCO is a global leader in the design, manufacture and distribution of agricultural solutions and delivers high-tech solutions for farmers feeding the world through its full line of equipment and related services.

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