- Net sales of $3.2 billion, down
15.1% year-over-year
- Reported earnings per share of $(4.92) and adjusted earnings per
share(1) of $2.53
- 2024 sales and earnings outlook lowered in response to further
softening market conditions
- Agreement to divest the Grain & Protein business announced
on July 25, 2024
DULUTH,
Ga., July 30, 2024 /PRNewswire/ --
AGCO (NYSE: AGCO), a global leader in the design, manufacture
and distribution of agricultural machinery and precision ag
technology, reported net sales of $3.2
billion for the second quarter ended June 30, 2024, a decrease of 15.1% compared to
the second quarter of 2023. Reported net loss was $(4.92) per share for the second quarter of 2024,
which includes the estimated loss on the Grain & Protein
business held for sale, and adjusted net income(1) was
$2.53 per share. These results
compare to reported net income of $4.26 per share and adjusted net
income(1) of $4.29 per
share, for the second quarter of 2023. Excluding unfavorable
foreign currency translation of 0.9%, net sales in the second
quarter of 2024 decreased 14.2% compared to the second quarter of
2023.
Net sales for the first six months of 2024 were approximately
$6.2 billion, which is a decrease of
13.7% compared to 2023. For the first six months of 2024, reported
net loss was $(2.67) per share, which
includes the estimated loss on the Grain & Protein business
held for sale, and adjusted net income(1) was
$4.85 per share. These results
compare to reported net income of $7.36 per share and adjusted net
income(1) of $7.80 per
share for the same period in 2023. Currency translation impacts
were flat for the first six months of 2024 compared to the same
period in 2023.
"While we continue to successfully execute our Farmer-first
strategy, second quarter results were influenced by weakening
market conditions and significant production cuts aimed at reducing
our Company and dealer inventories," said Eric Hansotia, AGCO's Chairman, President and
Chief Executive Officer. "Declines in commodity prices and lower
projected farm income in 2024 have negatively affected farmer
sentiment, further dampening global industry demand. Given the
current environment, we are taking aggressive actions, including
our recently announced restructuring program, to control expenses,
reduce production levels and lower investments in working capital.
We are balancing these near-term cost reductions with continued
investment in our longer-term high-margin growth initiatives that
will help deliver more sustainable results through the economic
cycles."
"On July 25, we announced an
agreement to divest the Grain & Protein business," continued
Hansotia. "The divestiture of this business supports our strategic
transformation, recently accelerated by the PTx Trimble joint
venture. Divesting allows us to streamline and sharpen our focus on
AGCO's portfolio of award-winning agricultural machinery and
precision ag technology products. Going forward, we will be better
positioned for long-term growth in our higher margin and higher
free cash flow generating businesses. Simultaneously, it will raise
our profitability through the cycle as Grain & Protein has
historically been a below average margin business."
Second Quarter Highlights
- Reported regional sales results(2): Europe/Middle
East ("EME") (4.4)%, North
America (16.0)%, South
America (41.7)%, Asia/Pacific/Africa ("APA") (33.6)%
- Constant currency regional sales results(1)(2)(3):
EME (3.7)%, North America (15.8)%,
South America (39.2)%, APA
(32.6)%
- Regional operating margin performance: EME 15.2%, North America 9.2%, South America 3.6%, APA 7.9%
- Paid a variable special dividend of $2.50 per share in addition to the $0.29 quarterly dividend
(1) See reconciliation
of non-GAAP measures in appendix.
|
(2) As compared to second
quarter 2023.
|
(3) Excludes currency
translation impact.
|
Market Update
|
|
Industry Unit Retail
Sales
|
|
|
Tractors
|
|
Combines
|
Six Months Ended June
30, 2024
|
|
Change from
Prior Year
Period
|
|
Change from
Prior Year
Period
|
North
America(4)
|
|
(8) %
|
|
(11) %
|
South
America(5)
|
|
(14) %
|
|
(35) %
|
Western
Europe(5)
|
|
(5) %
|
|
(20) %
|
|
(4) Excludes compact
tractors.
|
(5) Based on Company
estimates.
|
"Crop production forecasts are predicting healthy harvests
across most major agricultural production regions," said Hansotia.
"Commodity prices have trended down as we've moved through the
planting season and into summer, further pressuring farm income. We
continue to expect increased adoption of precision technology, but
more challenging farm economics are resulting in weaker global
industry demand across most equipment categories. In the first half
of 2024, retail tractor industry demand fell by an average of 8%
across the three major regions."
North American industry retail tractor sales decreased 8% during
the first six months of 2024 compared to the first six months of
2023. Sales declines in smaller equipment were more significant
than most of the larger equipment categories. Combine unit sales
were down 11% in the first half of 2024 compared to the same period
in 2023. Lower projected farm income and a refreshed fleet are
expected to continue to pressure industry demand for the remainder
of 2024, resulting in weaker North American industry sales compared
to 2023.
South American industry retail tractor sales decreased 14%
during the first six months of 2024 compared to the first six
months of 2023. Strong declines were consistent across Brazil, Argentina and the smaller South American
markets. Demand in Brazil was
negatively magnified by the floods in Rio Grande do Sul while also
continuing to be affected by funding shortfalls of the
government-subsidized loan program and a challenging first harvest
in the Cerrado region. Following three strong years, retail demand
in South America is expected to
further soften in 2024 as a result of lower commodity prices and
farm income.
In Western Europe, industry
retail tractor sales decreased 5% during the first six months of
2024 compared to the first six months of 2023 with the weakest
conditions in Italy, the
United Kingdom and Scandinavia.
Industry demand is expected to soften for the remainder of 2024 as
lower income levels pressure demand from arable farmers, while
healthy demand from dairy and livestock producers is expected to
mitigate some of the decline.
Regional Results
AGCO Regional Net Sales (in
millions)
Three Months Ended June
30,
|
|
2024
|
|
2023
|
|
% change
from 2023
|
|
% change
from 2023 due
to currency
translation(6)
|
|
% change
from 2023 due
to acquisition
of a business(6)
|
|
% change
excluding
currency
translation and
acquisitions
|
North
America
|
|
$
837.8
|
|
$
996.8
|
|
(16.0) %
|
|
(0.2) %
|
|
2.5 %
|
|
(18.3) %
|
South
America
|
|
348.9
|
|
598.6
|
|
(41.7) %
|
|
(2.5) %
|
|
0.5 %
|
|
(39.7) %
|
EME
|
|
1,902.9
|
|
1,990.8
|
|
(4.4) %
|
|
(0.7) %
|
|
1.7 %
|
|
(5.4) %
|
APA
|
|
157.0
|
|
236.5
|
|
(33.6) %
|
|
(1.0) %
|
|
2.2 %
|
|
(34.8) %
|
Total
|
|
$ 3,246.6
|
|
$ 3,822.7
|
|
(15.1) %
|
|
(0.9) %
|
|
1.8 %
|
|
(16.0) %
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
|
% change
from 2023
|
|
% change
from 2023 due
to currency
translation(6)
|
|
% change
from 2023 due
to acquisition
of a business(6)
|
|
% change
excluding
currency
translation and
acquisitions
|
North
America
|
|
$ 1,567.4
|
|
$ 1,919.9
|
|
(18.4) %
|
|
0.1 %
|
|
1.3 %
|
|
(19.8) %
|
South
America
|
|
652.3
|
|
1,102.4
|
|
(40.8) %
|
|
(0.3) %
|
|
0.3 %
|
|
(40.8) %
|
EME
|
|
3,631.9
|
|
3,694.6
|
|
(1.7) %
|
|
0.2 %
|
|
0.9 %
|
|
(2.8) %
|
APA
|
|
323.7
|
|
439.3
|
|
(26.3) %
|
|
(1.6) %
|
|
1.2 %
|
|
(25.9) %
|
Total
|
|
$ 6,175.3
|
|
$ 7,156.2
|
|
(13.7) %
|
|
— %
|
|
0.9 %
|
|
(14.6) %
|
|
(6) See footnotes for
additional disclosures.
|
North America
North American net sales decreased 19.8% in the first six months
of 2024 compared to the same period in 2023, excluding the impact
of favorable currency translation and favorable impact of an
acquisition. Softer industry sales, lower end-market demand and
de-stocking efforts all contributed to lower sales. The most
significant sales declines occurred in the hay equipment, mid-range
and high-horsepower tractor categories. Income from operations for
the first six months of 2024 decreased $119.9 million compared to the same period in
2023 and operating margins were 7.6%. The decrease resulted from
lower sales and production, as well as higher warranty expenses and
selling, general, and administrative expenses ("SG&A
expenses").
South America
Net sales in AGCO's South American region decreased 40.8% in the
first six months of 2024 compared to the same period in 2023,
excluding the impact of unfavorable currency translation and
favorable impact of an acquisition. Softer industry sales and
under-production of retail demand drove most of the decrease. Lower
sales of tractors and combines accounted for most of the decline.
Income from operations in the first six months of 2024 decreased by
$192.1 million compared to the same
period in 2023. This decrease was primarily a result of lower sales
and production volumes as well as negative pricing.
Europe/Middle East
Europe/Middle East region net sales decreased 2.8% in
the first six months of 2024 compared to the same period in 2023,
excluding the impact of favorable currency translation and
favorable impact of an acquisition. Growth in Germany, Turkey and France was offset by lower sales across nearly
all the other European markets. Declines across nearly all
equipment categories were mostly offset by increased sales of
high-horsepower tractors. Income from operations increased
$36.8 million and operating margins
improved 120 basis points in the first six months of 2024, compared
to the same period in 2023. The improvement was driven by a
favorable sales mix related to high-horsepower tractors.
Asia/Pacific/Africa
Net sales in Asia/Pacific/Africa decreased 25.9%, excluding unfavorable
currency translation impacts and favorable impact of an
acquisition, in the first six months of 2024 compared to the same
period in 2023 due to weaker end market demand and lower production
volumes. Lower sales in China,
Australia and Africa drove most of the decline. Income from
operations decreased by $18.6 million
in the first six months of 2024 compared to the same period in 2023
due to lower sales volumes.
Outlook
On April 1, 2024, AGCO acquired an
85% stake in PTx Trimble, and Trimble holds a 15% stake. AGCO began
consolidating the PTx Trimble joint venture into its consolidated
financial statements on April 1,
2024. In addition, on July 25,
2024, AGCO announced the entry into a definitive agreement
to sell its Grain & Protein business, which is expected to be
completed prior to year-end.
AGCO's net sales for 2024, including the positive impact of PTx
Trimble, are expected to be approximately $12.5 billion, reflecting lower sales volumes and
adverse foreign currency translation. Adjusted operating margins
are projected to be approximately 9%, reflecting the consolidation
of PTx Trimble as well as the impacts of lower sales, lower
production volumes, increased cost controls and modestly lower
investments in engineering. Based on these assumptions, 2024
adjusted earnings per share are targeted at approximately
$8.00.
* * * * *
AGCO will host a conference call with respect to this earnings
announcement at 10 a.m. Eastern Time on
Tuesday, July 30. The Company will refer to slides on its
conference call. Interested persons can access the conference call
and slide presentation via AGCO's website at www.agcocorp.com
under the "Investors" Section. A replay of the conference call will
be available approximately two hours after the conclusion of the
conference call for 12 months following the call. A copy of this
press release will be available on AGCO's website for at least 12
months following the call.
* * * * *
Safe Harbor Statement
Statements that are not historical facts, including the
projections of earnings per share, production levels, sales,
industry demand, market conditions, commodity prices, currency
translation, farm income levels, margin levels, strategy,
investments in product and technology development, new product
introductions, restructuring and other cost reduction initiatives,
production volumes, tax rates and general economic conditions, are
forward-looking and subject to risks that could cause actual
results to differ materially from those suggested by the
statements. The following are among the factors that could cause
actual results to differ materially from the results discussed in
or implied by the forward-looking statements.
- Our financial results depend entirely upon the agricultural
industry, and factors that adversely affect the agricultural
industry generally, including declines in the general economy,
adverse weather, tariffs, increases in farm input costs, lower
commodity prices, lower farm income and changes in the availability
of credit for our retail customers, will adversely affect us.
- We maintain an independent dealer and distribution network in
the markets where we sell products. The financial and operational
capabilities of our dealers and distributors are critical to our
ability to compete in these markets. Higher inventory levels at our
dealers and high utilization of dealer credit limits as well as the
financial health of our dealers could negatively impact future
sales and adversely impact our performance.
- On April 1, 2024, we completed
the acquisition of the ag assets and technologies of Trimble
through the formation of a joint venture, PTx Trimble, of which we
own 85%. Financing the PTx Trimble transaction significantly
increased our indebtedness and interest expense. We also have made
various assumptions relating to the acquisition that may not prove
to be correct and we may fail to realize all of the anticipated
benefits of the acquisition. All acquisitions involve risk, and
there is no certainty that the acquired business will operate as
expected. Each of these items, as well as similar
acquisition-related items, would adversely impact our
performance.
- A majority of our sales and manufacturing takes place outside
the United States, and many of our
sales involve products that are manufactured in one country and
sold in a different country. As a result, we are exposed to risks
related to foreign laws, taxes and tariffs, trade restrictions,
economic conditions, labor supply and relations, political
conditions and governmental policies. These risks may delay or
reduce our realization of value from our international operations.
Among these risks are the uncertain consequences of Brexit and
tariffs imposed on exports to and imports from China.
- We cannot predict or control the impact of the conflict in
Ukraine on our business. Already
it has resulted in reduced sales in Ukraine as farmers have experienced economic
distress, difficulties in harvesting and delivering their products,
as well as general uncertainty. There is a potential for natural
gas shortages, as well as shortages in other energy sources,
throughout Europe, which could
negatively impact our production in Europe both directly and through interrupting
the supply of parts and components that we use. It is unclear how
long these conditions will continue, or whether they will worsen,
and what the ultimate impact on our performance will be. In
addition, AGCO sells products in, and purchases parts and
components from, other regions where there could be hostilities.
Any hostilities likely would adversely impact our performance.
- Most retail sales of the products that we manufacture are
financed, either by our joint ventures with Rabobank or by a bank
or other private lender. Our joint ventures with Rabobank, which
are controlled by Rabobank and are dependent upon Rabobank for
financing as well, finance approximately 50% of the retail sales of
our tractors and combines in the markets where the joint ventures
operate. Any difficulty by Rabobank to continue to provide that
financing, or any business decision by Rabobank as the controlling
member not to fund the business or particular aspects of it (for
example, a particular country or region), would require the joint
ventures to find other sources of financing (which may be difficult
to obtain), or us to find another source of retail financing for
our customers, or our customers would be required to utilize other
retail financing providers. As a result of the recent economic
downturn, financing for capital equipment purchases generally has
become more difficult in certain regions and in some cases, can be
expensive to obtain. To the extent that financing is not available
or available only at unattractive prices, our sales would be
negatively impacted. In addition, Rabobank also is the lead lender
in our revolving credit facility and term loans and for many years
has been an important financing partner for us. Any interruption or
other challenges in that relationship would require us to obtain
alternative financing, which could be difficult.
- Both AGCO and our finance joint ventures have substantial
accounts receivable from dealers and end customers, and we would be
adversely impacted if the collectability of these receivables was
less than optimal; this collectability is dependent upon the
financial strength of the farm industry, which in turn is dependent
upon the general economy and commodity prices, as well as several
of the other factors listed in this section.
- We have experienced substantial and sustained volatility with
respect to currency exchange rate and interest rate changes, which
can adversely affect our reported results of operations and the
competitiveness of our products.
- Our success depends on the introduction of new products,
particularly engines that comply with emission requirements and
sustainable smart farming technology, which require substantial
expenditures; there is no certainty that we can develop the
necessary technology or that the technology that we develop will be
attractive to farmers or available at competitive prices.
- Our expansion plans in emerging markets, including establishing
a greater manufacturing and marketing presence and growing our use
of component suppliers, could entail significant risks.
- Our business increasingly is subject to regulations relating to
privacy and data protection, and if we violate any of those
regulations, or otherwise are the victim of a cyberattack, we could
be subject to significant claims, penalties and damages.
- Cybersecurity breaches including ransomware attacks and other
means are rapidly increasing. We continue to review and improve our
safeguards to minimize our exposure to future attacks. However,
there always will be the potential of the risk that a cyberattack
will be successful and will disrupt our business, either through
shutting down our operations, destroying data, exfiltrating data or
otherwise.
- We depend on suppliers for components, parts and raw materials
for our products, and any failure by our suppliers to provide
products as needed, or by us to promptly address supplier issues,
will adversely impact our ability to timely and efficiently
manufacture and sell products. In addition, the potential of future
natural gas shortages in Europe,
as well as predicted overall shortages in other energy sources,
could also negatively impact our production and that of our supply
chain in the future. There can be no assurance that there will not
be future disruptions.
- Any resurgence of COVID-19, or other future pandemics, could
negatively impact our business through reduced sales, facilities
closures, higher absentee rates, and reduced production at both our
plants and the plants that supply us with parts and components. In
addition, logistical and transportation-related issues and similar
problems may also arise.
- We recently have experienced significant inflation in a range
of costs, including for parts and components, shipping, and energy.
While we have been able to pass along most of those costs through
increased prices, there can be no assurance that we will be able to
continue to do so. If we are not, it will adversely impact our
performance.
- We face significant competition, and if we are unable to
compete successfully against other agricultural equipment
manufacturers, we would lose customers and our net sales and
performance would decline.
- We have a substantial amount of indebtedness (and have incurred
additional indebtedness as part of the PTx Trimble joint venture
transaction), and, as a result, we are subject to certain
restrictive covenants and payment obligations, as well as increased
leverage generally, that may adversely affect our ability to
operate and expand our business.
Further information concerning these and other factors is
included in AGCO's filings with the Securities and Exchange
Commission, including its Form 10-K for the year ended December 31, 2023, and subsequent Form 10-Qs.
AGCO disclaims any obligation to update any forward-looking
statements except as required by law.
* * * * *
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture
and distribution of agricultural machinery and precision ag
technology. AGCO delivers value to farmers and OEM customers
through its differentiated brand portfolio including core brands
like Fendt®, GSI®, Massey Ferguson®, PTx and Valtra®. AGCO's full
line of equipment, smart farming solutions and services helps
farmers sustainably feed our world. Founded in 1990 and
headquartered in Duluth, Georgia,
USA, AGCO had net sales of approximately $14.4 billion in 2023. For more information,
visit www.agcocorp.com. For company news, information, and events,
please follow us on X: @AGCOCorp. For financial news on X, please
follow the hashtag #AGCOIR.
Please visit our website at www.agcocorp.com
AGCO
CORPORATION
|
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
(unaudited and in
millions)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
657.3
|
|
$
595.5
|
Accounts and notes
receivable, net
|
1,465.9
|
|
1,605.3
|
Inventories,
net
|
3,499.4
|
|
3,440.7
|
Other current
assets
|
583.1
|
|
699.3
|
Current assets held
for sale
|
433.0
|
|
—
|
Total current
assets
|
6,638.7
|
|
6,340.8
|
Property, plant and
equipment, net
|
1,802.1
|
|
1,920.9
|
Right-of-use lease
assets
|
168.4
|
|
176.2
|
Investments in
affiliates
|
518.3
|
|
512.7
|
Deferred tax
assets
|
499.0
|
|
481.6
|
Other assets
|
442.3
|
|
346.8
|
Noncurrent assets held
for sale
|
448.3
|
|
—
|
Intangible assets,
net
|
689.9
|
|
308.8
|
Goodwill
|
2,451.5
|
|
1,333.4
|
Total
assets
|
$
13,658.5
|
|
$
11,421.2
|
|
|
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS'
EQUITY
|
Current
Liabilities:
|
|
|
|
Borrowings due within
one year
|
$
320.2
|
|
$
15.0
|
Accounts
payable
|
1,075.7
|
|
1,207.3
|
Accrued
expenses
|
2,543.1
|
|
2,903.8
|
Other current
liabilities
|
154.2
|
|
217.5
|
Current liabilities
held for sale
|
270.3
|
|
—
|
Total current
liabilities
|
4,363.5
|
|
4,343.6
|
Long-term debt, less
current portion and debt issuance costs
|
3,595.2
|
|
1,377.2
|
Operating lease
liabilities
|
127.4
|
|
134.4
|
Pension and
postretirement health care benefits
|
164.7
|
|
170.5
|
Deferred tax
liabilities
|
111.5
|
|
122.6
|
Other noncurrent
liabilities
|
666.0
|
|
616.1
|
Noncurrent liabilities
held for sale
|
27.9
|
|
—
|
Total
liabilities
|
9,056.2
|
|
6,764.4
|
Redeemable
noncontrolling interests
|
548.4
|
|
—
|
Stockholders'
Equity:
|
|
|
|
AGCO Corporation
stockholders' equity:
|
|
|
|
Preferred
stock
|
—
|
|
—
|
Common
stock
|
0.7
|
|
0.7
|
Additional paid-in
capital
|
9.2
|
|
4.1
|
Retained
earnings
|
5,930.6
|
|
6,360.0
|
Accumulated other
comprehensive loss
|
(1,886.7)
|
|
(1,708.1)
|
Total AGCO
Corporation stockholders' equity
|
4,053.8
|
|
4,656.7
|
Noncontrolling
interests
|
0.1
|
|
0.1
|
Total
stockholders' equity
|
4,053.9
|
|
4,656.8
|
Total liabilities,
redeemable noncontrolling interests and stockholders'
equity
|
$
13,658.5
|
|
$
11,421.2
|
|
See accompanying notes
to condensed consolidated financial statements.
|
AGCO
CORPORATION
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited and in
millions, except per share data)
|
|
|
Three Months Ended June
30,
|
|
2024
|
|
2023
|
Net sales
|
$
3,246.6
|
|
$
3,822.7
|
Cost of goods
sold
|
2,409.1
|
|
2,817.0
|
Gross profit
|
837.5
|
|
1,005.7
|
Selling, general and
administrative expenses
|
379.8
|
|
350.3
|
Engineering
expenses
|
137.8
|
|
138.8
|
Amortization of
intangibles
|
31.7
|
|
14.1
|
Impairment
charges
|
5.1
|
|
—
|
Restructuring
expenses
|
30.2
|
|
6.1
|
Loss on business held
for sale
|
494.6
|
|
—
|
Income (loss) from
operations
|
(241.7)
|
|
496.4
|
Interest expense,
net
|
29.9
|
|
5.8
|
Other expense,
net
|
65.3
|
|
78.0
|
Income (loss) before
income taxes and equity in net earnings of affiliates
|
(336.9)
|
|
412.6
|
Income tax
provision
|
41.6
|
|
111.0
|
Income (loss) before
equity in net earnings of affiliates
|
(378.5)
|
|
301.6
|
Equity in net earnings
of affiliates
|
9.6
|
|
17.6
|
Net income
(loss)
|
(368.9)
|
|
319.2
|
Net loss attributable
to noncontrolling interests
|
1.8
|
|
—
|
Net income (loss)
attributable to AGCO Corporation and subsidiaries
|
$
(367.1)
|
|
$
319.2
|
Net income (loss) per
common share attributable to AGCO Corporation and
subsidiaries:
|
|
|
|
Basic
|
$
(4.92)
|
|
$
4.26
|
Diluted
|
$
(4.92)
|
|
$
4.26
|
Cash dividends declared
and paid per common share
|
$
2.79
|
|
$
5.28
|
Weighted average number
of common and common equivalent shares outstanding:
|
|
|
|
Basic
|
74.6
|
|
74.9
|
Diluted
|
74.7
|
|
75.0
|
|
See accompanying notes
to condensed consolidated financial statements.
|
AGCO
CORPORATION
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited and in
millions, except per share data)
|
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
Net sales
|
$
6,175.3
|
|
$
7,156.2
|
Cost of goods
sold
|
4,568.0
|
|
5,295.6
|
Gross profit
|
1,607.3
|
|
1,860.6
|
Selling, general and
administrative expenses
|
730.2
|
|
682.1
|
Engineering
expenses
|
268.7
|
|
258.4
|
Amortization of
intangibles
|
45.6
|
|
28.9
|
Impairment
charges
|
5.1
|
|
—
|
Restructuring
expenses
|
31.2
|
|
7.5
|
Loss on business held
for sale
|
494.6
|
|
—
|
Income from
operations
|
31.9
|
|
883.7
|
Interest expense,
net
|
31.8
|
|
6.3
|
Other expense,
net
|
116.1
|
|
128.4
|
Income (loss) before
income taxes and equity in net earnings of affiliates
|
(116.0)
|
|
749.0
|
Income tax
provision
|
110.7
|
|
231.2
|
Income (loss) before
equity in net earnings of affiliates
|
(226.7)
|
|
517.8
|
Equity in net earnings
of affiliates
|
25.8
|
|
34.0
|
Net income
(loss)
|
(200.9)
|
|
551.8
|
Net loss attributable
to noncontrolling interests
|
1.8
|
|
—
|
Net income (loss)
attributable to AGCO Corporation and subsidiaries
|
$
(199.1)
|
|
$
551.8
|
Net income (loss) per
common share attributable to AGCO Corporation and
subsidiaries:
|
|
|
|
Basic
|
$
(2.67)
|
|
$
7.37
|
Diluted
|
$
(2.67)
|
|
$
7.36
|
Cash dividends declared
and paid per common share
|
$
3.08
|
|
$
5.52
|
Weighted average number
of common and common equivalent shares outstanding:
|
|
|
|
Basic
|
74.6
|
|
74.9
|
Diluted
|
74.7
|
|
75.0
|
|
See accompanying notes
to condensed consolidated financial statements.
|
AGCO
CORPORATION
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited and in
millions)
|
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
(200.9)
|
|
$
551.8
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
Depreciation
|
128.5
|
|
110.1
|
Amortization of
intangibles
|
45.6
|
|
28.9
|
Stock compensation
expense
|
16.1
|
|
27.3
|
Impairment
charges
|
5.1
|
|
—
|
Loss on business held
for sale
|
494.6
|
|
—
|
Equity in net earnings
of affiliates, net of cash received
|
(25.1)
|
|
(33.3)
|
Deferred income tax
benefit
|
(25.2)
|
|
(22.6)
|
Other
|
19.4
|
|
13.7
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts and notes
receivable, net
|
(123.3)
|
|
(495.3)
|
Inventories,
net
|
(373.3)
|
|
(555.1)
|
Other current and
noncurrent assets
|
(62.1)
|
|
(241.1)
|
Accounts
payable
|
59.8
|
|
1.2
|
Accrued
expenses
|
(178.5)
|
|
128.7
|
Other current and
noncurrent liabilities
|
84.8
|
|
120.7
|
Total
adjustments
|
66.4
|
|
(916.8)
|
Net cash used in
operating activities
|
(134.5)
|
|
(365.0)
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property,
plant and equipment
|
(193.0)
|
|
(237.0)
|
Proceeds from sale of
property, plant and equipment
|
1.3
|
|
0.4
|
Purchase of
businesses, net of cash acquired
|
(1,902.2)
|
|
(0.9)
|
Investments in
unconsolidated affiliates, net
|
(0.2)
|
|
(26.2)
|
Other
|
(0.1)
|
|
(3.9)
|
Net cash used in
investing activities
|
(2,094.2)
|
|
(267.6)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
indebtedness
|
2,585.4
|
|
780.2
|
Repayments of
indebtedness
|
(1.7)
|
|
(11.4)
|
Payment of dividends to
stockholders
|
(229.9)
|
|
(414.1)
|
Payment of minimum tax
withholdings on stock compensation
|
(11.3)
|
|
(20.2)
|
Payment of debt
issuance costs
|
(15.2)
|
|
—
|
Investments by
noncontrolling interests, net
|
8.1
|
|
—
|
Net cash provided by
financing activities
|
2,335.4
|
|
334.5
|
Effects of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(24.9)
|
|
(27.9)
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
81.8
|
|
(326.0)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
595.5
|
|
789.5
|
Cash, cash equivalents
and restricted cash, end of period(1)
|
$
677.3
|
|
$
463.5
|
|
|
|
|
(1) Includes $20.0 million of cash
and cash equivalents classified as held for sale as of
June 30, 2024.
|
|
See accompanying notes
to condensed consolidated financial statements.
|
AGCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except share amounts, per share data)
1. ACCOUNTS RECEIVABLE SALES
AGREEMENTS
The Company has accounts receivable sales agreements that permit
the sale, on an ongoing basis, of a majority of its wholesale
receivables in North America,
Europe and Brazil to its U.S., Canadian, European and
Brazilian finance joint ventures. For the six months ended
June 30, 2024 and 2023, the cash
received from receivables sold under the U.S., Canadian, European
and Brazilian accounts receivable sales agreements was
approximately $2.4 billion and
$1.9 billion, respectively.
In addition, the Company sells certain trade receivables under
factoring arrangements to other financial institutions around the
world. During the six months ended June 30,
2024 and 2023, the cash received from these arrangements was
approximately $221.4 million and
$227.4 million, respectively.
Losses on sales of receivables associated with the accounts
receivable sales agreements discussed above, reflected within
"Other expense, net" in the Company's Condensed Consolidated
Statements of Operations, were approximately $35.9 million and $63.8
million during the three and six months ended June 30, 2024, respectively. Losses on sales of
receivables associated with the accounts receivable sales
agreements discussed above, reflected within "Other expense, net"
in the Company's Condensed Consolidated Statements of Operations,
were approximately and $30.3 million
and $58.8 million during the three
and six months ended June 30, 2023,
respectively.
The Company's finance joint ventures in Europe, Brazil and Australia also provide wholesale financing
directly to the Company's dealers. As of June 30, 2024 and December
31, 2023, these finance joint ventures had approximately
$187.7 million and $211.3 million, respectively, of outstanding
accounts receivable associated with these arrangements.
2. INVENTORIES
Inventories, net at June 30, 2024
and December 31, 2023, excluding
amounts classified as held for sale, were as follows (in
millions):
|
June 30,
2024
|
|
December 31,
2023
|
Finished
goods
|
$
1,605.1
|
|
$
1,460.7
|
Repair and replacement
parts
|
808.6
|
|
823.1
|
Work in
process
|
279.0
|
|
255.2
|
Raw
materials
|
806.7
|
|
901.7
|
Inventories,
net
|
$
3,499.4
|
|
$
3,440.7
|
3. INDEBTEDNESS
Long-term debt, excluding amounts classified as held for sale,
consisted of the following at June 30,
2024 and December 31, 2023 (in
millions):
|
June 30,
2024
|
|
December 31,
2023
|
Credit facility,
expires 2027
|
$
760.0
|
|
$
—
|
Term Loan Facility
borrowings
|
500.0
|
|
—
|
5.450% Senior notes due
2027
|
400.0
|
|
—
|
5.800% Senior notes due
2034
|
700.0
|
|
—
|
0.800% Senior notes due
2028
|
642.0
|
|
664.0
|
1.002% EIB Senior term
loan due 2025
|
267.5
|
|
276.7
|
EIB Senior term loan
due 2029
|
267.5
|
|
276.7
|
EIB Senior term loan
due 2030
|
181.9
|
|
—
|
Senior term loans due
between 2025 and 2028
|
156.8
|
|
162.1
|
Other long-term
debt
|
1.0
|
|
3.1
|
Debt issuance
costs
|
(13.0)
|
|
(3.1)
|
|
3,863.7
|
|
1,379.5
|
Less:
|
|
|
|
Current portion of
other long-term debt
|
(1.0)
|
|
(2.3)
|
1.002% EIB Senior term
loan due 2025
|
(267.5)
|
|
—
|
Total long-term
indebtedness
|
$
3,595.2
|
|
$
1,377.2
|
As of June 30, 2024 and
December 31, 2023, the Company had
short-term borrowings due within one year, excluding the current
portion of long-term debt, of approximately $51.7 million and $12.7
million, respectively.
European Investment Bank ("EIB") Senior Term Loan due
2030
On January 25, 2024, the Company
entered into an additional multi-currency Finance Contract with the
EIB permitting the Company to borrow up to €170.0 million. On
February 15, 2024, the Company
borrowed €170.0 million (or approximately $181.9 million as of June
30, 2024) under the arrangement. The loan matures on
February 15, 2030. Interest is
payable on the term loan at 3.416% per annum, payable semi-annually
in arrears.
5.450% Senior Notes due 2027 and 5.800%
Senior Notes due 2034
On March 21, 2024, the Company
issued (i) $400.0 million aggregate
principal amount of 5.450% Senior Notes due 2027 (the "2027 Notes")
and (ii) $700.0 million aggregate
principal amount of 5.800% Notes due 2034 (the "2034 Notes", and
together with the 2027 Notes, the "Notes"). The Notes are unsecured
and guaranteed on a senior unsecured basis, jointly and severally,
by certain direct and indirect subsidiaries of the Company. The
2027 Notes mature on March 21, 2027,
and interest is payable semi-annually, in arrears, at 5.450%. The
2034 Notes mature on March 21, 2034,
and interest is payable semi-annually, in arrears, at 5.800%.
Credit Facility and Term Loan Facility
The Company has a credit facility providing for a $1.25 billion multi-currency unsecured revolving
credit facility ("Credit Facility") that matures on December 19, 2027. Interest accrues on amounts
outstanding for any borrowings denominated in United States dollars, at the Company's
option, at either (1) the Secured Overnight Financing Rate ("SOFR")
plus 0.1% plus a margin ranging from 0.875% to 1.875% based on the
Company's credit rating, or (2) the base rate, which is the highest
of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus
0.5%, and (iii) Term SOFR for a one-month tenor plus 1.0%, plus a
margin ranging from 0.000% to 0.875% based on the Company's credit
rating. Interest accrues on amounts outstanding for any borrowings
denominated in Euros at the Euro Interbank Offered Rate ("EURIBOR")
plus a margin ranging from 0.875% to 1.875% based on the Company's
credit rating. As of June 30, 2024,
the Company had $760.0 million in
outstanding borrowings under the revolving credit facility.
In December 2023, the Company
amended the Credit Facility to allow for incremental borrowings in
the form of a delayed draw term loan facility in an aggregate
principal amount of $250.0 million.
In March 2024, the Company further
amended the Credit Facility to increase this amount by $250.0 million, for an aggregate amount of
$500.0 million ("Term Loan
Facility"). The Company drew down the Term Loan Facility on
March 28, 2024. Borrowings under the
Term Loan Facility bear interest at the same rate and margin as the
Credit Facility. The Term Loan Facility matures on December 19, 2027. As of June 30, 2024, the Company had $500.0 million outstanding under the Term Loan
Facility.
The increase in indebtedness as of June
30, 2024 compared to December 31,
2023 related to the PTx Trimble joint venture transaction
that closed on April 1, 2024. The
Company financed the joint venture transaction through a
combination of the Senior Notes due 2027 and 2034, the Term Loan
Facility and the remainder through other borrowings and cash on
hand.
4. RESTRUCTURING
EXPENSES
On June 24, 2024, the Company
announced a restructuring program in response to increased
weakening demand in the agriculture industry (the "Program"). The
initial phase of the Program is focused on further reducing
structural costs, streamlining the Company's workforce and
enhancing global efficiencies related to changing the Company's
operating model for certain corporate and back-office functions and
better leveraging technology and global centers of excellence. The
Company estimates that it will incur charges for one-time
termination benefits of approximately $150 million to $200
million in connection with this phase of the Program,
primarily consisting of cash charges related to severance payments,
employees benefits and related costs. The Company expects the
majority of these cash charges will be incurred in 2024 and the
first half of 2025. Once fully implemented, the Company expects
this phase of the Program to yield annual run-rate benefits and
cost savings of approximately $100
million to $125 million.
Additionally, in recent years, the Company announced and
initiated several actions to rationalize employee headcount in
various manufacturing facilities and administrative offices located
in the U.S., Europe, South America, Africa and Asia, in order to reduce costs in response to
fluctuating global market demand.
As of December 31, 2023, accrued
severance and other costs related to previous rationalizations were
approximately $7.8 million. During
the three and six months ended June 30,
2024, the Company recorded an additional $30.1 million and $31.2
million, respectively, of severance and related costs
primarily associated with the Program and paid approximately
$2.1 million and $5.5 million, respectively, of severance costs.
The $32.6 million of accrued
severance and other related costs as of June
30, 2024, inclusive of approximately $0.5 million of negative foreign currency
translation impacts, are expected to be paid primarily during the
next 12 months. As of June 30, 2024,
the Company reclassified $0.4 million
of accrued severance to current liabilities held for sale in the
Company's Condensed Consolidated Balance Sheets.
5. BUSINESS HELD FOR
SALE
On July 25, 2024, the Company
announced it had entered into a definitive agreement to sell its
Grain & Protein ("G&P") business, and as of June 30, 2024, the business met the criteria to
be classified as held for sale. The Company recognizes assets and
liabilities held for sale at the lower of carrying value or fair
market value less costs to sell. The Company determined the
intended sale of the G&P business does not represent a
strategic shift that will have a major effect on the consolidated
results of operations, and therefore results of this business were
not classified as discontinued operations. The results of the
G&P business are included within our North America, South
America, Europe/Middle
East and Asia/Pacific/Africa reportable segments. We expect to
receive proceeds of approximately $700.0
million from the sale, subject to customary working capital
and other adjustments. Upon classification as held for sale, the
Company recognized an impairment charge of $494.6 million, which represents the estimated
loss on the business held for sale, and is included within "Loss on
business held for sale" in the Company's Condensed Consolidated
Statements of Operations. The estimated loss includes $84.6 million of cumulative translation
adjustment losses related to the assets expected to be divested and
an estimate of costs to sell the business. The closing of the
transaction is subject to customary closing conditions and is
expected to be completed in the second half of 2024.
6. SEGMENT REPORTING
The Company has four operating segments that are also its
reportable segments, which consist of the North America, South
America, Europe/Middle
East and Asia/Pacific/Africa regions. The Company's reportable
segments are geography based and distribute a full range of
agricultural machinery and precision agriculture technology. The
Company evaluates segment performance primarily based on income
from operations. Sales for each segment are based on the location
of the third-party customer. The Company's selling, general and
administrative expenses and engineering expenses are generally
charged to each segment based on the region and division where the
expenses are incurred. As a result, the components of income from
operations for one segment may not be comparable to another
segment. Segment results for the three and six months ended
June 30, 2024 and 2023 are as follows
(in millions):
Three Months Ended June
30,
|
|
North
America
|
|
South
America
|
|
Europe/
Middle East
|
|
Asia/Pacific/
Africa
|
|
Total
Segments
|
2024
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
837.8
|
|
$
348.9
|
|
$
1,902.9
|
|
$
157.0
|
|
$
3,246.6
|
Income from
operations
|
|
76.7
|
|
12.6
|
|
288.5
|
|
12.4
|
|
390.2
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
996.8
|
|
$
598.6
|
|
$
1,990.8
|
|
$
236.5
|
|
$
3,822.7
|
Income from
operations
|
|
136.9
|
|
121.4
|
|
295.2
|
|
20.9
|
|
574.4
|
|
Six Months Ended June
30,
|
|
North
America
|
|
South
America
|
|
Europe/
Middle East
|
|
Asia/Pacific/
Africa
|
|
Total
Segments
|
2024
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,567.4
|
|
$
652.3
|
|
$
3,631.9
|
|
$
323.7
|
|
$
6,175.3
|
Income from
operations
|
|
119.1
|
|
28.8
|
|
571.4
|
|
20.4
|
|
739.7
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,919.9
|
|
$
1,102.4
|
|
$
3,694.6
|
|
$
439.3
|
|
$
7,156.2
|
Income from
operations
|
|
239.0
|
|
220.9
|
|
534.6
|
|
39.0
|
|
1,033.5
|
A reconciliation from the segment information to the
consolidated balances for income (loss) from operations is set
forth below (in millions):
|
Three Months Ended June
30,
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Segment income from
operations
|
$
390.2
|
|
$
574.4
|
|
$
739.7
|
|
$
1,033.5
|
Impairment
charges
|
(5.1)
|
|
—
|
|
(5.1)
|
|
—
|
Loss on business held
for sale
|
(494.6)
|
|
—
|
|
(494.6)
|
|
—
|
Corporate
expenses
|
(62.9)
|
|
(45.0)
|
|
(115.9)
|
|
(87.1)
|
Amortization of
intangibles
|
(31.7)
|
|
(14.1)
|
|
(45.6)
|
|
(28.9)
|
Stock compensation
expense
|
(7.4)
|
|
(12.8)
|
|
(15.4)
|
|
(26.3)
|
Restructuring
expenses
|
(30.2)
|
|
(6.1)
|
|
(31.2)
|
|
(7.5)
|
Consolidated income
(loss) from operations
|
$
(241.7)
|
|
$
496.4
|
|
$
31.9
|
|
$
883.7
|
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations,
adjusted operating margin, adjusted net income, adjusted net income
per share and net sales on a constant currency basis and excluding
a recent acquisition, each of which exclude amounts that are
typically included in the most directly comparable measure
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"). A reconciliation of each of those measures to
the most directly comparable GAAP measure is included below.
The following is a reconciliation of reported income (loss) from
operations, net income (loss) and net income (loss) per share to
adjusted income from operations, adjusted net income and adjusted
net income per share for the three and six months ended
June 30, 2024 and 2023 (in millions,
except per share data):
|
Three Months Ended June
30,
|
|
2024
|
|
2023
|
|
Income
(Loss) From
Operations
|
|
Net Income
(Loss)(1)
|
|
Net Income
(Loss) Per
Share(1)
|
|
Income From
Operations(2)
|
|
Net
Income(1)(2)
|
|
Net Income
Per Share(1)
|
As reported
|
$
(241.7)
|
|
$
(367.1)
|
|
$
(4.92)
|
|
$
496.4
|
|
$
319.2
|
|
$
4.26
|
Restructuring
expenses(3)
|
30.2
|
|
25.1
|
|
0.34
|
|
6.1
|
|
5.3
|
|
0.07
|
Amortization of PTx
Trimble
acquired intangibles(4)
|
18.2
|
|
11.5
|
|
0.15
|
|
—
|
|
—
|
|
—
|
Transaction-related
costs(5)
|
27.0
|
|
20.0
|
|
0.27
|
|
—
|
|
—
|
|
—
|
Impairment
charges(6)
|
5.1
|
|
5.1
|
|
0.07
|
|
—
|
|
—
|
|
—
|
Loss on business held
for sale(7)
|
494.6
|
|
494.6
|
|
6.62
|
|
—
|
|
—
|
|
—
|
Brazilian tax amnesty
program(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.2)
|
|
(0.04)
|
As adjusted
|
$
333.4
|
|
$
189.2
|
|
$
2.53
|
|
$
502.4
|
|
$
321.4
|
|
$
4.29
|
|
|
(1)
|
Net income (loss) and
net income (loss) per share amounts are after tax.
|
(2)
|
Rounding may impact
summation of amounts.
|
(3)
|
The restructuring
expenses recorded during the three months ended June 30, 2024
and June 30, 2023 related primarily to severance and other
related costs associated with the Company's Program and
rationalization of certain manufacturing facilities and
administrative offices.
|
(4)
|
Amortization of
intangibles related to intangibles acquired as part of the
Company's acquisition of PTx Trimble.
|
(5)
|
The transaction related
costs recorded during the three months ended June 30, 2024
related to the Company's acquisition of Trimble Inc.'s agriculture
business through the formation of the PTx Trimble joint venture and
to the announced divestiture of the Company's Grain & Protein
business.
|
(6)
|
The impairment charges
recorded during the three months ended June 30, 2024 related
to the impairment of certain amortizing intangible assets and an
investment in affiliate.
|
(7)
|
The Company classified
its Grain & Protein business as held for sale as of
June 30, 2024 and recorded a loss on business held for sale of
$494.6 million.
|
(8)
|
During the three months
ended March 31, 2023, the Company applied for enrollment in the
Brazilian government's "Litigation Zero" tax amnesty program
whereby cases being disputed at the administrative court level of
review for a period of more than ten years can be considered for
amnesty. During the three months ended June 30, 2023, the
Company updated its best estimate of U.S. income tax credits
associated with the ultimate settlement under the amnesty program
by recording a benefit within "Income tax provision" of
approximately $3.2 million.
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
|
Income From
Operations
|
|
Net Income
(Loss)(1)
|
|
Net Income
(Loss) Per
Share(1)
|
|
Income From
Operations
|
|
Net
Income(1)
|
|
Net Income
Per
Share(1)(2)
|
As reported
|
$
31.9
|
|
$
(199.1)
|
|
$
(2.67)
|
|
$
883.7
|
|
$
551.8
|
|
$
7.36
|
Restructuring
expenses(3)
|
31.2
|
|
25.8
|
|
0.35
|
|
7.5
|
|
6.3
|
|
0.08
|
Amortization of PTx
Trimble
acquired intangibles(4)
|
18.2
|
|
11.5
|
|
0.15
|
|
—
|
|
—
|
|
—
|
Transaction-related
costs(5)
|
33.2
|
|
24.6
|
|
0.33
|
|
—
|
|
—
|
|
—
|
Impairment
charges(6)
|
5.1
|
|
5.1
|
|
0.07
|
|
—
|
|
—
|
|
—
|
Loss on business held
for sale(7)
|
494.6
|
|
494.6
|
|
6.62
|
|
—
|
|
—
|
|
—
|
Brazilian tax amnesty
program(8)
|
—
|
|
—
|
|
—
|
|
—
|
|
26.4
|
|
0.35
|
As adjusted
|
$
614.2
|
|
$
362.5
|
|
$
4.85
|
|
$
891.2
|
|
$
584.5
|
|
$
7.80
|
|
|
(1)
|
Net income (loss) and
net income (loss) per share amounts are after tax.
|
(2)
|
Rounding may impact
summation of amounts.
|
(3)
|
The restructuring
expenses recorded during the six months ended June 30, 2024
and June 30, 2023 related primarily to severance and other
related costs associated with the Company's Program and
rationalization of certain manufacturing facilities and
administrative offices.
|
(4)
|
Amortization of
intangibles related to intangibles acquired as part of the
Company's acquisition of PTx Trimble.
|
(5)
|
The transaction related
costs recorded during the six months ended June 30, 2024
related to the Company's acquisition of Trimble Inc.'s agriculture
business through the formation of the PTx Trimble joint venture and
to the announced divestiture of the Company's Grain & Protein
business.
|
(6)
|
The impairment charges
recorded during the six months ended June 30, 2024 related to
the impairment of certain amortizing intangible assets and an
investment in affiliate.
|
(7)
|
The Company classified
its Grain & Protein business as held for sale as of
June 30, 2024 and recorded a loss on business held for sale of
$494.6 million.
|
(8)
|
During the six months
ended June 30, 2023, the Company applied for enrollment in the
Brazilian government's "Litigation Zero" tax amnesty program
whereby cases being disputed at the administrative court level of
review for a period of more than ten years can be considered for
amnesty. The Company recorded its best estimate of the ultimate
settlement under the amnesty program of approximately $26.4 million
within "Income tax provision" during the six months ended
June 30, 2023, net of associated U.S. income tax
credits.
|
The following is a reconciliation of adjusted operating margin
for the three and six months ended June 30,
2024 and 2023 (in millions):
|
Three Months Ended June
30,
|
|
Six Months Ended June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
$
3,246.6
|
|
$
3,822.7
|
|
$
6,175.3
|
|
$
7,156.2
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(241.7)
|
|
496.4
|
|
31.9
|
|
883.7
|
Adjusted income from
operations(1)
|
$
333.4
|
|
$
502.4
|
|
$
614.2
|
|
$
891.2
|
Operating
margin(2)
|
(7.4) %
|
|
13.0 %
|
|
0.5 %
|
|
12.3 %
|
Adjusted operating
margin(2)
|
10.3 %
|
|
13.1 %
|
|
9.9 %
|
|
12.5 %
|
|
|
(1)
|
Refer to the previous
table for the reconciliation of income (loss) from operations to
adjusted income from operations.
|
(2)
|
Operating margin is
defined as the ratio of income (loss) from operations divided by
net sales. Adjusted operating margin is defined as the ratio of
adjusted income from operations divided by net sales.
|
Adjusted targeted operating margin and earnings per share
excludes restructuring expenses, amortization of PTx Trimble
acquired intangible assets, transaction-related costs, impairment
charges and loss on business held for sale.
The following table sets forth, for the three and six months
ended June 30, 2024 and 2023, the
impact to net sales of currency translation and a recent
acquisition by geographical segment (in millions, except
percentages):
|
Three Months Ended June
30,
|
|
Change due to
currency
translation
|
|
Change due to
acquisition
of a business
|
|
2024
|
|
2023
|
|
% change
from 2023
|
|
$
|
|
%
|
|
$
|
|
%
|
North
America
|
$
837.8
|
|
$
996.8
|
|
(16.0) %
|
|
$
(1.6)
|
|
(0.2) %
|
|
$
25.1
|
|
2.5 %
|
South
America
|
348.9
|
|
598.6
|
|
(41.7) %
|
|
(15.2)
|
|
(2.5) %
|
|
3.1
|
|
0.5 %
|
Europe/Middle
East
|
1,902.9
|
|
1,990.8
|
|
(4.4) %
|
|
(14.6)
|
|
(0.7) %
|
|
34.1
|
|
1.7 %
|
Asia/Pacific/Africa
|
157.0
|
|
236.5
|
|
(33.6) %
|
|
(2.4)
|
|
(1.0) %
|
|
5.2
|
|
2.2 %
|
|
$ 3,246.6
|
|
$ 3,822.7
|
|
(15.1) %
|
|
$
(33.8)
|
|
(0.9) %
|
|
$
67.5
|
|
1.8 %
|
|
|
Six Months Ended June
30,
|
|
Change due to
currency
translation
|
|
Change due to
acquisition
of a business
|
|
2024
|
|
2023
|
|
% change
from 2023
|
|
$
|
|
%
|
|
$
|
|
%
|
North
America
|
$ 1,567.4
|
|
$ 1,919.9
|
|
(18.4) %
|
|
$
1.5
|
|
0.1 %
|
|
$
25.1
|
|
1.3 %
|
South
America
|
652.3
|
|
1,102.4
|
|
(40.8) %
|
|
(3.8)
|
|
(0.3) %
|
|
3.1
|
|
0.3 %
|
Europe/Middle
East
|
3,631.9
|
|
3,694.6
|
|
(1.7) %
|
|
9.2
|
|
0.2 %
|
|
34.1
|
|
0.9 %
|
Asia/Pacific/Africa
|
323.7
|
|
439.3
|
|
(26.3) %
|
|
(7.0)
|
|
(1.6) %
|
|
5.2
|
|
1.2 %
|
|
$ 6,175.3
|
|
$ 7,156.2
|
|
(13.7) %
|
|
$
(0.1)
|
|
— %
|
|
$
67.5
|
|
0.9 %
|
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SOURCE AGCO Corporation