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AGCO Reports Third Quarter Results

AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide manufacturer and distributor of agricultural equipment, reported net sales of approximately $2.3 billion for the third quarter of 2012, an increase of approximately 9.3% compared to net sales of $2.1 billion for the third quarter of 2011. Reported and adjusted net income per share were $0.96 for the third quarter of 2012. These results compare to reported and adjusted net income per share of $0.87 for the third quarter of 2011. Excluding unfavorable currency translation impacts of approximately 11.0%, net sales in the third quarter of 2012 increased approximately 20.3% compared to the same period in 2011.

Net sales for the first nine months of 2012 were approximately $7.3 billion, an increase of approximately 16.0% compared to the same period in 2011. Excluding the unfavorable impact of currency translation of approximately 9.2%, net sales for the first nine months of 2012 increased approximately 25.2% compared to the same period in 2011. For the first nine months of 2012, reported and adjusted net income per share were $4.25. These results compare to reported and adjusted net income per share of $3.04 for the first nine months of 2011.

Third Quarter Highlights

  • Organic sales growth for Q3 2012 vs Q3 2011 was 9.9%, with the strongest growth coming from North and South America (1)
    • Regional organic sales increases: North America 20.8%; Europe/Africa/ Middle East (EAME) 5.2%; South America 9.6%; and Asia/Pacific 23.5% (1)
  • Q3 2012 operating margins improved to 6.1% vs 5.4% in Q3 2011 despite heavy factory start-up costs
    • North and South American operating margins showed the most improvement
  • Fendt’s new assembly facility opened in Marktoberdorf, Germany in September

(1) Excludes unfavorable currency translation and acquisition impacts

“AGCO took advantage of strong global agricultural fundamentals and reported record sales in the third quarter,” stated Martin Richenhagen, Chairman, President and Chief Executive Officer. “We also posted improved margins despite the costs associated with the opening of our new assembly facility in Germany and ongoing market development activities in China. The new Fendt assembly facility provides AGCO with the most modern, efficient and technology-advanced agricultural tractor manufacturing facility in the industry. We expect our new assembly process to lower manufacturing costs and significantly increase Fendt’s tractor capacity. To ensure that new tractor production meets Fendt’s high quality standards, we have slowed the fourth quarter production ramp. The lower build rate will impact Fendt sales for the remainder of the year. Higher sales levels, new product introductions, the execution of efficiency programs in our factories, and lower material costs all contributed to solid operating margin improvement in both North and South America during the third quarter.”

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