AGCO Corporation Citi’s 2026 Global TMT Conference

Okay, great. Welcome, everybody. AGCO is the largest pure-play farm machinery and technology company in the world. We are focused on farm machines and technology. We do not sell golf equipment or construction equipment or anything else. We are totally focused on the farmer. Over the last five or six years, we built a strategy for the next chapter that we aim to be the most farmer-focused company in the industry. You say, "Well, what does that mean?" Essentially, it has informed our technology strategy, it informed our distribution strategy, and informed our data platform. Kyle, you are asking about portfolio changes. Essentially, out of that came a few portfolio shifts. First of all, we globalized our most premium brand. That is the one that is loaded with technology, that is Fendt. Fendt sits at the very top of the market for the most demanding customers. It used to be European.

Now we have it growing in North America and South America. We can talk about that more later. Secondly, we built out. We aim to be the trusted partner for industry-leading smart farming solutions. Essentially built a tech platform. Over the last several years, we have invested in six M&A acquisitions all around tech. We heavily loaded up on our engineering and on the path, now we see ourselves as the market leader in autonomy and the market leader in precision ag, especially in the retrofit environment. What does that mean? That means we sell technology through a whole separate dealer channel to upgrade an existing piece of machinery with new capability, automate a given function. That was the second one, build out our technology. Third one, as we did that, we sold off our grain and protein business. That was our lowest growth, lowest margin business.

Finally, we exited a relationship with TAFE that was problematic for a number of years and constrained us on capital allocation. In addition to those portfolio changes, we launched FarmerCore, which is a redesign of the distribution approach. The whole industry operates on a very brick-and-mortar approach, where the farmer has to come to the dealer to research the machine, buy the machine, get their parts, get their service. We flipped that 180 degrees and said, "We want to be the most farmer-focused. We are going to come to the farm and do the work." In just the last couple of years since we have rolled it out, our dealers now are at 65% of the work being done on-farm instead of at the shop, and our leading dealers are at 75%.

When these dealers do that, they have a 4.5 point higher Net Promoter Score and 1.5 points more market share. Farmers like it. Finally, something called Project Reimagine. That is self-help, taking our own cost structure and shrinking it. We had about $1 billion in overhead. We took $200 million out of that through offshoring, outsourcing, automating. That is a quick flyby of the big changes over the last few years.

Kyle, I would like to say new CFO, but not new to AGCO. I joined AGCO two and a half years ago in the chief accounting officer role, but it was more than always a chief accounting officer role. It was more than accounting, reporting, and controls. I was intimately part of FP&A, the M&A space, as well as the Project Reimagine transformation that Erik's talked about. So been part of the AGCO journey, part of the AGCO strategy. For me, even though we say it's a new CFO, it's a continuation of the journey. It's all about disciplined, focused execution. Capital allocation, I think I would want to say it right outset that the capital allocation strategy remains unchanged.

We've always had a very balanced capital allocation structure where we invest in our business, we protect our engineering investments, we maintain an investment-grade balance sheet, and we pursue targeted technology capability and opportunities, and we return capital to shareholders. In the second quarter, we completed $345 million in share repurchase, which included $50 million of Tractors and Farm Equipment Limited participation. Erik talked about it. Having put the Tractors and Farm Equipment Limited story behind us gives us a lot of operational flexibility in terms of capital allocation. It doesn't change the financial discipline, but it does give us that flexibility. When we think about M&A, I would say we have a bias in pursuing technology opportunities that help us either accelerate that precision ag roadmap or strengthen our data and our software layer. Between that and share buyback, it's not mutually exclusive.

We will assess, and we will pace based on what is cash generation, liquidity, operating needs, leverage, and we will assess what is the value of the opportunity set that is out there. We take a lot of pride in maintaining our investment-grade balance sheet because that's very core to how we can invest as well as navigate any downturn in an ag cycle. Very balanced, and we'll stay very disciplined.

There's probably three things that are different about our innovation. Number one, we have the broadest portfolio. We have solutions all the way around the cropping cycle, from analyzing soil properties automatically. Planting, we are the planter experts. Targeted spraying, AI solutions that can see the difference between a weed and a plant and just spray the weed. Harvesting solutions, data platform, leader in autonomy, water management solutions, a lot of stuff. So broadest platform. Number two, open and mixed fleet. Essentially when we look at the market, we see every farmer as somebody we want to serve, not just going back to the brand of people who bought from us in the past. So we will sell on a competitive piece of equipment, an upgrade, could be a 5-year-old piece of machinery, 7-year-old piece of machinery, give that machine new life, new capability through automating a function.