AGCO at Bank of America Conference: Strategic Growth Amid Challenges

On Tuesday, 17 March 2026, AGCO Corporation (NYSE:AGCO) presented at the Bank of America Global Industrials Conference 2026, outlining its strategic plans amidst a volatile global market. The discussion, led by CFO Damon Audia, highlighted AGCO’s strong financial performance and its commitment to innovation, while also addressing challenges such as tariffs and fluctuating commodity prices.

AGCO’s strategic focus on innovation and capital allocation positions it well for future growth. Readers are encouraged to refer to the full transcript for more detailed insights.

Michael Feniger, Machinery, Engineering and Construction Analyst: Michael Feniger, the Machinery, Engineering and Construction Analyst in the US. I’m happy to host AGCO. Greg and I were talking. We’ve been doing this for over a decade, and the rooms just keep getting bigger. Credit to you guys. Really happy to have AGCO here at the conference and to host them. They’re one of the leaders in the farm equipment space, which is a little different for a lot of the, you know, European investors relative to what you see in the capital goods space in Europe. With that said, I’m gonna actually pass it off to Greg, and they’ll introduce themselves, and we’ll jump into some Q&A. Greg.

Greg Peterson, Investor Relations, AGCO: Greg Peterson. I handle investor relations for AGCO, have done for almost 20 years. Prior to that, other investor relations roles outside of our industry.

Damon Audia, Chief Financial Officer, AGCO: Well, good morning. I’m Damon Audia, the Chief Financial Officer for AGCO, and I’m coming up on four years in the position here.

Michael Feniger, Machinery, Engineering and Construction Analyst: Great. Thank you for being here.

Damon Audia, Chief Financial Officer, AGCO: Yeah, of course.

Michael Feniger, Machinery, Engineering and Construction Analyst: Well, maybe just to kick it off and bring everyone online and in person on the same page, when you think of the farm equipment space, Deere is usually the first name that comes to mind, particularly in the U.S. For investors that are new to this space, new to AGCO, where does AGCO fit into the ecosystem when you think of the global farm equipment industry?

Damon Audia, Chief Financial Officer, AGCO: Yeah, sure. Maybe I’ll give a little bit of a backdrop here. AGCO is the largest pure play agricultural equipment company in the world. Unlike our two other global competitors, we don’t play in the construction business, so we are purely focused on ag. We go to market on the equipment side under three primary equipment brands. Fendt, which is our premium brand, and then Massey Ferguson and Valtra, and those play more in volume-oriented segments of the market. Those three on the equipment side. Then with our strategic joint venture with Trimble that we did in 2024, where we own 85%, we combine that with our other technology businesses under a technology umbrella called PTX, so Precision Technologies Multiplied.

That basically covers all of our technology that we sell to our AGCO OEM equipment part, but we also sell to 100 other OEMs, and we sell in a unique differentiated retrofit channel, and we take that technology straight to the farmers first through this differentiated channel, and we’ll touch on that. When you look at those brands and the PTx Trimble or the PTx umbrella, last year we delivered revenues just over $10 billion. Sitting in the trough of our industry last year, we delivered adjusted operating margins of 7.7%, which were almost double what they were the last time the industry was at this level. We did that through an array of strategic changes in how our CEO has transformed this company, where we have really focused on bringing our Fendt brand into North and South America.

We’ve doubled down on our parts business, so leveraging things like e-commerce, having the industry-leading fill rates in North America and in Europe, but then also growing our technology stack. As I mentioned, bringing on the Trimble joint venture, growing our Precision Planting business, all of those things, improving the profitability of our business, while at the same time driving incremental growth. If I look at last year, in addition to the adjusted operating margins, we generated a record free cash flow of $740 million. Really positioning ourselves in a much more profitable position than we were the last time the industry was at this level back in 2016.

Michael Feniger, Machinery, Engineering and Construction Analyst: Perfect. Look, the world’s as uncertain as ever. You were formerly the CFO of Kennametal. A lot of members in the audience will know Kennametal well as a peer to Sandvik. Obviously, that’s short cycle. That’s PMIs. It’s industrial production type of stock and sentiment. If you could help everyone for AGCO, what is mostly tied to those farmer purchases? What are the drivers of farmer equipment purchases that we should keep an eye out for, as we’ve gone through an upswing, and now obviously we’ve been in more of a downturn the last few years?

Damon Audia, Chief Financial Officer, AGCO: Yeah. Well, at the highest level, net farm income is the biggest driver to a farmer willingness to engage in upgrading his or her equipment. It’s important that when you hear the profitability or the net farm income, you’ve got to unpack it, because depending on how that’s driven, in many ways, in many parts of the world can influence the farmer’s desire or willingness to purchase. When we look at it, what we would say is commodity prices are by far the most important thing, ’cause that’s what’s giving the farmer confidence or comfort as he or she sells their grain into the market. The biggest part is gonna be what are the commodity prices, which can be influenced by stock-to-use ratios, weather events, global trade dynamics.

You look at commodity prices first, and then you look at your input costs second. Obviously, a lot going on in the world right now. You’ve heard a lot about fertilizer prices going up, but they’ve been going up for a while. Seed prices have been going up. And so when that farmer looks at what he or she is selling their grain at versus what their input costs are, creating that net farm income is really the catalyst for reinvestment. Now, here in Europe, farmers get a lot of subsidies from their government. Those are fairly stable and consistent, so their order patterns tend to be more consistent because they have a base that they can rely heavily on. When you look at the U.S. farmers, the subsidies tend to be more infrequent.

Even in the U.S., you’ve heard about some of the subsidies given to the U.S. farmers. Because those are not consistent, the farmers are less willing to invest that money into equipment, but using those sort of subsidies, because they’re one-time in nature, to pay down their debt, buy their seeds, do the things they have to do rather than upgrading their equipment, which they’d like to do. That can fluctuate. It can improve the net farm income, but it doesn’t necessarily translate into equipment demand. We’ve got to see commodity prices strong, input costs hopefully stable or lower, driving net farm income. Then you get to some of the secondary things about the age of their equipment.

Interest rates can influence that because as a farmer is trading in a piece of equipment, he or she’s likely going to be borrowing some money. Interest rates can influence that. But those are much more secondary effects versus that net farm income.

Michael Feniger, Machinery, Engineering and Construction Analyst: I’m curious, obviously, it’s been a volatile two-week period. When we think of some of these moving pieces, you know, obviously with Iran war and the conflict, you know, you’re seeing really outsized moves. You’re seeing outsized moves when it comes to certain chemicals, certain fertilizers. Obviously it also depends on the timing in terms of harvest and planting. Just when we sit here today, when we see soybeans have had a nice move higher, corn’s actually breaking out a little bit it looks like, but also seeing these inputs, how should we put that all together to think about what are the farmers thinking and watching right now?

Damon Audia, Chief Financial Officer, AGCO: Yeah. Well, I think the global environment we’re operating in creates a lot of uncertainty.

Michael Feniger, Machinery, Engineering and Construction Analyst: Mm-hmm.

Damon Audia, Chief Financial Officer, AGCO: Generally speaking, when there’s uncertainty, that’s reasons for farmers to pause in making large investments. We saw that in the U.S. last year during the trade dynamics between the U.S. and China. Again, farmers sort of conservatism in waiting to see what had happened. Whenever you see an event like this happen, and we’ll talk about some of the near term and medium term effects, that just creates another reason to pause to see what’s going to happen. What are my costs going to be? Who’s going to buy my grain, and when will they buy my grain? All of that uncertainty creates reasons to hesitate. If I look at the events themselves, obviously the nearest term issue for the farmers dealing with are diesel cost.

Michael Feniger, Machinery, Engineering and Construction Analyst: Hmm.

Damon Audia, Chief Financial Officer, AGCO: You know, with the event in Iran and how that’s affected the gas prices or diesel prices, farmers are gonna be paying a little bit more for running their operations right now. In the grand scheme of it, in the grand scheme of the farmer’s cost, it’s probably not going to make a decision to buy or not buy, but it’s one more thing when we think about that net farm income. If fuel costs have gone up by, pick a number, 10%, that reduces or compresses his or her net farm income, and thus their willingness to have excess cash to invest elsewhere. That’s the near term, and that’s gonna affect most farmers around the world. The bigger issue is going to be fertilizer. Again, you’ve