AGCO’s 2024 net sales down 13.7%

AGCO, the parent company of Massey Ferguson, Fendt and Valtra, has reported net sales of $3.2bn for the second quarter of 2024, a decrease of 15.1% compared to the second quarter of 2023. The firm’s net sales for the first six months of 2024 were approximately $6.2bn, which is a decrease of 13.7% compared to 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.

“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 programme, 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,” said Eric Hansotia, AGCO’s chair, president and chief executive officer.

Machinery sales are down

AGCO noted that in the first half of 2024, retail tractor industry demand fell by an average of 8% across the three major regions.

In Western Europe, industry retail tractor sales decreased by 5% during the first six months of 2024 compared to the first six months of 2023 with the weakest conditions in Italy, the UK 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.

The North American industry retail tractor sales decreased 8% during the first six months of 2024 compared to the first six months of 2023, while combine unit sales were down 11% in the same period. 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.

South American industry retail tractor sales decreased 14% during the first six months of 2024 compared to the first six months of 2023. AGCO’s net sales for 2024 are expected to be approximately $12.5bn, down on last year’s record US$14.4bn, reflecting lower sales volumes and adverse foreign currency translation.