AGCO at Citi’s 2025 Conference: Strategic Growth and Restructuring

On Thursday, 04 September 2025, AGCO Corporation (NYSE:AGCO) outlined its strategic initiatives at Citi’s 2025 Global Technology, Media and Telecommunications Conference. The company emphasized growth in its Precision Technologies Multiplied (PTX) business, a billion-dollar share buyback, and cost-saving measures. While AGCO aims for a mid-cycle margin improvement, the restructuring efforts and exit from certain business segments present both opportunities and challenges.

Key Takeaways

• AGCO plans to expand PTX revenue from $900 million to $2 billion by 2029.
• A $1 billion share buyback program was announced.
• The company targets $200 million in cost savings by 2026.
• AGCO aims for mid-cycle margins of 14% to 15% by 2029.
• The acquisition of Trimble Ag assets is crucial for PTX growth.

Financial Results

AGCO reported sales of approximately $11.5 billion last year, with half of the sales in Europe and 25% in North America. The company announced a $1 billion share buyback program as part of its strategy to deliver value to shareholders. AGCO aims to achieve mid-cycle margins of 14% to 15% by 2029, with a forecasted trough margin of 7.5% for the current year.

Operational Updates

AGCO is executing a restructuring program with 700 projects, half of which are already implemented. The company is targeting $200 million in savings by 2026 through offshoring, outsourcing, and automation. AGCO is also redesigning its distribution strategy via the FarmerCore initiative, aiming to create a digital, service-oriented experience for customers.

Future Outlook

The PTX business is expected to grow significantly, representing nearly 20% of total sales at the $2 billion revenue mark by 2029. AGCO is focusing on open and mixed-fleet solutions, differentiating itself by offering technology compatible with various brands. The company also plans to expand its Fendt brand into North and South America and enhance its service and parts business through e-commerce and AI-driven recommendations.

Q&A Highlights

During the Q&A, CEO Eric Ansodia highlighted the limited competition in the retrofit market, with AGCO standing out due to its brand-agnostic technology. The EMEA market is expected to see growth, and the recent launch of Starlink at Farm Progress aims to improve AGCO’s data platform connectivity.

For a detailed understanding of AGCO’s strategies and outlook, readers are encouraged to refer to the full conference call transcript.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Kyle, Interviewer: And I’m joined by AGCO. Thanks for being here at our tech conference. I think this is the third year in a row now. Yeah. So I’m joined by CEO, Eric Ansodia CFO, Damon Audia.

Eric, I think you wanted to go through the the slide first, quick overview, and we’ll then we’ll jump into q and a.

Eric Ansodia, CEO, AGCO: Yeah. You bet. So just briefly, you know, to to let everybody have a a common foundation, AGCO is the largest pure play farm equipment company in the world. That means all we do every day and ever is is figure out how do we can serve farmers better. We have a machinery business with multiple brands going after different segments of the market.

But for this conference, we also are focusing on our tech business. We call that PTX, Precision Technologies Multiplied. The combination of those two last year was about 11 and a half billion in sales. About half our sales are in North are are in Europe, 25% in North America, and the balance between South America and Asia Africa. So that’s kinda what we are.

There’s a number of strategic moves that we’ve made over the last couple of years that are really coming together now. Those are shown on this slide. I’ll just walk through them. This PTX business is something that has been in the making for a few years. We started with buying Precision Planting.

We bought six other small tech companies, doubled our engineering budget, but then it really got a boost about a year and a half ago when we bought Precision, the the Trimble Ag Precision Ag assets and move those into PTX. So now that’s a business of over $900,000,000 growing to 2,000,000,000 by 2029. That was our first big move in in really delivering on our vision to become the trusted partner for industry leading smart farming solutions. It also allowed us to then exit out of our lowest growth, lowest margin business, which was green and protein solutions. We finished that last year.

Third one was eliminating the entanglement we had with Taffy. We’ve changed our supplier source, but more importantly for investors, we’ve now are allowed to do share buybacks. We’ve announced the biggest share buyback in our history, a billion dollar share buyback, because we no longer are worried about Tafee’s share concentration. They’re they were an owner and never wanted to do selling when we did share buybacks. Now they’ve agreed to do that as part of our exit agreement.

And so those are the two three portfolio moves. Last two is a restructuring program over the last year and a half, two years. We’ve been looking at everything that we do now that we have the portfolio we want and say, how do we offshore, outsource, or automate all of the work possible that we can? We’ve committed a $200,000,000 savings on a little over a billion dollar base. Significant overhead reduction by doing the work differently, and that’s well on track.

A whole log of projects that has not only a cost savings, but something that has to get better. Faster outcome, more features, something better for our customers, our dealers, our employees. And finally is farmer core. I’m really excited about this one is that’s a redesigning of the distribution strategy. Instead of brick and mortar mindset where the farmer has to come to a store, like much like customers going to the mall, we’ve flipped that on its ear and saying, we wanna come to the customer, have the business come to the customer.

So we’re we’ve invested in all the digital tools to make it like an Amazon experience instead of the mall experience, and working with our dealers to use service trucks instead of the the the stores to do all the work on farm. So we can explore any or all of those as we get into our discussion, Kyle, in the q and a.

Kyle, Interviewer: A lot to explore there. I mean, maybe we can segue into the Investor Day targets a little bit. You you guys had an Investor Day in December 2024. And I think the the biggest target was really the the new mid cycle margin targets going to 14% to 15% target for 2029. Maybe if we could just level set where we are today on that journey, where we’re at in the cycle as as well, and how do we get to those 2029 mid cycle margin targets?

Eric Ansodia, CEO, AGCO: Great place to start. So if we look over we’re we’re a cyclical business. If we look over our last cycle, we were 4% at the trough, about 8% at the peak. We were like a 6% company. And so we said, we gotta do much better than that.

That’s what led to the strategy that would form many of the changes on the slide here. So through all of those structural changes, this year at the trough, our forecast is 7.5%. So we’re delivering about double the margins of our last trough and more closely to the last peak, as as where we stand today. Now we’re not done there yet. With these changes come further improvements.

And so to get from where we are today to the ultimate targets that we committed to last December, there’s essentially a walk of three or four things. Let’s use 2024 as the base. That we’re at about 90% of the average history of volume. We call that the mid cycle. So 90% of mid cycle was actual demand.

If we take our 2024 results up to mid cycle, that brings us to 10% as a starting point without changing anything else. So now from there, three things are structurally changing. Number one is the $200,000,000 restructuring that’s on this chart. That’s worth about a point and a half. Number two is the portfolio change that’s also on this chart.

That’s worth another point and a half, and that’s already done. And then number three is execution on the three high margin businesses that we have today. We call them high margin growth levers. One is growing PTX. Second is growing Fenton North America and South America, our premium brand, the best of the best products in the marketplace.

And number three is growing our service and parts business. The combination of those three high growth levers continuing to be a larger and larger portion of AGCO is another 0.5 to two points. So that gets us to that 14 to 15.

Kyle, Interviewer: And then maybe, double clicking on the cost savings. So you’ve got 200,000,000. I think there’s a certain number of projects you have identified. Maybe talk a little bit about those projects, where you’re at in the cost savings realization. And then is there anything incremental that you guys see on top of that 200,000,000 that you’ve identified?

Eric Ansodia, CEO, AGCO: Yeah. So it’s largely a focus on overhead costs, and it’s broken into three categories, outsourcing to our lower cost support centers in Hungary, India, and Brazil. I’m sorry. Offshoring to those three locations, outsourcing to service providers for things like payroll or IT support that we just feel are noncore, have somebody else do those for us, not only in lower cost, but areas where oftentimes they’ve already automated. They’re using AI to a heavy extent.

And then the third one is automating ourselves. We’ve we’ve built essentially an automation factory where there’s a group of cross functional people that takes projects in, prioritizes them, make sure that we’re handling data properly, cybersecurity properly, and then executing them. So that’s the how we’re doing it. We’ve got 700 projects that are being managed. There’s a team that supports that full time.

We review it weekly. About half of them are already implemented. The other half will be implemented between now and mid twenty six so that the results all show up by the ’26. Damon’s talked about the you know, what’s already hit a little bit last year, a fair bit this year, and a little bit next year so that we end up with a $200,000,000 total reset on the cost productions. We feel very confident in all of that.

Every one of those projects two comments. Every one of those projects has a cost savings, so you’ve got to do the thing at a lower cost. But we’ve also got to do that thing better. There’s gotta be we get a faster response, like a customer support response time. By using AI and serving up all that information to the customer support representative, we can respond faster to customers when they call in.

You know, instead of thirty minutes, it’s down to, like, three to five minutes. That’s an example. Instead of being five days a week, now we’re seven days twenty four for some of these solutions. So something’s gotta get better as well. So that’s what reimagine is all about.

Your other part of your question is, well, what’s behind that? What’s after that? We haven’t committed to any more numbers beyond that, but we’re already looking into what can we do with our components. We think we’ve got more opportunity in low cost country sourcing. We’ve got more opportunity behind that in in the use of AI.

I think we’re early days in that whole transition. So, you know, as those mature, we’ll be able to quantify those a little more clearly.

Kyle, Interviewer: Gotcha. And then just, I guess, one last question on on some of the Investor Day targets. I think one of the one of the key drivers as well to hit the targets is is 4% to 5% industry outgrowth. So what are going to be the biggest contributors to that 4% to 5%? Yeah.

Eric Ansodia, CEO, AGCO: If you go back to the things that drive margin, it’s many of those same things are driving growth. So the PTX business, as a reminder, that’s our tech business. It’s running in a separate channel from our machinery channel. So it’s a set of dealers that all they do, they don’t sell tractors or combines or planters, they just sell technology. And they are selling it off in a retrofit mode, meaning they’re gonna apply that module onto a machine the farmer already owns.

And it could be anybody’s brand. It could be John Deere, Case New Holland, or multiple other brands. And so the that whole channel is upgrading machinery in the field and we and it will grow. It’s 900,000,000 to 2,000,000,000. It’s a much faster growth rate than the rest of the industry.

So that’s one growth driver. Fent growing into North And South America is a second growth driver, where, we have been steadily increasing market share. We expect that to continue. It’s a brand that didn’t exist in those two markets before. It’s a actually market position that didn’t exist.

The very best of the best in the market is now a new position in the market and and, it’s it’s serving customers in a different way. So that’s a growth driver. And then the third is a larger share of wallet in service and parts by moving from reactive to proactive. We we were actually not that good at what was something we called parts fill rate, like five to ten years ago. A customer would come to the sir store, say I need this this item, we didn’t have the item and so then they’d they’d walk away and they’d lost confidence in in us as a service provider.

So we’ve got to get that foundation right. So we invested heavily in getting our parts fill up and we’re now industry leading, significant industry leading of anybody else, not measured by us but measured by Carlyle, both in Europe and North America. And even during COVID, that gap extended. So now the the market has high confidence that we’re a very reliable partner that is gonna have their part there for them. And we’re moving so that was the foundation.

But now we’re moving into ecommerce and AI. So ecommerce, we’re that’s growing rapidly. With online recommendation tools, we find that the purchase item that they make on the online tool is about 25% larger than what they would have bought in the store because they see other things that naturally go with the item that they’re originally gonna buy. And then recommendations, we’re using AI to look at the population in the field around a dealer and say, here’s the the amount of machines you have in your area of these certain ages. Here’s what we recommend you stock.

The dealers that have signed up for that, which is almost all of them now, have seen their inventory level go down, they’re not ordering the wrong parts, And their sales go up because they’re ordering all the right parts. So they’re much more efficient operators. So it’s a shift. Those combined with, remotely monitoring all of our connected fleet now, is all of our large ag is connected. We can anticipate maintenance intervals and and so we can say, hey, we see your five hundred hour service intervals coming up.

Would you like the kit of filters and oil and and everything else you need for that maintenance interval? If you make it easy for the customer, the customer often often buys. So those are examples of how we have confidence in our service business growing. It’s been steadily growing on that path already.

Kyle, Interviewer: Good to hear. I mean, since we are at a tech conference, it would be good to dive into the PTX business a little bit more and maybe just as people are thinking about how much PTX could be of the business, what percentage roughly of revenue would it be today? And then at that $2,000,000,000 target, what would that imply for percent of revenue?

Eric Ansodia, CEO, AGCO: Yeah, round numbers, it’s around 10% or just shy of 10% today. And we expect when we get up to $2,000,000,000 it’ll be almost 20% of the sales, much more than that of the margin because it’s a high margin business. So PTX goes to market, you know, just to remind the folks, it actually goes to market three different ways. PTX is a technology innovation developer, and that technology can go on our own machines, which is kind of similar to all of our competitors where it makes our tractors and our combines more intelligent. But the other two are unique.

The second one is this retrofit business I’ve talked about, where we’ve got this entire separate dealer network that all they do is sell retrofit technology modules onto existing machines and they do that for all brands, which is not only unique in our industry, it’s unique in most industries. You don’t see BMW making technology for a Mercedes or something like that. So we think this is a great way to serve all farmers regardless of what they’ve done in the past and and give them new capabilities. So that’s the second area and it’s it’s very unique. And the third one is also unique, where we serve other OEMs in the marketplace by selling them technology that they put out in their factory and then they sell to their to their customers.

We have well over a 100 tech customer partners, almost everybody who’s in ag except for except for deer is a customer of ours. And we provide them various solutions and our aim is to continue to earn their business and grow that business by doing a good job. We’re going to have a field tech days for them here in about four weeks, where we’re to show them all of the portfolio because many of them came to us through one of the companies that we bought. They don’t realize the breadth of the solutions that we have. So we’re going give them a view of all of

Kyle, Interviewer: the offerings and see if we can continue to grow that business. That’s great additional color. Maybe we can talk a little bit more about the Trimble deal, the largest precision ag deal in history, for you guys. Why did it make sense? What are the main synergies and just kind of where do we go from here?

Yeah.

Eric Ansodia, CEO, AGCO: Well, there’s a lot of tech out there, but it’s really careful to find the right tech with the right culture fit and the mindset and all that, so that it matches up together. And we felt the the Trimble Ag asset or team was exactly that. First of all, you’ve heard me mention many times this mixed fleet and retrofit mindset that we’re building. Well, Trimble was one of the only companies that also had that. They were a mixed fleet provider of what they delivered to the marketplace in terms of mixed fleet, guidance solutions.

They had kits out there that served 10,000 different models of machines, makes and models, all different ages, all different brands of of guidance equipment. They were heavy into the water management system. So now we’re a market leader in water management, above ground and below ground. So land leveling and tiling. So there was elements that we just weren’t in, and they had the right DNA mindset of let’s serve all farmers in a mixed fleet way.

It was the biggest group of ag technologists in the world that we could invite into the into the business. You know, we had we had these small bolt ons and those were great, but it’s a complicated way to grow your business. Each of them has a different set of culture and norms and systems and tools, And so, having one big group to bring in was a bit more efficient. So and then the last one is distribution. You know, we were heavy in North America with our precision planting retrofit technology business.

Trimble was strong in Europe and South America. So from a geography standpoint, it was a nice mix with very little overlap. Technology, very little overlap. DNA match, big group of folks that were focused on agriculture. So for for all those reasons, we were very excited about it.

And and probably one of the big ones that doesn’t get a lot of press is the data platform. The data platform is so if you think about farming, one thing is making the machine more intelligent, but as you keep doing that, that machine is generating data and it it has the ability to send that data back to a farm office and the farmer to be able to make analysis to make their farm run better. And so more and more farms were saying, hey, I really like your Fent tractor or combine or whatever, but you’re behind on your data platform. And they were right. We were behind.

So another big turbocharger that the the Trimble asset brought to us was a data platform. We we combined the Trimble team’s data platform with ours, and then we bought another company just for their data platform, PharmFax, put all of them together into one team. And now we just launched last week what we call PharmEngage. And our mission there is it’s going to be the best on the planet mixed fleet data platform. It’s gonna ingest data from any brand, let the farmer do the analysis, and then send data to any brand, and also interoperate with other data platforms.

So whether it’s op center or others, agronomists or seed salesmen, it’s a very open data platform. So that’s kind of a lot of reasons and they all point in the same direction for us.

Kyle, Interviewer: A lot of jumping off points there. Maybe maybe we just continue that on on that thread with the data platform, the farm engaged platform, which I got to see and hear about at Farm Progress recently. Sounds like this is gonna be available on all model year 26 machines. I mean, about how important that is. And then just how differentiated is this data platform versus some of the leading platforms out there, platforms from other OEMs?

And then just help us understand what elements of this are free for the farmer versus some that they might have to some features they might have to pay to unlock.

Eric Ansodia, CEO, AGCO: Okay. Yeah. So data platform is its importance keeps going up, up, up. And I I think that’s going to continue. Farms are continuing to consolidate and get larger.

Machines are continuing to get smarter. And so there’s just bigger fleets with more data and more and more often the farmer’s not in the machine. So they need to be able to remotely operate their operation and optimize it. And they’ve got more data to be able to do that, they got to have a tool to be able to do that simply because it’s a pretty complicated set of tasks. So that’s the first part was why is it important?

It’s becoming a bigger and bigger part of the buying decision. Secondly, where is it differentiated? Fundamentally, it’s the open platform, with the mixed fleet. Our our mission is that it can do the same tasks as others, but with a different it’s it’s designed from the ground up to be agnostic to brand. And so that’s our differentiator.

Very much like our PTX technology businesses, we’re We’re retrofit mindset, same thing with our data platform. And then the third element is on the commercial terms. With all Fenty equipment, it’ll come baked into base equipment, no extra charge for the first three years. That matches up with what we call our Gold Star program, where it’s, already industry leading protection for the customer.

Everything is handled. All the maintenance, all the repairs. If you’re down for more than a day, we bring you a loaner machine, and now you get PharmEngage all included in that package. So, after that, there’ll be a subscription, payment. And if you’re not part of a new machine, you can also take advantage of the platform, and there’s a a subscription fee for it.

Kyle, Interviewer: There are some upgrades. Right? I think Panorama was one of them. Like, maybe talk about that a little bit with Farmingage. What are some of

Eric Ansodia, CEO, AGCO: the upgrades that people can pay for to unlock? So over time, people don’t want what we wanna offer is a easy one stop shop. And today, farmers have to go a lot of different places to manage different parts of their farm. Panorama is the name of our soil sampling automation platform, where it automates taking the sample, it geo stamps them, puts them in an automated lab, automatically does all the 27 manual steps, and gives you how to report. Well, there’s a app that is the user interface for that.

Over time, we’re gonna merge all of those onto the common data platform of, I’m sorry. Panorama, I I think I interchanged two words there by by accident. So Panorama is our is our other platform that does agronomy diagnostics. So one is going to be for your farm operation to send tasks to the machine, pull them off. Panorama is really a deep insight into agronomy.

So taking a look at what I did with my planting and and spraying and how does that compare to yield example. So it’s an agronomy analytics tool that will run side by side with farm engagers as a farm management tool. Radical Agronomics is the one I started talking about that I accidentally interchange the wording. So, that’s the soil sampling tool. But we we see both of those working in harmony and and converging over time.

There’s a separate subscription for Panorama.

Kyle, Interviewer: So it sounds like there’s gonna be further iterations on this farm engaged platform to you’re gonna make it more cohesive over time. Maybe talk about where you’re at today versus where it’s going.

Eric Ansodia, CEO, AGCO: Yeah. We see kind of three waves today. If if you met I talked about all those groups that we brought together. We’ve brought all that functionality that each of them brought into one landscape, and we have a single sign on so people can navigate that entire, entire scope. Wave two will be to harmonize more of the user interface and and make it look like they didn’t come from different places, and add more features.

The wave three is to bring final set of features and really be have

Kyle, Interviewer: it become, industry leading. So you’ve just finished wave one? We’ve finished wave one. Windows wave two, Windows wave three.

Eric Ansodia, CEO, AGCO: We haven’t committed to timing on that, but roughly a year each. Okay.

Kyle, Interviewer: That’s helpful. And then the PTX synergy side, I know the distribution synergy is a key element of the deal. And you’ve talked about goals for growing your number of elite dealers, which is different than a traditional machinery dealer. So maybe just help us understand what an elite dealer looks like? How many of those dealers have you added since completing the Trimble deal?

What are the near term and long term goals for a number of those elite dealers you to bring on?

Eric Ansodia, CEO, AGCO: Yeah. So PTX has a a few elements. I talked about I’m gonna come to the dealers in second, but I’ll just kinda let set the stage. What did we need to change as we brought these businesses together? One is we need to remember I said one avenue to market was our own product.

We’ve gone from 2020% use of Trimble to over 90%. So that one’s done. That channel is essentially implemented. Then I said there’s this OEM channel, and I’ll and I’ll finalize on the one you’re asking about. OEM channel, we’ve retained all our OEM customers and our mission is to grow them.

So now it really is the the secret sauce is on this retrofit channel. And we’re establishing these separate tech dealers, and you and you can say, well, where are they coming from? Well, we already had a a a coverage of precision planting dealers. We had a coverage of Trimble Ag dealers. And so we’ve done a lot of analytics on that and saying, where do we wanna end up?

And we ideally like to have them cross selling and and selling the entire portfolio. That’s what we call a PTX Elite dealer. So I’m just kind of given the definition of what that means. Today, market is over 90% coverage in North America and Europe and about 80% coverage with one or the other, either precision planting dealer or a PTX Trimble dealer. So a farmer can get the get the products.

They just have to go to two different places still. So as we harmonize that and have usually as one buying out the one dealer buying out the other dealer and creating a combined portfolio. We’ve established about 44 of those so far. Our target is to get to about 75 of them by the end of the year, and we’re on track to being able to do that. These are not entirely in our control because you need two independent parties to kind of come to an agreement on on making that work out, but they all like the idea, it’s just working out the details and each one of them is a little bespoke because they’re coming from a different place.

They have different territories. There’s there’s a it’s a bit of a complex thing to sort through. But, that’s what we’re working on so that we can have a simpler interaction for our customers over time.

Kyle, Interviewer: Got it. And then I’ll ask one more question, then open up to the audience. I think it’s a bit hard at times for investors to wrap their head around just what are the current offerings in precision ag from some of the different OEMs. So maybe just touch on that a little bit. You know, what what tech do you guys have that maybe others don’t?

What have been some of the latest innovations or innovations in the pipeline that farmers and and you guys are most excited about?

Eric Ansodia, CEO, AGCO: Alright. So I’ll talk about some of the unique ones first, and then and then some of those are the exciting ones, and I’ll ask add a couple of other things. Some of the unique ones, we’re the leader in water management, where we we help the farmer manage above ground on land leveling and below ground on tile management. Water is becoming a bigger and bigger issue. You don’t have to read very deeply to understand that.

Number two is autonomy. Outrun kit is what our brand is. We got named the top innovation in North America last year by AE fifty. It’s for the application of the combine or the grain cart. Combine’s harvesting through the crop.

It summons the tractor tractor with no operator and it comes around, finds the combine, drives alongside the green cart. It gets filled by the combine. When the combine’s empty, it releases the tractor. Tractor drives off to the side of the road and unloads into. It can unload into the semi.

So that’s the application we’ve got now. We demoed in farm progress show the tillage application where that same technology module goes on to a tractor that’s doing tillage. So the fact the farmer brings the tractor to the field, says, here’s my field boundary, and, it will calculate 200 different path plans and offer up the best three. The farmer will pick kinda like when you’re doing your your travel on Google Maps, and you’ll say, do I want the fastest? Do I want the least least use of toll roads?

This one will say, do I want the least least fuel, fastest, whatever. They get a three, they’ll pick one, they say arm, they get off and and the tractor will till the entire field going around all the obstacles that are there and so on. And then we’ve got several applications behind that, they’ll be we can do them in in autonomous mode. So that’s one that’s that’s very exciting. Soil that I was talking about earlier, soil automated soil sampling.

Farmers put on twice as you know, if you add it all up around the world, they put on more fertilizer than they should. It’s one of their top costs. It would fill up a railcar that would go all the way around the planet, and yet only half of it gets absorbed by the plant. So half of it’s waste. Farmer just doesn’t know which one because they don’t have the right information.

Soil sampling is the way to solve that. So we automated the soil sampling process through our radical agronomics platform. And, so that one, we’re unique in the market. Nobody else has touched that area for decades. So those are some of the exciting ones.

One that others are also working on is targeted spraying that, has cameras on the boom. It looks into the field, uses AI to differentiate between a weed and the plant, sends a signal to just the right nozzle, sprays just that weed, saves about 70% of the herbicide for the farmer as opposed to spraying the whole field. So that one’s got a lot of attention, taking a very imprecise tool, a spray that sprays the whole field regardless of where the weeds are, and turns into a very precise tool. So that’s just an example of some of the highlights. Awesome.

Kyle, Interviewer: I’ll open it up if there’s any questions. I think you had a question down front here.

Eric Ansodia, CEO, AGCO: She’s coming with a mic, someone can hear you.

Unidentified speaker: Two separate questions. First is with regard to PTX, who is the main competition?

Eric Ansodia, CEO, AGCO: Well, I would say that, there’s very little competition in the retrofit market. There’s pieces no one has a portfolio we have by by far. There are elements of retrofit guidance from Topcon and, Novotel. There’s elements of retrofit other, tools. Ag Leader would be a small company.

Raven, that’s owned by, CNH would be still doing retrofit sprayer technology. Those would be the big ones. The the the small pieces no one has the same strategy of going as a full line tech provider. Very little. Yeah.

Very little. Well, so okay. Let me take that back. The retrofit sales is is enormous. The OEM sales are zero.

So they because there’s those three channels. The OEM sales, sell nothing to deer. But for planter retrofit, it’s almost the majority is on deer customer sales. So most planters that we’re selling onto are are are deer planters, also Kinsey, also CNH planters, and a little bit at Echo.

Unidentified speaker: On the way to where are the EME on their cycle then? Is that a model to get a little better? Yes.

Eric Ansodia, CEO, AGCO: Yeah. EIM is our least volatile market. It only moves between 90110% of the mid cycle. We expect next year to be an up year for EIM. We’re probably, you know, we’re at about 90 right now.

We think we’ll be up next year and we have the most confidence in that market of any. It’s our biggest market. It’s got the most subsidies in the market. It’s the most stable. It’s our high it’s a high margin market.

So we have we have good confidence in AIM. Well, the we’ve not seen this many years going into a downturn. July was the lowest the month with the lowest tractor sales in the history in the last fifteen years. Our data model, we’ve got put our data scientists together on a data prediction prediction model back during COVID, and it looks at a number of different things, farmer sentiment, net farm income, commodity price, all these things, and it’s got a projection pretty steadily up. And then last one would be the SEMA barometer that takes the farmer sentiment.

And, it’s been a pretty good correlation, better correlation than the Purdue indicator. And it’s been up for about eight or nine months. So those are all reasons I think. Push on you.

Kyle, Interviewer: Question.

Unidentified speaker: So if we look back about a decade, I guess that’s when Climate Corp first was purchased by Deere, and that was kind of the start of the precision ag kind of consolidation by Monsanto. Monsanto. Correct.

Eric Ansodia, CEO, AGCO: Sorry. Yeah.

Unidentified speaker: Yeah. So when I think about precision ag and the the farmer’s willingness, the dealer’s willingness to kind of adopt it, where are we on that scale? Is there still a TAM out there that’s achievable for people who for the farmer or dealer who don’t believe in it or haven’t adopted it yet, or is it pretty ubiquitous now and it’s just a matter of who has the best the best product in order to to to make a purchase?

Eric Ansodia, CEO, AGCO: Yeah. So ClimateCore was really about agronomic recommendations and what seed to plant and what herbicide or pesticide or fertilizer to put down. So it was more about agronomic recommendations and that’s why it made sense for Monsanto as a nice adjacency to help with their sales. What we’re focused on is how to do the farming better. So we’re not going to get so much into what seed to buy, we’re really trying to automate all the things that the operator does in the cab today in a manual way and that they don’t get it perfect.

So it’s much more mechanical combined with software using sensors to be able to be much more precise. Farmers are very bought into that. And especially in these tough times, instead of buying a brand new machine to retrofit their existing machine to give it new capability. So the there’s there’s in in conjunction with the fact that farms are getting larger. So if you buy a module, it’s got more acres to pay off now.

And maybe one last dimension in Brazil, more and more farmers are going to two to two and a half crops a year. So if you buy a module in Brazil, it’ll it’ll cover many more acres. So compared to five or ten years ago, I think the the willingness to go for precision ag, the size of the farms and the number of cycles that it gets used is is all positive. Their willingness to pay separately for an agronomic recommendation is still a stretch, that’s why climate struggle, I think. There’s a question over here somewhere.

Kyle, Interviewer: No. Alright. I think I got time for one more question. Just on Starlink, a couple of your competitors have announced partnerships. Curious, what your plans are in in that realm?

I know it’s particularly important for that South American market that lacks cellular content.

Eric Ansodia, CEO, AGCO: We we launched Starlink at Farm Progress last week. We’ve got the Starlink Mini. We expect all our competitors to actually follow our path there there there, the different Starlink solution. We think they’ll go to go to ours. And so with the data platform now, if we felt like that was the right time to launch it, as you’re moving data back and forth, having real time connectivity along with the need for it in autonomy, you have to have real time connectivity.

This is the right time for us.

Kyle, Interviewer: Well, awesome. Thank you guys for your Great. Thank you, Kyle. Looks like we’re up on time. So thank you.

Great.

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