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Diego Lopez Yu Wu Steven Wisnoski Bryan Fritz

Diego Lopez Yu Wu Steven Wisnoski Bryan Fritz. Agenda. Thesis/Catalysts Company Overview Financials Comparables Risks DCF Model. Thesis. Earnings Announcement: 10/30 Expansion for Fendt German Manufacturing Facility and Massey Ferguson in France.

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Diego Lopez Yu Wu Steven Wisnoski Bryan Fritz

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  1. Diego Lopez Yu Wu Steven Wisnoski Bryan Fritz

  2. Agenda • Thesis/Catalysts • Company Overview • Financials • Comparables • Risks • DCF Model

  3. Thesis • Earnings Announcement: 10/30 • Expansion for Fendt German Manufacturing Facility and Massey Ferguson in France. • $223 Million investment towards expansion • General increase in population means continual agricultural growth.

  4. AGCO Overview Founded in 1991, HQ in Duluth, Georgia Stock price at time of pitch: $47.36 Fair Value: $66.36 Operates under four brands: • Challenger • Valtra • Fendt • Massey Ferguson

  5. Products are marketed towards large-scale farmers and contractors • Pride themselves on higher output with lower operating costs

  6. Based in Finland and growing reputation in South America • Superior because tractors are specifically designed for each individual customer • Customization possibilities

  7. Offers a full range of tractors from ruggedly simple to high-specification • Technological enhancements like Selective Catalytic Reduction (SCR) and satellite-based automatic steering • 20M expansion investment in France, announced 9/12

  8. Headquartered in Germany and is the leading high tech brand for customers • New Vario 700 Tractor offers the cutting edge technology in a lower horsepower model • $223M expansion in Germany, currently in effect

  9. Quarterly Sales By Region

  10. Regional Growth

  11. Population Growth

  12. Brazil • Large growth forecast in agriculture production • Large Infrastructure needs to reach this growth forecast • Agricultural exports have grown nearly 5x since 2001 • Creating large agricultural economic presence

  13. Brazil • AGCO had announced that it will invest approximately $55 million through end of 2012 to modernize 3 plants in Brazil. • This expansion posted higher sales in Brazil on Q2 2012 with an 8.2% compared increase to the first six months of 2011 on a currency basis.

  14. Risks • Seasonality of agricultural industry • Drastic U.S. sales increase • Exchange rate • Europe • Regulatory • Externality costs • Engineering, capital expense.

  15. Acquisition • In 2011, AGCO acquired GSI Holding Corp. for $932.2M. • $0.45 EPS accretion expected from GSI Holding Corp. • Acquired 80% of Dafeng Machinery Company for about $27M • Acquired the remaining 50% interest of Laverda Spa for about $88.3M • Acquired 50% of AGCO-Amity JV for about $25M

  16. Earnings

  17. Insider Activities

  18. Long-Term Performance

  19. Competitor Analysis

  20. Diego Lopez Yu Wu Steven Wisnoski Bryan Fritz Questions? Ticker: AGCO Price at Time of Pitch: $47.93 Fair Value: $71.16

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