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Jun 30, 2020
AGCO Q2 2020 Earnings Report
AGCO's second quarter results demonstrated strong execution, overcoming COVID-19 related production disruptions in Europe and South America to deliver a solidly profitable quarter.
Key Takeaways
AGCO reported net sales of approximately $2.0 billion for the second quarter, a decrease of approximately 17.2% compared to the second quarter of 2019. Reported net income was $0.93 per share, while adjusted net income, excluding a non-cash impairment charge and restructuring expenses, was $1.11 per share.
Europe/Middle East (“EME”) sales decreased by 22.8%, North America sales decreased by 10.2%, South America sales decreased by 3.9%, and Asia/Pacific/Africa (“APA”) sales decreased by 8.2%.
Excluding currency translation impact, EME sales decreased by 20.4%, North America sales decreased by 9.1%, South America sales increased 21.2%, and APA sales decreased by 4.1%.
EME operating margin was 8.1%, North America operating margin was 11.6%, South America operating margin was 3.1%, and APA operating margin was 9.5%.
All factories returned to normal production during the second quarter after being impacted by COVID-19 related supply chain disruptions in Europe and South America.
AGCO
AGCO
AGCO Revenue by Geographic Location
Revenue by Geographic Location
North America Revenue
CapyFin.comSouth America Revenue
CapyFin.comEurope/Middle East Revenue
CapyFin.comAsia/Pacific/Africa Revenue
CapyFin.com Forward Guidance
Net sales in 2020 are expected to be approximately $8.3 to $8.4 billion. Adjusted operating margins are expected to be below 2019 levels. 2020 adjusted net income per share is targeted in the range of $3.50 to $3.75.
Positive Outlook
- Focus on delivering strong profitability
- Focus on healthy cash flow in 2020
- Well-positioned to continue investing in premium technology
- Well-positioned to invest in smart farming solutions
- Well-positioned to invest in enhanced digital capabilities
Challenges Ahead
- Lower end-market demand
- Unfavorable impact of currency translation
- Adjusted operating margins are expected to be below 2019 levels
- Impact of lower sales
- Impact of lower production volumes
Revenue & Expenses
Visualization of income flow from segment revenue to net income