AGCO Corporation reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with net sales of $11.66 billion, a decrease of 19.1% from $14.41 billion in 2023. The company experienced a net loss attributable to AGCO Corporation of $424.8 million, or $5.69 per diluted share, compared to a net income of $1.17 billion, or $15.63 per diluted share, in the previous year. The decline in revenue was primarily attributed to lower sales volumes due to reduced end-market demand and unfavorable currency impacts, particularly affecting sales of tractors and combines, which saw a 20.8% decrease.
In terms of operational changes, AGCO underwent a strategic shift in its portfolio, highlighted by the divestiture of the majority of its Grain & Protein (G&P) business, which was completed on November 1, 2024, for a purchase price of $700 million. This sale resulted in a loss of $507.3 million, which significantly impacted the company's overall financial results. Additionally, AGCO entered into a joint venture with Trimble, known as PTx Trimble, which was finalized on April 1, 2024, and is expected to enhance its offerings in precision agriculture technology.
The company also reported a decrease in gross profit margin, which fell to 24.9% of net sales in 2024 from 26.2% in 2023, primarily due to lower production volumes and unfavorable pricing impacts. Selling, general, and administrative expenses (SG&A) as a percentage of net sales increased to 12.0% from 10.1% in the previous year, reflecting a decrease in sales at a faster rate than SG&A expenses. The company recorded impairment charges of $369.5 million, primarily related to goodwill associated with the PTx Trimble North America reporting unit.
AGCO's operational metrics showed a decrease in global production hours, which fell by approximately 28.2% compared to 2023, reflecting the company's response to lower market demand. The company also reported a reduction in its employee headcount as part of its restructuring efforts aimed at enhancing operational efficiencies. Looking ahead, AGCO anticipates a moderately lower global industry demand for farm equipment in 2025, projecting a further decrease in net sales due to lower sales volumes and flat pricing, alongside potential challenges from currency fluctuations and market conditions.
About AGCO CORP /DE
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