AGCO/Fendt: high speed start into 2008

Long-term high demand for economical Vario tractors forecast

The high objectives set last year have been attained; Fendt has succeeded in hurdling the billion euro mark. In 2007 AGCO/Fendt recorded annual net sales of 1.065 bil-lion euro. Tractor sales climb by 9.5 percent to 13,312 units - 1,155 tractors more than in the prior year.
Moreover, the business trend in the first half of 2008 indicates that new growth can be expected by the end of 2008, said Merschroth, Vice President Fendt and Spokesman of the Management Board regarding the current order situation. At the international annual press conference 2008 in the Ostrava region in the Czech Republic, he proudly presented Fendt's current sales figures. An annual tractor production of 15,450 units is planned for 2008

For 2008, Fendt offered journalist something out of the ordinary on the occasion of the press conference 2008. The journalists visited a large construction site in the Ostrava region in the eastern part of the Czech Republic, on which some 50 Vario 936 were in operation. "This example shows that entrepreneurs in the non-agricultural sector have discovered the profitability of Vario tractors," according to Merschroth. Fur-thermore, all the new EU member countries are currently in a modernisation process in agriculture so that the demand for modern agricultural equipment is accordingly high.

Excellent prospects for agriculture

Due to the extremely multifaceted nature of agriculture, there will always be fluctuations in yield and results, regionally or for individual products, for various reasons. In general, we continue to forecast excellent prospects for professional farmers," explained Merschroth on the situation on the agricultural market. The potential for successful growth in agriculture are better than ever before, since the drivers for these positive trends remain unchanged: the world population is growing, the demands for high-quality food as well. Further-more, the massive expansion of regenerative energy for environmental reasons further increases the options farmers have. Fendt has determined a high readiness for investment on the part of farmers for a longer period of time now. The prevailing mood among customers is very good and that has a posi-tive effect on Fendt's business trend.
"With the development and production of innovative and efficient technology, Fendt contributes to the development of agribusiness and to covering the high demand for food," sums up Merschroth.

Production at the upper capacity limit

In 2007 tractor production climbed at Fendt: 1,155 more tractors rolled from the assembly line than in the prior year. With a renewed increase in production in 2007 by 9.5 percent to 13,312 units, Merschroth sees a confirmation of the increasing attractiveness of the entire Fendt tractor line. The fuel-saving Vario technology, in particular, has gained ground in face of climbing diesel prices. However, we had to battle supply bottlenecks almost continuously with some suppliers in 2007. "We were only able to attain our objective because our employees were willing to catch up on the missing units. This year, in due time, we have agreed with our suppliers on a sales objective of 15,000 units to begin with. In addition, some 3,000 transmission units have been planned for other AGCO brands. Today we are confident that we will even be able to attain the slightly higher sales objective of 15,450 units."

Harvesting equipment: Forage harvester expands product line

"Things continue to move forward for Fendt harvesting equipment. We are implementing AGCO's strategy and are moving ahead step by step," said Merschroth. With new models this year, Fendt expands its product portfolio of har-vesting machines.

Billion euro mark hurdled in 2007

The AGCO GmbH in Marktoberdorf has set a new record mark. For the first time, net sales climbed over one billion euros. With a 20.5 percent increase, the AGCO GmbH achieved net sales of 1.065 billion euros.

Included in the overall sales are Fendt tractors, Fendt harvesting equipment, Challenger Germany, Fendt materials handling and the OEM business with CVT transmissions.

The positive start into 2008 gives the Fendt management confident that the sales will climb about 20 percent again.

Fendt regarded innovation and technology leader

Fendt is regarded the trendsetter and technology leader in the industry. That is why AGCO invested some 30 million euros in Fendt research in 2007.Furthermore, investments have been made in the new construction of a hall for testing and prototyping. This building for servicing, assembling and testing prototypes, along with the addition of more personnel in the research and development team, ensures that projects, such as tractors that comply with emissions standard Tier 4 interim or the forage harvester are running according to plan. The expenditures for research and development this year have been increased to 34 million euros.

Investment in the Fendt locations

AGCO invested 37 million euros in 2007 - primarily for meeting the increased production of 15,000 tractors in 2008 - in the Marktoberdorf and Bäumenheim locations.

"The investment plans for the current year are set at a similarly high level," reported Merschroth. Currently, as part of the project Fendt Ahead², the increase in production capacity to 20,000 tractors annually until 2012 is being prepared. Extensive make-or-buy analyses were performed and cooperation with potential partners, regarding contracts for components and parts that are not part of the core area, have been examined. Further investments for expanding production were made in areas that strengthen Fendt's core competencies.

Fendt workforce grows to almost 3,000 employees

With the growth of the Fendt brand and the consolidation of the German AGCO sales forces in Marktoberdorf, the number of employees in the Marktoberdorf and Asbach-Bäumenheim locations has increased to 3,080 employees in December 2007. This is an increase of 290 employees compared to the prior year. At the end of the first half of 2008 the number of employees lies at 3,170.
"It is, however, becoming increasingly difficult to find qualified skilled workers and engineers in various areas. In order to be able to acquire qualified personnel in the future, we are relying on comprehensive personnel marketing at schools and universities," reported Merschroth, "where we are presenting ourselves as an attractive employer early to potential employees, while contributing to better positioning modern agricultural engineering."

Review - Outlook

The Fendt brand can look back at a successful business year; in 2007 new records in sales, revenues and employees were set again. The high acceptance of the Vario technology worldwide was very positive; market position in all countries improved. Merschroth views the unreliable supply readiness of some suppliers and the unscheduled changes to the product cycles that had to be made critically.

For 2008, the very high expectation for incoming orders, sales and orders at hand have been met and clearly exceed the figures from the previous year according to Merschroth. The resulting longer delivery times should shorten again as production is stepped up.

At the largest event of the current year, the Fendt Field Day in Wadenbrunn in August, Fendt will present new harvesting equipment. "We also want to set a new record with the field day and hope for numerous visitors," says Merschroth clearly looking forward to the event.

In 2009, Fendt expects the agricultural equipment market to stabilise at a high level. Modern and efficient machines are required, to expand and intensify the increase in demand for area production. Based on the increased sales figures in almost all markets worldwide, Merschroth forecasts excellent prospects for the technologically one-of-a-kind Vario tech-nology - not least through the low fuel consumption of the Vario tractor. At this time, the Fendt management, together with the AGCO senior management, is investigating how the further growth of the premium brand of the corporation will be defined.

Rückfragen:
Sepp Nuscheler
- Pressestelle -
Tel.: 08342-77343 / Fax : 08342-77220
E-mail: pressestelle@xfendt.de