The Global Market for Agricultural Machinery – Trends, Perspectives, Opportunities for China

10th November, 2009

�Hubertus M. Mühlhäuser, Senior Vice President, Strategy & Integration,

General Manager, Eastern Europe and Asia, AGCO

2

Agenda

AGCO Corporation

Industry Trends

Strategic Update

Strategic Update

Industry Trends

3

History of Industry-Known Brands

Super Technology

New Distribution

Geographic Diversity

Economies of Scale

Synergy Opportunities

1994

19

94

1994

1997

1991

1995

19

96

1996

1990

1995

2001

20

02

2001

2000

19

97

1998

19

98

1997

2004

20

07

AGCO´s Acquisition History

4

Growth Through Four Leading Focus Brands

Serious machinery for professional producers

One of the most widely distributed ag brands

Completely customized performance

Premium reputation for high tech solutions

5

Competitive Full Line of Products

Tractors

From 45 hp to 590 hp

Combines

Classes IV– VIII from 174 to 425 hp

Other Ag Equipment

Balers Sprayers Planters Tillage

Technology

  Engines   Trans-

missions   Precision

Farming   Telemetry   Auto Guide   Yield

Monitor

6

Global Manufacturing Presence

Diesel Engines Linnavuori, Finland

Round Balers5)

Russi, Italy

AGCO owns: 1) 50% interest GIMA transmission JV 2) 23% interest in TAFE 3) 50% of Laverda 4) 50% of engine JV with CTP 5) 25% interest Round Balers 6) 50% interest Fella

Tractors Marktoberdorf, Germany

Implements Beloit, Kansas

Combines/ Hay Equipment Hesston, Kansas

Tractors Queretaro, Mexico

Sprayers/ Tracked Tractors Jackson, Minnesota Sprayers

Grubbenvorst, The Netherlands

Tractors Suolahti, Finland

Cabs Baumenheim, Germany

Combines Randers, Denmark

Tractors GIMA1)-Transmissions Beauvais, France

Tractors/Engines Mogi das Cruzes, Brazil

Tractors Canoas, Brazil

Combines Santa Rosa, Brazil

TAFE2)

Massey Ferguson Licensee India

Laverda3)

Breganze, Italy

Planters Ibiruba, Brazil

Engines4)

Vladimir, Russia

Gensets Shanghai, China

Engines / Tractors Rosario, Argentina

Assembly Operation Tacoma, Washington

DAMSA Engine JV Haedo, Argentina

Assembly Operation Baltimore, Maryland

Assembly Operation Houston, Texas Implement Factory6)

Feucht, Germany

Components Hohenmoelsen, Germany

7

AGCO Today

  Leading “Pure-Play” global ag equipment company

  Full range of products and services

  Leading brands

  Well positioned in growing markets

  15,000+ employees in 140 countries

2009 will be around 2007 levels

Global Net Sales In US $ bn

0,2

5,4

2,4

6,8

8,4

ca. 6,6

1990 1999 2006 2007 2008 2009

-20%

8

Service For Our Customers

9

Clear Vision, Mission and Strategy

Vision:  High-tech solutions for professional farmers feeding the world

Mission:  Profitable growth through superior customer service, innovation,

quality and commitment

Key Strategic Thrust:  Profitable Growth in China and Eastern Europe

10

Agenda

AGCO Corporation

Industry Trends

Strategic Update

Strategic Update

AGCO Corporation

11

World

2009 2014

Eastern Europe, Asia

2009 2014

South America

2009 2014

EAME/ANZ

2009 2014

North America

2009 2014

13,582 13,574

13,94116,332

Already Today Asia is One of the Top Ag Regions

In US $ m Industry (Western) Industry (Non-Western)

2,918 4,919 3,309 5,716

9,752

15,15013,061

20,866+10%

33,750 40,541

10,090

15,61343,840 56,154

+5%

13,691 13,692

+0%*

109 118 14,06616,484

+3%

125152

3,0225,113

+11%

194104

* CAGR

12

The World is Impacted by the Economic Crisis …

Real GDP Growth (%)

Source: IMF World Economic Outlook - October

-7,5

-5,0

-2,5

0,0

2,5

5,0

7,5

10,0

South America

North America

Western Europe

Eastern Europe

Africa Australia and New Zealand

Japan China & Other Asia

2008 2009F 2010F 2011F

13

… yet Long-Term Ag Drivers Remain in Place …

Will drive higher commodity prices and farm income

World population growth

Limited land for production

Improved diet

Biofuel production

14

… China’s Ag Industry Continues to Evolve

  China’s agricultural market is up in 2009, despite the global crisis

  China has 20% of the world population with less than 10% arable land

  Agricultural industry GDP contribution has fallen during China’s industrialization. Yet, the sector still accounts for 11% of GDP and up to 40% of employment.

  Increasingly, labor moves from agricultural to industrial sector and provides needed manpower to fuel growth. Ratio of immigrant workers in urban labor forces has grown from 1.7% in 1983 to 46.7% in 2007.

  Although the importance is diminishing, agriculture, farmers and countryside have made significant contributions to China’s economic leap.

15

China’s Main Agriculture Production Centers

  Very populated   Fragmented farms   Very intense agriculture   Crops: Rice, Wheat  Market for smaller tractors

and combines

  Very densely populated   Booming economy  Ongoing consolidation of

farms   Crops: Rice, Wheat   Private investment around

bigger cities   Consolidation of farm

equipment producers  Market for smaller tractors

and combines

  Scarcely populated   Big state farms   Extensive agriculture   Crops: Wheat, Maize,

Soybean, Rice   Largest market for bigger

farm equipment

16

China Agricultural Balance – the Gap is Increasing …

16

Source: Economic Research Service calculations based on China customs data; China’s Ongoing Agricultural Modernization, USDA

US $ bn

0

10

20

30

40

50

60

1995 1997 1999 2001 2003 2005 2007

China’s agricultural exports

China’s agricultural imports

China’s WTO accession

December 2001

17

3-Phase Evolution of Ag. Industry – Focus is Shifting

Industrialization is the overarching priority of economic development, entailing support from the agricultural sector in various forms of wealth transfer.

Pro-Industrialization 1 Industrial sectors develop on its own strength. Since the growth momentum of industrial sectors was much stronger than agriculture, the agriculture-industry imbalance continues to deteriorate.

Neutral Policy 2 Support from the industrial sectors to the agriculture sector after industrialization enters an advanced stage with a view to achieving balanced and sustainable growth in the long run.

Pro-Agriculture 3

2004-now1990-2004 1960-1990

Source: Investing for Sustainability: A Primer on China’s Agriculture, Farmers and the Countryside Issues, Morgan Stanley

18

Escalating Mechanization Offers Huge Opportunities

France Germany

UK Japan

Australia Russia Brazil

China Indonisia

Pakistan India

Canada USA

Mechanization Level Comparison (unit of tractor / 1000 farmers & ag. industry workers; 2007)

… China Remains at Comparatively low Levels

Despite Significant Mechanization 1978-2007 …

Machine-plowing level

Machine-cultivated level

Machine-sowing level

2003 2007 1993 1978 1983

47%

55%

18%

9%

47%

34%

40%

29% 27%

3%

12% 15%

25%

10%

63%

19%

59%

2% 5%

9%

41%

1988 1998

Mechanization RateSource: China Agricultural Machinery Industry Yearbook 2008; China Statistical Yearbook 2008

19

Growing Government Support to Agriculture

Chinese Government Agricultural Subsidies

Percentage of Lending to Agriculture in China, 2007

Source: Agriculture & Agri. Machinery Industry in China, VDMA; China web research, AGCO Strategy & Integration

US $ bn

1,79 2,06 3,82 6,34

13,32 16,04

0,01 0,04 0,08

1,48

0,58

0,26

0

4

8

12

16

20

2004 2005 2006 2007 2008 2009*

Other Farm Subsidies Ag Machinery Subsidies

All Finan-cial

Insti-tutions

State-Owned Banks

Policy Banks

Share-holding Banks

Rural Co-

opera-tives

Com-mercial Banks

22% 18%

38%

8%

84%

5% 0%

10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

20

Significant Growth in Key Market Segments

Tractor Population Combine Population

Source: China Agricultural Machinery Industry Yearbook 2008; China Statistical Yearbook 2008; AGCO Strategy & Integration

mio. units

+8%

92%

8%

90% 71%

10%

20%

80% 29%

94%

6%

85% 6.83

1.93 3.60

7%

93%

20.22

8.61

11.95

14.76

1978 1983 1988 1993 1998 2003 2008

<25hp & Walking Tractors >25hp

15%

0.02 0.04 0.04 0.06

0.18

0.36

0.74

1978 1983 1988 1993 1998 2003 2008

mio. units

+13%

Including all classes/hp of wheat, corn combines as well as full/semi–feed rice combines

21

Agenda

AGCO Corporation

Industry Trends

Strategic Update

AGCO Corporation

Industry Trends

22

Strategic Thrusts and Implications

Western Players  Develop product range to meet EEA market

requirements and reach competitive cost position, potentially through partnerships

 Establish domestic distribution as well as manufacturing and supply base

 Develop financing and after sales services

 Grow EEA to supply global operations (components) and markets (whole goods)

Domestic Players  Become national champion for specific

product segment

  Focus on reaching western technology, quality, and emission standards

 Develop a presence in international markets

  Increase growth in higher horse power tractors, larger grain combines and hay equipment.

  As western players continue to grow their presence, competitive pressure on local players increases significantly

  As non-western players upgrade their product range, existing differences diminish placing them as an alternative to western producers

23

AGCO’s China Strategy – Harvesting the Opportunity

23

  Large, continuously growing market for small tractors

  Farm consolidation and government policies drive growth in HHP tractors and combines

  AGCO strategy focusing on

 Continued growth of existing import business

 Localization of proprietary technology in area of tractors and combines

 Leverage of China as global sourcing and manufacturing base

24

Thank You For Your Attention

Hefei Farm Show, Oct 2009, China