International AGCO/Fendt Press Conference - Sunday, 8th of November 2015 - Conference Hall “New York”, Hall 19/20, Hanover Fairgrounds

Speech

• Peter-Josef Paffen

• Vice President Brand Director Fendt EAME

• Chairman of the Management Board

Slide 1: Fendt Full-Line image

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Greetings/Welcome

Slide 2: CEMA Business Climate Index

Slide 3: Ag Business Activity and Investment Index (Germany)

How is the economic environment for our business developing?

The European umbrella association of the agricultural equipment industry, the CEMA, surveys the top management of 140 companies each month to determine a new Business Climate Index.

The good news: in the past twelve months the mood in the European agricultural equipment industry has been continually moving upwards in small steps. The baseline has been reached for future sales forecasts. Development in individual countries, however, still varies greatly. In the meantime, the sales forecasts in the high-volume markets France, Spain and Italy are clearly up again; however, markets that remained stable in the past years, such as Germany and Austria, are now under considerable pressure. This can be seen in the current Ag Business Activity and Investment Index for Germany. German farmers and contractors are presently still rather cautious with their willingness to invest.

Slide 4: Sales development

Now to the key business figures for the Fendt brand and the AGCO GmbH Marktoberdorf. The business year 2014 was a year with two faces. In the first half year, everything was still within expectations. In the second half year, there were severe downturns on major markets. The reasons are complex. The sanction policies, many areas of unrest worldwide, comparatively good harvest volumes, changes in goods flow and the associated drop in crucial agricultural producer prices, are all important influences for the success and future prospects for agriculture. Despite the decline, we were able to sell 14,781 tractors in 2014. A similar level as in 2011 and 2012. Through timely adaptation measures within the company and strict cost discipline, we were able to achieve very respectable results with the Fendt brand.

That also applies to the current year 2015. Business has developed in accordance to the plans and forecasts and we are expecting tractor sales of approx. 13,500 units by the end of the year.

Slide 5: Workforce development AGCO Deutschland

At the end of December 2014, a total of 4501 people were employed as permanent AGCO staff at the four AGCO/Fendt locations: Marktoberdorf, Asbach-Bäumenheim, Hohenmölsen and Feucht. That was 42 fewer than at the end of 2013. With a staff of 4180, the number of employees at the end of September 2015 was slightly below the level of the prior year, as was previously announced. Those are the effects of the current declining demand and the higher productivity of the new production facilities at the AGCO/Fendt locations in Germany.

Slide 6: Market Share Fendt Tractors in Germany (over 50 hp) and Europe

On a slightly declining tractor market in Germany, Fendt was able to maintain first place in 2014 with 5,904 new registrations and a market share of 20.8 percent. We will also succeed in the current year. From January to August 2015, Fendt was in first place in the registration figures in Germany with a market share of 25.2 percent (prior year 23.8), with a clear margin to the second-placed brand. However, the tractor market is now also declining in Germany, by 11.8 percent. Low producer prices, especially for dairy and meat products are inhibiting the willingness to invest.

Slide 7: Fendt Market Shares in Europe

The situation on the Western and Central European markets is comparable with the development in Germany. The tractor market is forecast to decline by approx. 10 percent in 2015. Fendt has gained further market shares in Europe and is therefore less affected by the decline. Market experts interpret the slow recovery on the high-volume markets France, Spain and Italy as a sign that the agricultural equipment markets in Europe have bottomed out.

Slide 8: Fendt Product Strategy

Fendt is now a full-line provider. That is an integral part of AGCO’s growth strategy.

At the Fendt stand at the Agritechnica, we will present the biggest and most modern tractor line-up up to now, ranging from 70 hp to 500 hp, as well as both Fendt Katana 65 and 85 models, a broad line of Fendt combine harvesters from 180 hp to 500 hp, Fendt balers and – brand-new – a wide range of forage harvesting equipment with mowers, tedders, hay rakes and the new Fendt loader wagon. With this attractive line-up, we will continue to grow successfully over the next few years.

Slide 9: Fendt StarCertified

Our new project, Fendt StarCertified, for certified young, pre-owned Fendt tractors and self-propelled Fendt harvesting machines also has its world premiere at the Agritechnica. Pre-owned Fendt tractors traditionally maintain the highest value in the entire industry. Proof for the quality and durability of Fendt products.

With pre-owned Fendt machines with the Fendt StarCertified certificate, customers can buy a pre-owned machine with even more confidence. Because the Fendt StarCertified machines undergo intensive inspection through Fendt dealers, with up to 200 points checked and reconditioned, if necessary. With the certificate, customers get a check list, the status and – this is new – a one-year manufacturer warranty. Customers can then extend the warranty as part of the Fendt StarWarranty programme: up to a machine age of eight years or 8000 operating hours for tractors and five years or 3000 operating hours for forage harvesters and combines. That gives customers additional assurance and provides Fendt dealers with active support for marketing pre-owned machines.

Slide 10: Research and Development

Today, more than 400 engineers work in the Research and Development Centre in Marktoberdorf in the areas of tractors and forage harvesters. In 2014, we invested 62 million euros in new products. For 2015, 60 million euros have been planned.

Slide 11: Summary

Summary:

• Fendt is now a full-line provider

• New at the Agritechnica: Fendt forage harvesting equipment

• Fendt 1000 Vario: The world’s biggest standard tractor is now ready for series production

• Fendt Harvesting on course for growth

• Strategic initiative for the development of Fendt sales partners

• Agricultural equipment markets declining worldwide

• Fendt continually gaining market shares, also during the course of 2015 up to now