DULUTH, GEORGIA, US — AGCO posted net income of $897 million for 2021, up from $427.1 million in 2020, mostly due to improved industry demand.

Net sales for the year were up 22% to $11.1 billion.

“AGCO delivered record results in 2021 highlighted by significantly higher sales and margins compared to 2020,” stated Eric Hansotia, chairman, president and chief executive officer of AGCO. “Our performance was fueled by improved global industry demand and focused execution by the AGCO team, who exceeded sales targets despite considerable supply chain challenges.”

He said adjusted operating margins reached 9.1% of net sales due to the benefits of sales growth and pricing that helped to offset substantial inflationary cost pressures.

“Our smart technology product lines are in strong demand and are driving productivity improvements for our customers and growth opportunities for AGCO,” Hansotia said. “Looking forward to 2022, we expect supply chain pressures to persist, presenting challenges throughout the year. Our teams are working tirelessly with our suppliers to mitigate the impact of these issues to serve our customers as well as to deliver another strong year of performance. We are forecasting sales growth and margin expansion in 2022 as industry demand trends positively and our farmer-first strategy gains traction.”

Net sales in the North American region increased 21% for the full year of 2021 compared to 2020. Income from operations for the full year of 2021 increased approximately $44.4 million compared to 2020. The improvement was the result of higher sales and production, a richer mix of products and favorable price realization, all which offset higher material costs.

AGCO’s South American net sales increased 54% for 2021. Sales increased significantly across all the South American markets with growth achieved in tractors, combines and planting equipment as well as replacement parts.

Income from operations for the full year of 2021 increased by approximately $102.9 million compared to 2020 and operating margins exceeded 10%.

Net sales in AGCO’s Europe/Middle East region increased 13% for 2021. Increased sales of tractors, combines and replacement parts contributed to growth across all of Europe. Income from operations increased approximately $170.1 million for the full year of 2021 compared to 2020, due to higher net sales and production volumes as well as price realization which offset higher material costs and engineering expenses.

Asia/Pacific/Africa net sales increased 22%, during the full year of 2021 compared to 2020. Higher sales in Africa, Australia and China produced the majority of the increase. Income from operations improved by approximately $51.8 million for the full year of 2021 compared to 2020 due to higher sales and an improved product mix.

AGCO’s net sales for 2022 are expected to be approximately $12.3 billion, reflecting improved sales volumes and pricing partially offset by negative foreign currency translation.

Gross and operating margins are projected to improve from 2021 levels, reflecting the impact of higher sales and production volumes as well as pricing to offset cost inflation. These improvements are planned to fund increases in engineering and other technology investments to support AGCO’s precision agriculture and digital initiatives.

Based on these assumptions, 2022 earnings per share are targeted at approximately $11.50.