Excluding unfavorable currency translation impacts of about 14.5%, net sales in the first quarter of 2009 increased about 2.9% compared to the same period in 2008.

“Demand for agricultural equipment is weakening in all the major world markets as the global economic turmoil and constrained credit markets begin to impact our industry,” said Martin Richenhagen, AGCO’s chairman, president and chief executive officer. “In the first quarter, the credit-challenged markets of Eastern Europe and Russia experienced significant declines, while industry demand continues to erode in South America where dry weather conditions and credit availability are factors. Despite the disruption in the general economy, farm fundamentals remain strong, and we continue to be optimistic about long-term world grain demand and the future growth prospects for our company.”

“We are taking aggressive actions to control expenses, reduce our production and lower our investment in working capital in line with weaker market conditions,” Richenhagen added. “We are balancing near-term cost reductions with continued investment in longer-term growth initiatives. We remain positioned to focus on operational improvements and additional investment in new products. The short-term cost reduction actions and production cuts should see us through this downturn, while our strategic investments should position us for profitable growth as market conditions improve.”

First Quarter Results:

AGCO’s North American sales grew about 12.7% in the first quarter of 2009 compared to the first quarter of 2008, excluding unfavorable currency translation impacts of about 5.8%. In the North American region, stronger sales of balers and tillage equipment produced much of the improvement. Net sales in the first quarter of 2009 in the Europe/Africa/Middle East (EAME) region increased about 8.7% when compared to the first quarter of 2008, excluding unfavorable currency translation impacts of about 16.3%. Growth in Germany, France and the UK was partially offset by lower sales in Scandinavia, Spain, Eastern Europe and Russia. Weaker market conditions in Brazil and Argentina during the first quarter of 2009 drove a net sales decrease of about 26.6% in the South American region, excluding unfavorable currency translation impacts of about 17.6%, compared to the same period in 2008. Net sales in company’s Asia/Pacific region decreased about 1.8% during the first quarter of 2009 compared to the same period in 2008, excluding unfavorable currency translation impacts of about 20.8%.

Gross profit percentage declined about 40 basis points in the first quarter of 2009 compared to the same period in 2008, primarily due to lower production volumes. Income from operations for the first quarter of 2009 was $58.6 million compared to $94.2 million for the same period in 2008. Lower margins, unfavorable currency translation impacts and higher levels of engineering expense accounted for most of the decrease. Unit production of tractors and combines for the first quarter of 2009 was down about 5% compared to 2008 levels.

AGCO’s EAME region reported a decline of about $19.7 million in income from operations for the first quarter of 2009 compared to the same period in 2008. Reduced gross margins, unfavorable currency translation impacts and increased engineering expenses all contributed to the decline.

AGCO’s South American region reported a decrease in income from operations of about $29.0 million in the first quarter of 2009 compared to the same period in 2008. Significantly lower sales in Brazil and Argentina, the unfavorable impact of currency translation and a shift in sales mix to lower horsepower tractors in Brazil produced lower income from operations compared to the first quarter of 2008.

Results in AGCO’s North American region benefited from sales growth, expense control initiatives and the improvement in the profitability of company’s sprayer operations. In the first quarter of 2009, income from operations grew about $18.2 million compared to the same period in 2008.

Income from operations in the company’s Asia/Pacific region decreased about $3.4 million in the first quarter of 2009 compared to the same period in 2008, due to a decrease in sales and unfavorable currency translation impacts.

Regional Market Results:

North America:

Industry unit retail sales of tractors for the first quarter of 2009 decreased about 20% over the comparable prior year period. Industry unit retail sales of tractors over 100 horsepower were down modestly compared to strong levels in the prior year, while industry unit retail sales of tractors less than 100 horsepower declined significantly compared to the prior year. Industry unit retail sales of combines for the first quarter of 2009 increased about 33% from the same period in 2008. AGCO’s unit retail sales of tractors and combines were down in the first quarter of 2009 compared to the same period in 2008.

Europe:

Industry unit retail sales of tractors for the first quarter of 2009 decreased about 8% compared to the prior year period. Weaker retail demand in Central and Eastern Europe, Russia, and Spain was partially offset by improved demand in France, Germany, and the UK. AGCO’s unit retail sales of tractors for the first quarter of 2009 were lower when compared to the prior year period.

South America:

Industry unit retail sales of tractors decreased about 19% and industry unit retail sales of combines decreased about 44% for the first quarter of 2009 compared to the same period last year. Industry unit retail sales of tractors in Brazil increased about 3% while industry unit retail sales in Argentina declined about 60%, during the first quarter of 2009 compared to 2008. In January 2009, the Brazilian government initiated a special financing program for small tractors. The new program drove an increase in small tractor sales which offset declines in high horsepower tractors in the professional farming segment. AGCO’s South American unit retail sales of tractors and combines decreased in the first quarter of 2009 compared to 2008.

Rest of World Markets:

Outside of North America, Europe and South America, AGCO’s net sales for the first quarter of 2009 increased about 3.5% compared to 2008, primarily due to higher sales in Africa partially offset by lower sales in the Middle East.

“With commodity prices expected to stay above historical levels and input costs trending down, farmers are generally expected to be profitable in 2009. However, the drop in commodity prices from last year’s record levels and decreased crop production in some regions are expected to result in reduced farm income,” said Richenhagen. “The global recession has hurt farmer sentiment and prompted them to be more cautious about their equipment investment decisions. Credit limitations are also a major factor in some regions. We have seen a general softening in demand for our products and our order trends have weakened. There is significant uncertainty regarding market demand for the remainder of the year and AGCO will continue to adjust its production schedule in line with changing demand.”