AGCO Announces New Capital Allocation Framework
April 22 2021 - 5:30PM
Business Wire
Quarterly Dividend Increased to $0.20 per
share Special Dividend Declared of $4.00 per share
AGCO, Your Agriculture Company (NYSE:AGCO), a worldwide
manufacturer and distributor of agricultural equipment, announced
today that it is implementing a new capital return framework to
enhance the Company’s ability to return cash to shareholders across
a variety of market conditions. The new capital return strategy
will include AGCO’s regular quarterly dividend payments, share
repurchases and an annual variable special dividend to return
excess cash. As part of this framework, AGCO’s Board of Directors
has increased its quarterly dividend by 25%, from $0.16 per share
to $0.20 per share. At the new rate, regular dividends on an annual
basis would total $0.80 per common share compared to the previous
$0.64 per common share. The increased quarterly dividend was
declared on April 22, 2021 and is payable on June 15, 2021 to
stockholders of record as of the close of business on May 14,
2021.
AGCO reiterates its capital allocation priorities which remain
focused on supporting its strategic objectives, followed by the
return of cash to stockholders. As previously discussed, AGCO will
be reinstating share repurchases in 2021. As of December 31, 2020,
the remaining amount eligible to be repurchased under
board-approved authorizations was approximately $245.0 million,
which has no expiration date. The company expects to repurchase
shares opportunistically with a target amount of $120 to $150
million in 2021.
Additional cash available for shareholder distribution will be
deployed in the form of a variable special dividend, with the
amount based upon cash flow generated in the Company’s prior fiscal
year and the Company’s expected future earnings, capital
requirements, acquisition opportunities and financial conditions.
The first of AGCO’s variable special dividend payments was declared
on April 22, 2021 in the amount of $4.00 per share, payable on June
1, 2021 to shareholders of record at the close of business on May
10, 2021. Any future annual variable special dividends made by the
Company are expected to be declared and paid in the first quarter
of each year. Special dividends, as well as regular dividends and
share repurchases, may be suspended, discontinued or modified at
any time, for any reason and without notice.
“This new capital return framework balances AGCO’s continued
commitment to returning cash to shareholders while limiting
shareholder concentration and supporting liquidity in the Company’s
common stock,” said Eric Hansotia, AGCO’s Chairman, President and
Chief Executive Officer.
Safe Harbor Statement
Statements that are not historical facts, including expectations
regarding the new capital allocation framework and the timing and
amount of share repurchases and dividends, are forward-looking and
subject to risks and uncertainties that could cause actual results
to differ materially from those suggested by the statements. These
risks include declines in our sales as a result of weather, demand
and other conditions that impact farm income, actions by producers
of competitive products, and changes in the general economy. For
more details on these and the other reasons that could cause actual
results may differ materially, please see the discussion of “risk
factors” contained in our Form 10-K for the year ended December 31,
2020, as filed with the Securities and Exchange Commission. AGCO
disclaims any obligation to update any forward-looking statements
except as required by law.
About AGCO
AGCO (NYSE:AGCO) is a global leader in the design, manufacture
and distribution of agricultural machinery and precision ag
technology. AGCO delivers customer value through its differentiated
brand portfolio including core brands like Challenger®, Fendt®,
GSI®, Massey Ferguson® and Valtra®. Powered by Fuse® smart farming
solutions, AGCO’s full line of equipment and services help farmers
sustainably feed our world. Founded in 1990 and headquartered in
Duluth, Georgia, USA, AGCO had net sales of $9.1 billion in 2020.
For more information, visit www.AGCOcorp.com. For company news,
information and events, please follow us on Twitter: @AGCOCorp. For
financial news on Twitter, please follow the hashtag #AGCOIR.
Please visit our website at www.agcocorp.com
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version on businesswire.com: https://www.businesswire.com/news/home/20210422006114/en/
Greg Peterson Vice President, Investor Relations (770) 232-8229
greg.peterson@agcocorp.com
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