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1. Company Snapshot

1.a. Company Description

Ag Growth International Inc., together with its subsidiaries, manufactures and distributes grain and rice handling, storage, and conditioning equipment in Canada, the United States, and internationally.The company offers storage equipment comprising grain and bolted bins, hopper bins, smooth wall bins, temporary storage equipment, unloads and sweeps, water tanks, fuel tanks; and conditioning equipment, such as mixed flow dryers, fans and heaters, aerations, airaugers, aeration floors, vents and exhausters, stirrings, and accessories.It also provides portable handling equipment, such as portable augers, conveyors, grain vacs, post pounders, seed treaters, and accessories; and permanent handling equipment, including bucket elevators, chain and belt conveyors, enclosed belt conveyors, distributors, feed handling equipment, screw feeders and conveyors, and spouts and connections.


In addition, the company offers towers, catwalks, ladders, all-steel buildings, flat storage buildings; batch blenders, bulk scales, declining weight blenders, vertical blenders, micro-dosing systems, mixers, milling equipment; and controllers, hazard monitoring equipment, monitoring and automation equipment, sampling solutions.Further, it provides cleaning and destoners, rice milling and processing equipment, bin unloads, blending and control systems, Liquid and dry fertilizer blending and conveying equipment, turnkey design and build construction solutions for seed and fertilizer facilities, and farm management software.The company markets its products under the AGI, Airlanco, Batco, Brownie, CMC, Compass, Danmare, Ezee-dry, Frame, Grain Guard, Grainmaxx, Hi Roller, Hutchinson, Improtech, Junge, Keho, Mayrath, Milltec, MMS, Neco, PTM, REM, Sabe, Sentinel, Storm, Suretrack, Tramco, Twister, Westeel, Westfield, Wheatheart, and Yargus brand names.


It provides its equipment for agricultural commodities.The company was founded in 1996 and is headquartered in Winnipeg, Canada.

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1.b. Last Insights on AFN

Ag Growth International Inc.'s recent performance has been negatively impacted by the withdrawal of its adjusted EBITDA guidance and delay in reporting Q3 financial results. The company cited the need for additional time to finalize accounting related to its Brazilian operations and review internal controls. This development has raised investor uncertainty regarding the company's near-term outlook. Additionally, the company has delayed filing its unaudited interim financial statements and related management's discussion and analysis. The revised timing of the Q3 results release and conference call has also been announced.

1.c. Company Highlights

2. AGI's Q2 2025 Earnings: A Mixed Bag with Commercial Segment Shining

AGI reported a flat revenue of $349 million in Q2 2025 compared to Q2 2024, with adjusted EBITDA of $54 million. The company's EPS came in at $1.13, beating estimates of $1.05. The Commercial segment was a standout, with revenue growth driven by large-scale projects in Brazil and EMEA, contributing $37 million to EBITDA, up 58% year-over-year. However, the Farm segment faced challenging market conditions, with soft commodity prices and elevated dealer channel inventories leading to compressed adjusted EBITDA margin percent.

Publication Date: Aug -22

📋 Highlights
  • Commercial Segment Strength: Generated $37M EBITDA, up 58% YoY, driven by Brazil and EMEA projects.
  • Order Book Growth: Consolidated order book reached $660M (+4% YoY), with 85% from Commercial segment.
  • Debt Reduction Target: Plans to monetize receivables to pay down $80–100M in debt by year-end, reducing net leverage to 3x–3.5x.
  • Capital Spending Cut: 2025 capital expenditures reduced to $40M (down from $70M) to align with cash flow priorities.
  • ERP Cost Timeline: System transformation costs will persist through 2026 but decline significantly after full deployment in 2027.

Segment Performance

The Commercial segment's strong performance was driven by a favorable customer base and installed equipment base, with revenue up nearly 10% for the quarter. The Farm segment, on the other hand, is navigating challenging market conditions, but is seeing improvements in Brazil and Australia, driven by the portable product line. As Paul Householder noted, the farm equipment replacement cycle is typically around 7 years, and the company expects it to become a catalyst for demand at some point.

Order Book and Revenue Outlook

The consolidated order book stands at $660 million, up 4% year-over-year, with the Commercial segment contributing 85%. The company expects Commercial revenue to be up year-over-year in the second half, while Farm revenue will be stable or soft. Overall, the company expects revenue growth in the second half of the year. With a strong quoting pipeline across various regions, AGI is well-positioned for sustained momentum.

Valuation and Cash Flow

With a P/E Ratio of -113.55 and EV/EBITDA of 8.04, the market is pricing in a certain level of growth and profitability. AGI's net debt leverage ratio increased to 3.9x, but the company is targeting a ratio in the low to mid-3x range by year-end. The company plans to monetize receivables in Q3, with continued monetization through Q4, which will help pay down debt. Free Cash Flow Yield is currently at 0.15%, indicating a relatively low cash return.

Outlook and Conclusion

AGI's management is optimistic about the company's growth opportunities, particularly in Brazil, where they have completed studies on their manufacturing capacity and acquired additional land for future expansion. With a strong order book and quoting pipeline, the company is well-positioned for sustained momentum. However, the market will be watching closely to see if AGI can deliver on its margin expectations and improve its cash flow generation.

3. NewsRoom

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How Analyst Sentiment Is Shaping the Changing Story for Ag Growth International

Dec -02

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AGI Announces Grant of Management Cease Trade Order and Provides Bi-Weekly Status Report

Nov -28

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How Recent Setbacks Are Reshaping the Outlook for Ag Growth International

Nov -18

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Investors in Ag Growth International Inc. (TSX: AFN) are urged to contact Siskinds LLP about its investigation into a potential class action

Nov -17

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Ag Growth International (TSX:AFN) Is Down 39.9% After Withdrawing Guidance and Delaying Q3 Results Has Confidence Shifted?

Nov -17

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A Look at Ag Growth International (TSX:AFN) Valuation Following New High-Capacity Grain Conveyor Launches

Nov -15

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AGI To Delay Third Quarter 2025 Results

Nov -13

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AGI Announces Revised Date For Third Quarter 2025 Results Release and Conference Call

Oct -30

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.91%)

6. Segments

Farm

Expected Growth: 6%

Ag Growth International's Farm segment growth is driven by increasing global demand for grain storage and handling solutions, expansion into new markets, and strategic acquisitions. Additionally, investments in digital technologies and automation are enhancing operational efficiency, while a strong order backlog and growing demand for fertilizer and seed handling systems also contribute to the 6% growth.

Commercial

Expected Growth: 8%

Ag Growth International Inc.'s commercial segment growth of 8% is driven by increasing demand for grain handling and storage solutions, expansion into new markets, and strategic acquisitions. Additionally, investments in product innovation and digitalization, as well as a strong focus on customer relationships, contribute to the segment's growth.

7. Detailed Products

Grain Handling Equipment

AGI's grain handling equipment is designed to efficiently and safely handle grain from harvest to storage. The product line includes grain augers, conveyors, and elevators.

Seed Treatment Equipment

AGI's seed treatment equipment is designed to apply seed treatments and coatings to seeds, enhancing seed germination and plant growth.

Fertilizer Application Equipment

AGI's fertilizer application equipment is designed to accurately and efficiently apply fertilizers to crops, promoting healthy plant growth.

Storage and Handling Solutions

AGI's storage and handling solutions include grain bins, silos, and other storage systems designed to safely and efficiently store grain and other commodities.

Aeration and Drying Systems

AGI's aeration and drying systems are designed to manage grain moisture levels, preventing spoilage and ensuring quality.

8. Ag Growth International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ag Growth International Inc. operates in the agricultural industry, which has a moderate threat of substitutes. While there are alternative products and services available, the company's focus on grain handling and storage solutions provides a unique value proposition to its customers.

Bargaining Power Of Customers

Ag Growth International Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often customized to meet specific customer needs, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Ag Growth International Inc. relies on a network of suppliers for raw materials and components. While the company has some bargaining power due to its size and scale, suppliers may still have some negotiating power, particularly if they are sole-source providers of critical components.

Threat Of New Entrants

The agricultural industry has high barriers to entry, including significant capital requirements and regulatory hurdles. Additionally, Ag Growth International Inc. has established relationships with customers and suppliers, making it difficult for new entrants to gain traction in the market.

Intensity Of Rivalry

The agricultural industry is highly competitive, with several established players competing for market share. Ag Growth International Inc. faces intense competition from companies such as Cargill, Archer Daniels Midland, and Bunge, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.28%
Debt Cost 10.15%
Equity Weight 26.72%
Equity Cost 15.78%
WACC 11.65%
Leverage 274.22%

11. Quality Control: Ag Growth International Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lindsay

A-Score: 6.0/10

Value: 5.3

Growth: 6.4

Quality: 6.7

Yield: 2.0

Momentum: 7.0

Volatility: 8.3

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Alamo Group

A-Score: 5.8/10

Value: 5.2

Growth: 7.1

Quality: 6.6

Yield: 1.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Ag Growth International

A-Score: 4.3/10

Value: 6.1

Growth: 4.8

Quality: 2.7

Yield: 3.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Manitex International

A-Score: 3.8/10

Value: 4.6

Growth: 4.7

Quality: 3.5

Yield: 0.0

Momentum: 6.0

Volatility: 4.0

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Titan International

A-Score: 3.7/10

Value: 6.6

Growth: 4.7

Quality: 2.3

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

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Columbus McKinnon

A-Score: 2.6/10

Value: 5.2

Growth: 2.1

Quality: 3.4

Yield: 2.0

Momentum: 0.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.7$

Current Price

21.7$

Potential

-0.00%

Expected Cash-Flows