AGCO Corp (AGCO) 2013 Q3 法說會逐字稿

Good morning, my name is Toni, and I will be your conference operator today. At this time, I would like to welcome everyone to the AGCO Corporation's 2013 third-quarter earnings release and conference call.

(Operator Instructions)

Mr. Peterson, you may begin your conference.

Thanks, Toni, and good morning. Welcome to those of you joining us on the call for our third-quarter 2013 earnings announcement. We refer you to a slide presentation, which is posted on our website at www.agcocorp.com.

The non-GAAP measures used in the slide presentation are reconciled to GAAP measures in the last section of the slides.

We will make forward-looking statements this morning including demand for our products, and economic and other factors that drive that demand; product development plans and timing of those plans; acquisition expansion and modernization plans; and our expectations with respect to costs and benefits of those plans; and timing of those benefits; and our future earnings, revenue and other financial metrics. We wish to caution you that these statements are predictions, and that actual events may differ materially. We refer you to the periodic reports that we file from time to time with the Securities and Exchange Commission, including the Company's form 10K for the year ended December 31, 2012. These documents discuss important factors that could cause the actual results to differ materially from those contained in our forward-looking statements.

A replay of this call will be available on our corporate website.

On the call with me this morning are Martin Richenhagen, our Chairman, President and Chief Executive Officer; and Andy Beck, our Senior Vice President and Chief Financial Officer. With that, Martin, please go ahead.

Thank you, Greg. Good morning to everyone joining us on the call. We appreciate your interest in AGCO.

We will start on slide 3, which summarizes our results for the record third quarter and record first nine months of 2013. We saw solid progress on both the top and the bottom lines during the quarter. Our third-quarter sales were about 8% higher than the third quarter of 2012.

Global demand for farm equipment remains very healthy, but conditions vary widely across the developed ag markets. We are seeing robust demand in Brazil, solid conditions in North America, and continued sluggishness in Europe. We continue to make strides toward our modern improvements programs, evidenced by nearly 200 basis points of improvement in our third-quarter operating margins compared to the third quarter of 2012. AGCO's purchasing actions, factory efficiency projects, and new product development are all contributing to our improved profitability. Sales growth and higher margins produced record earnings in the quarter of $1.27 per share.

I also want to emphasize that we are continuing to invest for the long term. Our product development expenses will be up nearly 15% this year, and our capital expenditure program is expected to exceed $400 million for 2013.

AGCO's tractor and combine production volumes are illustrated on slide 4. Third-quarter 2013 production was up about 7% compared to the third quarter of 2012. The production growth was strongest in South America, with more modest growth in our North American factories. Production was down slightly in Europe, where strong growth and our new planned assembly facility in Germany was offset by lower production levels at our Massey Ferguson and Valtra factories.

As we discussed last quarter, our full-year plant production is forecasted to be higher than in 2012. We expect total AGCO unit production for the full year of 2013 to increase between 5% and 7% as compared to 2012. At the end of September, AGCO's orders books were up in South America, and down in North America and Europe. We expect active end-of-year retail activity, which should support order flow in the fourth quarter.

Slide 5 details industry unit volumes by region for the first nine months of 2013. In North America, industry sales grew across all categories of tractors. The combine market also showed growth compared to the high sales levels experienced in 2012. Industry unit retail sales of tractors in western Europe were down modestly for the first nine months of 2013. Market results by country remained mixed during the first nine months over the year, with weather-related declines experienced in the United Kingdom, Finland and southern Europe, partially mitigated by growth in France.

Industry sales in the important German market were down slightly in the first nine months versus 2012. South American industry retail tractor volumes increased significantly during the first nine months of 2013 compared to the same period last year. Favorable exchange and financing rates, improved weather, and attractive soft commodity prices have generated strong demand in Brazil. Industry sales were also up strongly in Argentina.

I will now turn the call over to Andy Beck who will provide you more information on our third-quarter results.

Thank you, Martin, and good morning to everyone. I will start with a look at AGCO's regional net sales performance for the third quarter and first nine months of 2013, which are outlined on slide 6. Currency translation had a negative impact of approximately 1.8% on AGCO's consolidated net sales in the third quarter of 2013 compared to the same period in 2012.

The Europe, Africa, Middle East segment reported a decline in net sales of approximately 2%, excluding the positive impact of currency translation during the third quarter of 2013 compared to the third quarter of 2012. Sales declines in central and eastern Europe and the United Kingdom were offset by growth in Germany and France, largely enabled by Fendt's improved production capabilities. North America sales grew 9% during the third quarter of 2013 compared to the same period in 2012. Sales increases experienced in the professional producers segment generated growth in grain storage equipment, sprayers, and mid-range and high-horsepower tractors.

AGCO's third-quarter 2013 net sales in South America grew about 35% from comparable 2012 levels, excluding negative currency translation impacts. Higher sales in Brazil and Argentina accounted for most of the increase. Attractive commodity prices, favorable financing rates, and a weaker real all contributed to the strong demand in Brazil.

Net sales in our Asia-Pacific segment increased approximately 11% in the third quarter of 2013 compared to 2012, excluding the impact of currency translation. Growth in China, Australia and New Zealand produced most of the increase.

Parts sales were $370 million for the third quarter of 2013, an increase of approximately 11% compared to the same period in 2012, excluding the impact of currency. For the first nine months of 2013, parts sales were up -- or were just over $1 billion, up approximately 4% compared to the same period in 2012, excluding the impact of currency.

Slide 7 details AGCO's sales and margin performance. Gross margins improved over 100 basis points in the third quarter of 2013 compared to the prior-year period. Margins benefited from higher sales and production volume, limited material cost inflation, pricing, and cost reduction initiatives. Operating margins expanded nearly 200 basis points in the third quarter of 2013 compared to 2012 due to higher gross margins, and better leverage on our SG&A expenses.

Europe, Africa and Middle East operating margins were up over 130 basis points in the third quarter of 2013 from the same period in 2012 due primarily to higher production and sales levels, partially offset by higher engineering experiences. Our fourth-quarter margins were also benefit from favorable cost comparisons to the Fendt assembly plant start-up cost incurred in the back half of 2012, but will be partially offset by lower production levels in other European facilities.

North America's operating margins exceeded 11% in the third quarter of 2013, and were nearly 190 basis points higher as compared to the third quarter of 2012 due to increased sales, a favorable sales mix, particularly related to high-margin GSI sales, and cost control initiatives.

In South America region, operating margins improved 300 basis points in the third quarter of 2013. Higher sales volumes and cost reduction benefits resulted in the margin improvement.

Margins in the Asia-Pacific region were down due to increased market development expenses in China.

Slide 8 details GSI sales by region and by product. GSI sales were up about 9% in the third quarter, and year-to-date sales were flat compared to the same periods in 2012. US grain storage sales improved in the third quarter compared to last year's drought-impacted results, and accounted for most of GSI's third-quarter increase.

We are now forecasting GSI sales to be up between 5% and 7% for the full year of 2013 compared to 2012. Longer term, the global trends of population growth and changing diets are generating demand for additional grain storage and protein production capacity. The countercyclical nature of the protein production sector supports more stable earnings in GSI.

Slide 9 looks at our depreciation and capital expenditure trends. Our 2013 capital expenditures remain elevated as we continue to work to meet Tier 4 emissions requirements, refresh and expand our product line, upgrade our system capabilities, improve our factory productivity, and establish assembly capabilities in China.

Slide 10 addresses AGCO's free cash flow, which represents cash from operating activities less capital expenditures. We have managed our seasonal working capital requirements very closely this year, and are in a good position to generate strong cash flow in the fourth quarter. In terms of inventory metrics, at the end of September 2013, our North America dealer month supply on a trailing 12-month basis was in the five to six months' range for tractors, combines and hay equipment.

Other working capital details are as follows. Losses on sales receivables associated with our receivable financing facilities, which is included in other expense net, were approximately $6.7 million during the third quarter of 2013 compared to $5.8 million in the same period of 2012. As we have discussed throughout the year, we expect an increase in inventory at year end as we build the necessary transition stock ahead of Tier 4 final introductions during 2014. AGCO's strong cash generation will allow us to invest in our plants and new products, and continue returning cash to shareholders through our dividend and share repurchase programs.

Our 2013 regional market outlook is captured on slide 11. We are anticipating relatively flat demand on a global basis. In North America, farmers' strong financial positions and the expectation of near-record farm income in 2013 are expected to support healthy retail demand, especially in the professional farming sector, through the end of the year. Strong farm fundamentals are expected to continue in Brazil in 2013, and the attractive terms for the government financing programs are in place through the end of the year are expected to stimulate growth in excess of 15% compared to the levels in 2012.

We are expecting softer demand in western Europe, with weakness in the UK, and central and eastern Europe. Solid demand across France and Germany is expected to mitigate some of the weakness in other areas. We are continuing to expect 2013 demand in western Europe market to be down between 0% and 5% compared to 2012.

Slide 12 highlights the assumptions underlying our 2013 outlook. Our forecast assumes price increases of approximately 2% on a consolidated basis, and we expect the impact of currency translation to be relatively neutral. In 2013, expenditures on new product development and Tier 4 emissions requirements will cause an increase in engineering expenses of approximately 15%, or about $50 million. We also look for new products, and our productivity and purchasing initiatives, to drive improved gross margins. Our SG&A expense will include expenses associated with manufacturing start-up and market-support costs amounting to about $10 million for our Chinese operations. Lastly, our effective tax rate forecast is approximately 34% for the full year of 2013.

Slide 13 lists our views of selected 2013 financial goals. We are projecting 2013 sales in a range from $10.8 billion to $11 billion. We expect improved gross margins and operating margins from 2012 levels after significant investments in product development, market development, and start-up costs associated with our manufacturing projects. We continue to target EPS of approximately $6 per share for the full year of 2013. We expect increased capital expenditures to be in the $400 million to $425 million range, and free cash flow in the $200 million to $250 million range after funding the expected increase in capital expenditures and higher inventory levels associated with Tier 4 product transition.

With that, operator, we are now ready to take questions.

(Operator Instructions)

Ross Gilardi.

Could you just talk a little more about how demand trends unfolded as the quarter progressed, particularly as we have seen a further unit downdraft in corn prices? And any color you could provide by region would be really helpful too. Thanks. Thanks.

I don't think anything has really changed too much over the course of a quarter. Obviously commodity prices are down. But also you have to keep in mind that farm income levels are projected to be very strong in North America and South America and, in many cases, in Europe we are seeing good harvest and farm income should be very good there as well. So we are expecting the activity levels in our dealerships and retail demand to be strong for the balance of the year. And that is what we are focused on right now.

You took your production down just a little bit for 2013, I think, from plus 6 to 8 to plus5 to 7. Why was that?

The main reason was that we invested in some of our factories and productivity and efficiency increased pretty much. So therefore, we are just basically trying out how the new Fendt factory works. And the same is towards [or for] the Massey Ferguson -- main Massey Ferguson factory in France. And you will may see more [post] productivity gains in the future.

And how do you feel about your own inventories and your dealer inventories right now?

Everything is pretty much in shape, I would say.

Okay. Thanks. And then just lastly, trends for GSI -- you mentioned that improvement in North America accounted for all the increase in the third quarter. Have you seen slowing outside the of US? Any color you provide there will be helpful.

No, we are not. We are up substantially in Asia Pacific sales as well as in South America. Our sales for GSI are down for the first nine months in Europe. In Europe our business is much more project driven. It's not as much of a flow business but very large projects, particularly in Eastern, Central Europe. And just the timing of some of these projects -- we had some very large ones last year -- just getting started on some now. And so that market is still going to be very good for us but a little more up and down rather than a more consistent market like North America.

You will see some nice surprises in Eastern Europe for GSI in the last quarter of the year.

Okay. Thanks very much.

Nicole DeBlase.

On the pricing guidance, I think you're now expecting 2% pricing and it was 2% to 2.5% previously. I'm just curious where it's coming in a bit weaker than expected?

It's -- we're just seeing a little modest price -- less pricing in most of the markets. I wouldn't pick out one as any particular issue. Pricing is still fairly strong. I think the fact the inflation pressures on material costs are allowing the market not to have to discount -- not to have to price as much as maybe what we have seen. And so we are expecting some normal discounting going on at the end of the year that we see every year. But really no major change in what's happening out in the market.

Okay. Got it. That's helpful. And then just trying to get a sense on how sustainable the EAME margins are at this level. So I mean did you guys benefit from anything -- one time in the (inaudible) you've got the fully operational Fendt facility, positive mix probably because of France and Germany -- so just trying to get a sense of how margins will look year-on-year as we move into the fourth quarter?

So, Nicole, we're looking -- we expect EAME's margins for the full-year to be about 10% and we did see kind of the normal seasonality in the third quarter. We shut our factories down in August for maintenance, two or three weeks, typically, for most of the factories. So that influences demand -- or influences production, which is typically down 10% or 15% sequentially from the second quarter. So we did see an improvement year-over-year in our margins in the third quarter and we expect to see a similarly strong performance when you compare the fourth quarter of 2013 to the fourth quarter 2012. We are on track for the 10% that we talked about and think that is a sustainable level at these demand levels.

Okay perfect. That's great. I'll get back in line. Thanks.

Seth Weber.

Sticking in Europe -- can we talk about the -- I guess is there any more granularity on the order book? Is it -- can you frame -- you said it was down. Is that down 10%, 20% year-over-year? Is there any numbers -- are there any numbers we can put around that?

Not really because the main event in Europe -- we basically in Europe are expecting -- or let's say in November we will have the biggest farm show in the world which is in Hannover, Germany, called Agritechnica. It is a very global, very international show. All dealers go. All importers go. A lot of customers go. And so therefore, typically, before Agritechnica, orders slow down a little bit. And the real picture we will have when we come to Wall Street in December. So it is actually too early to talk about what is really going on and to talk about 2014.

What I would like to say so is that I think nobody in our industry is expecting major downturns in EAME but we are -- actually, everybody is looking into the question when does EAME recover? And I'm talking about most of the European countries. It's not a question will they go down further more, it's a question when does England come back? When does Sweden, Finland and Spain come back and Italy and so on? So I think this is the most important question.

And in our case for the future, I think we would like to see more coming out of Eastern Europe and maybe Russia. Because our business in Russia -- or the business in general in Russia is rather small. We basically opened, as Andy mentioned, a factory -- a joint venture factory in Russia and we expect basically getting more out of this. We meet the guys in November again. So I think we will come to Wall Street and you will like what we tell you in December.

Okay. Thanks. Are you still targeting production at the Fendt factory of about 18,000 units for this year?

Yes.

Okay. And I guess lastly on the GSI business, I think your prior target was 5% or 10% revenue growth for this year. That came in a little bit. Is that just on the Europe -- kind of the timing on some Europe contracts? Is that what I think I heard you say?

Yes, that's the main thing. No real change in market dynamics or anything else, just a little timing on some of the major projects.

Okay. Great. Thank you very much.

Jamie Cook.

This is Andrew [Vascelli] on behalf of Jamie. So given the risk of less favorable financing in Brazil, can you give your thoughts on that region into 2014?

In terms of the financing programs situation, where we are right now is that the [FINAME] program is in place through the end of the year. The interest rates on the FINAME program are about 3.5% right now. There has been no formal announcement of what the rates will be next year. Market anticipation is that there won't be a major change but could be a slight or modest increase in the rates into next year. But we don't believe that will have a material impact on demand.

Okay. That's helpful. And then just switching over to Asia -- you guys lost money again this quarter in that segment. Do you anticipate, or have a target for, some sort of breakeven level? Or can you just help us frame that for your guidance going forward?

Yes. So for the current year we do expect to be kind of breakeven-ish for the full-year plus or minus maybe 1% on the margins. Going forward and as we complete the plant in China, we will start production next year. We would expect to see sales volumes increase, although most of the production for that factory is going to be in the other region so you won't see it all showing up in the Asia-Pacific region. But over the next few years we would expect to see those margins climb back to corporate averages as sales ramp up there and as the development costs associated with that factory wind down and are covered by more sales volumes.

Okay. Great. Thanks, guys.

Stephen Volkmann.

Hi. Tom [Lauren] on for Steve Volkmann. A question on North American used pricing -- have you guys seen any change since last quarter?

No.

And a question on inventories -- have you -- I guess you previously said you are comfortable with those levels. Can you share any more detail on that?

As we've said, our dealer months supply is about five to six months on most our -- in our US dealer inventory levels. And so those are in normal ranges for us at this point in the year. They'll come down as we have -- we expect a very active year-end retail activity as we always do. So the inventory is built up at this point in time and then will come down throughout the rest of the year.

Thank you.

Andrew Kaplowitz.

Hi, guys. It's [Al Flemming] on for Andy this morning. I wanted to ask you if we could get a little more color on the order boards in North America. I think last quarter you said they were relatively flat. And if I heard Martin right, you said they were down a little bit this quarter. So is this more timing? Is this have anything to do with the late harvest and perhaps some of the order activity that you typically saw in the last couple weeks or month or so get pushed out towards later in the end of the year? Or are you seeing or hearing from your dealers that they are experiencing some slowdowns in order activity?

No. I think it's -- our order board I would call is pretty solid right now in North America. We do -- it is down a little but it's not substantially down. But the situation is that we have a good order board in almost all our product lines. There is some differences compared to prior years because of the timing of new product introduction and Tier 4 product programs and things like that. So it is not always easily comparable from year-to-year but generally we characterize it as a solid order board.

Okay. That's helpful. And then if I can switch gears over to Europe, and if I can just ask did European sales come in generally in line with your expectation? I think when you look at [ex] currency, sales were down a little bit and the comparisons were relatively easy because of the Fendt production issues and a year ago. So are the markets generally stable or are they getting worse or just not getting better right now? And then if you could just provide --

We are in a record quarter and in a record year. And so we actually need to be careful here not to be too conservative. But we, let's say, in general think that the market has some upside potential.

And as I mentioned before, everybody is actually expecting Europe to sort of come back to the high levels we have seen maybe in 2007 or so. So that means this is the main question. It is not so that we are disappointed by the performance in Europe or by the markets but we think those markets could be stronger in general.

Okay. And did you have any inefficiencies in the Fendt facilities this quarter or have you guys generally worked all those kinks out?

No inefficiencies whatsoever. So we are doing fine. We are actually -- you will see that we are getting better and better. It is a major change of the layout. This is now the most modern tractor assembly factor in the world. We did do a lot of benchmarking up front with the automotive industry because we thought this is where we can learn from. And so those productivity improvements, of course, come in every quarter so to say and we have -- so far we are very pleased with what we are seeing.

Okay. I'll leave it there. Thanks, guys. I appreciate it.

Adam Fleck.

I wanted to stick on North America. Can you just update us maybe on first Challenger's revenue growth year-to-date and how the market share is trending for that product?

Sure. Challenger year-to-date sales are up about 7% from where we were a year ago. And the business continues to develop quite well. That is the main source of improvement that we are seeing in North America through the Challenger branded products and the Challenger dealers. As you know, a lot of those Challenger dealers are Caterpillar dealers and we are seeing significant investments by those dealers to further position themselves in the ag sector. And things are going quite well in that regard.

Yes. You can see very strong companies like Butler, (inaudible), [Ziegler] investing more in our business. And that types of things if you took all the Challenger business in the US.

Okay. Great. Thanks. And then turning to the industry side and your forecast there -- you obviously maintained your full-year outlook for North America, even though tractor volumes are up 12% year-to-date. By my math, that suggests a pretty difficult fourth quarter. I don't know what you're seeing there in particular -- if it was just conservatism -- any details would be helpful there.

I would call it not just conservatism but we are conservative.

Okay. Thanks.

Ann Duignan.

Good morning. It is Mike [Sluyski] filling in for Ann. With grain prices lower, just wonder if you could give me -- give us a little commentary about if you are seeing any change in demand for GSI product or for tractors coming out of the livestock industry?

For GSI I think it is more positive because if you are a farmer, you basically think about whether you would like to sell your harvest later. So that means you might invest in grain storage. And the second part of the question I didn't get. Protein --

So we have seen a pickup in the midsize tractors for some of those dairy and livestock guys. And also with that we would expect to see heavier orders -- or continued heavy orders for the hay products. So that's balers, windrowers -- those kinds of things. So there is some offset then as you see maybe a slowdown if you do on the row crop guys -- the dairy and livestock and the protein producers, typically -- see their margins go up and that is when we would expect to see stronger sales of those products that we just talked about.

Great. Thank you so much.

Ashish Gupta.

Martin, I'm just wondering with the balance sheet sort of now almost fully delivered after GSI and the strong free cash generation -- it has been a while since you've announced the deal. I'm wondering how the M&A pipeline looks?

Well we -- as you know, we launched a (inaudible) which is pretty much based on organic growth with some exceptions. What my proposal is, when we come to Wall Street in December, you will hear about our plan for the -- for year 2014 and what we intend to do with our cash.

Okay. So stay tuned.

Yes. You will like it. I'm sure you will like it.

I'm sure I will. Greg, you touched on incentives a little bit that you're seeing normal year end -- end of year push. The trades have been talking about just a little bit more aggressive incentive activity. I'm wondering if you could comment any further if you just think it is normal.

I think normal. There is a lot going on, especially in the US, with some expiring tax benefits. The farmers have had a very good year, a good harvest in most cases and commodity prices have been okay. So farm income is going to be good.

So we are continuing to see pretty rational markets and we are seeing some discounts as you would normally see at the end of the year as you work down your inventories. But there's nothing I would really characterize as crazy going on.

Okay and then I guess if we look at Agritechnica two years ago and, if I remember correctly, it was a big boost for the order board. I'm just wondering how you would characterize the environment now with two years ago. It's sort of been -- maybe you could just provide some more context.

Yes. I think overall I would describe it as similar. So it is too early to know because we still almost have a month to go. But when you talk to, let's say, the best people who maybe know a little more because they are closer to the customer and closer to certain markets -- when you talk to the European midsize family owned companies, they are in a pretty good mood. So it is a first indicator that we should see some support coming from Agritechnica. The attendance is excellent so but it's too early to know to be honest.

Thanks so much and good luck with the quarter.

Thank you.

Steven Fisher.

I'm wonder if you could just talk about how your order intake on final Tier 4 products has been since they were introduced? And then if you could give a little more color on the mix in the North American orders that you saw in the quarter?

Well I would not like to do that regarding the mix in between the engine selection because this is kind of proprietary information and everybody, of course, has their strategies and I don't want to disclose that. But with the rest, I handover to Andy.

Okay. Well there is really not a major change there from what we have seen throughout the year. We're just starting getting orders for next year into the system. So early order programs and the like are going on right now. So it's a little too early to draw any conclusions from those.

Okay. And then just because we have seen some headlines in the industry recently, I'll ask about it. I'm just wondering if you have made any demand-driven headcount reductions in the last few months anywhere? And if not, do you anticipate any in the in the next few?

You saw that our sales and production are up so there's no reason for headcount reductions. Of course, we are lean. We are comparably much leaner than some of our big competitors and it is an ongoing challenge to stay lean. So but we don't plan headcount reduction.

Okay. And then just on the Tier 4 inventory buildup -- I think earlier you were expecting about $125 million. Is that still the number?

Yes. That's pretty close. It will be in that range by the end of the year. So we have been building it up throughout the year. The fourth quarter is the biggest amount of the buildup. But we will get to that number by the end of the year.

Okay. Thank you.

Ladies and gentlemen, we are reaching our allotted time for questions. Your final question comes from Jerry Revich.

I am wondering if you could talk about how we should expect the, I guess, efficiency profile for the Fendt facility to track heading into next year? On prior upgrades you have been able to continually prove your throughput, call it, a year or so after the transition. I am wondering where do we stand in the Fendt facility? And you outlined your margin expectations for the full-year, but just help us understand the opportunities that go beyond the fourth quarter.

If we talk about it and we talk about 2014 which will be in December. So you will get a detailed plan and budget for 2014 in December.

Right. But can you talk about where you are in the transition? Obviously you handled all of the [Europe] issues you were working through. Can you just give us an operational update on where the facility stands?

Yes. So as you know following AGCO, in the third or fourth quarter last year we had some normal ramp up issues and costs associated with that. As we moved into the first quarter and second quarter of 2013, we still had some -- particularly in the first quarter -- cost above normal.

As we got into the second quarter and now in the third quarter, we are back to where we were and performing quite well in that plant. And we expect to have -- be very -- have high productivity in the fourth quarter this year with substantially higher production than a year ago in the Fendt facility. So as we move into next year, it should be still smooth sailing and we are looking for more opportunities for productivity as we move forward just like we do in all our plants.

Okay. And, Andy, last question on interim Tier 4, you folks transitioned pretty seamlessly at the factory level. Should we think about the Tier 4 final transition as similarly straightforward for you folks over the next 12 to 18 months?

Yes.

Yes. What we do is we spread those new introductions out throughout the year so that it doesn't all come in one quarter or one month or anything like that to give the plants the time to make those transitions as seamlessly as possible.

Thank you.

There are no further questions. Presenters, do you have any closing remarks?

Yes. Thanks, Toni. I just wanted to thank our participants for the interest in AGCO today and encourage them to follow-up with me later if they have additional questions. Thanks and have a great day.

Thank you for your participation. This does conclude today's conference call. You may now disconnect.