AGCO (AGCO) 2 May 242024 Q1 Earnings call transcript

Good day, and welcome to AGCO First Quarter 2024 Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Greg Peterson, AGCO Head of Investor Relations. Please go ahead. Mr. unmuted. is line your Peterson, Please go ahead.

good Thanks, you to of Welcome us Jigar, for Call. and joining Earnings AGCO's those XXXX morning. First Quarter

posted to this www.agcocorp.com. refer slide on that's will at our We website a morning presentation

development as expenditure benefits and non-GAAP discuss and will costs our GAAP those in capital other plans price crop make those strategic expectations initiatives our to levels, margins, and forward-looking plans plans The are this It production revenue, demand, morning, levels, presentation. and well of timing metrics used and and of financial slide the in of earnings, production metrics. presentation concerning the income, their flow measures including We'll and also benefits. reconciled that statements appendix timing product financial We'll and impacts. the cover statements future as plans farm those of about cash

risks in differ new putting risks suggested cause changes are with the All improved could to products, failure the actual on product develop performance and within expected chain parts the in smart that demand, possible agricultural of prices, these supply time, are farming industry, but include, the to results and adverse premium and by weather, limited supply and not technology subject developments products solutions of and interruptions budget benefits. price commodity inflation, to, in those from statements. to disruption, materially These

PTx and customer PTx customers expected including by OEM venture of competitors PTx transaction, integrating results, the difficulties to rate sales. includes reduces largest in which those purchases equipment manner by Trimble's rate produces the in the business and at the financial of replacement Also a that the Trimble joint reactions Trimble of the the

businesses of produces markets. manner in buyback, financial acquired financial introduction includes the our difficulties in results and and modernization plans in improved war foreign competitors new in a completing that adverse reductions time by on exchange in and the in pricing integrating Ukraine, and changes expansion the also or the products it And expected and

materially concerning ended these and suggested could year Securities these Exchange for XX-K subsequent with Form the XX, results in and those Form the statements. XXXX, differ and in our Actual December from Commission, other included filings including XX-Q AGCO's risks filings. Further information

any disclaims update except corporate obligation as later today by this statements, available a to We'll required replay AGCO make website. forward-looking any call our on law. of

Chief Officer. On with the this Senior Executive as call our morning as Audia, Eric Vice well and Chairman, are Financial Chief me and Hansotia, Damon our President Officer; President

Eric, go With that, ahead. please

good and morning. Greg, Thanks,

to get I drivers to to and in details the structure quarter, the our team on margin in as history focus the continue integrating confidence Despite as our by well X adjusting position want company. growth staying and second of Trimble our Before industry into PTx I cost take of express production the weaker level year moment of XXXX strategy. full conditions, all to the a highest have and my agile adjusted operating the

With results. first quarter let's that, AGCO's at look

XX% from approximately basis reported First on year agricultural global X.X% market for down sales in end last an of and margin which X.X% operating adjusted on demand net a quarter Consolidated came to $X.X sales billion, due was at XXXX basis. net was softening equipment.

leverage end production our margins. in and reducing quarter the on focused controls align operating industry our to We sales further were in markets. more cost factor Lower a the decline slowing and than tightened with reduced

last high all-time an the all margins Europe, better first had were helped quarter European of and down the points the XXXX in flat regions. impressive compared declines year. margin XX.X%, sales in operating of quarter basis Despite than being region quarter first industry of to the other Stability operating offset an sales partially first XXX in yet

weakened even to in industry first Margins operating which as our in XX% quarter of nearly pressured XXXX of retail expected. quarter first X.X% in further South And the dealer also we underproduced Brazil. lower Market our the of there, we helped margins demand XXXX. compared region. -- in saw than remained in the weak And the approximately America remained demand inventories

More challenging conditions due market XXXX expected prices to commodity continue global in income and expectations. to lower farm are reduced

As a XXXX. lower sales result, AGCO in is forecasting

reduction and focused challenges, on mitigate we dealer lowering efficiencies company inventory. To driving increased these will opportunities, and remain manufacturing expense SG&A cost

and expected growing dampen are In to business, us addition, our parts AGCO's cycle. help products full-line ag precision the Fendt-branded ag business

to helping and farmers, To solutions our serve sustainably continue technology, while digital farmer-first the will capabilities support strategy we feed investments enhanced to our smart farming better in premium world.

retail industry first equipment industry by all for were farm AGCO's quarter key retail unit markets. in first the sales of Slide X Global of in region quarter the details lower sales XXXX. of

than a the farm North America compared months X sales XXXX. fleet were are first to and larger of in the weaker sales XXXX full of North demand X% retail in categories. decreased industry months the Sales first during significant to refreshed industry resulting Lower compared X projected declines industry XXXX, in equipment of equipment income smaller most pressure to more America expected XXXX.

producers Farmer levels some expected Ukraine to Europe, sales compared cost has continued decreased livestock as is negatively of of soften be XXXX sentiment impacted to decline. in demand and conflict in retail healthy during mitigate months X% arable tractor the industry demand the XXXX dairy X income to lower in the Western period of to the same and In from demand first by XXXX. pressure is while expected Industry this from inflation. input farmers, region

the the moderate X during XX% Argentina XXXX. tractor very months and Brazil most American South compared demand markets a first retail industry of smaller sales months South X in American showed in declines industry while strong decreased of after XXXX in to the XXXX. weak the weakness, first sales were

in strong X is as farm South lower demand and further to in XXXX of Following a expected America prices soften retail years, result commodity income.

in significantly XXXX. was all down industry first regions combine the in tractors, quarter of the to Similar

conditions Although underlying over market extremely the we remain conditions from last years, few about the industry long-term the fundamentals positive supporting continue the to ag strong soften demand.

of at levels. recent higher commodity Stocks remain versus are they profitable prices supportive but levels historical these than lows,

the As for driving and will prices. strongly, need energy aviation vegetable commodity demand like grow farmers solutions clean further oil-based demand support fuel for sustainable that grows, the diesel our the will for

such Also, fertilizer fuel as in from input are down costs and their peaks XXXX.

down We but relative to industry expect to demand. long-term farm supportive income XXXX, in averages be of to XXXX closer the still

are shown Slide factory AGCO's on XXXX production hours X.

approximately than were period North and in taken production biggest XX%, the first in quarter South decreased regions XXXX. all America same versus by reductions Reductions more in with expected Our the slightly the America. in

demand. to softening company retail and match the inventory We are aggressively managing our dealer

mentioned the all first channel have made regions destocking in As we in earlier, progress do. still I the but dealer to quarter work in

all with expect to X. by production regions We aligning cuts further quarter during retail demand XXXX

share XX% XXXX Currently, reduction XX% market market This forecasts, production targeted reflects dealer basis. assumptions expecting we're reductions in lower XXXX to year to inventory. our XXXX and full versus a growth on

Relative to historical In to healthy are X demand products patterns, level That's we tractors of X months solid. pre-COVID. our compared coverage. orders order accustomed a remain Europe, months to to for had the X

the like targeted continue share in months in of horsepower of still we levels as the optimal grow region. approximately below levels high certain with our line Fendt certain are in X to inventories with products tractors areas supply Dealer

We our year-end. X XXXX. in we In to level production continue of XXXX And South quarter both have advance X to XXXX and order inflationary target through dealer quarter pressures. be cut X to XX% limit is we have X all X X our than across due our now inventory America, coverage of We the quarter where products, around by months months. between orders and to while goal months in more by region X in is June

our order inventory months months is In of just and over North while America, have X dealer coverage, we currently supply. between X of X

North the X inventory target dealer Our on depending months range product. X America for to from

to demand focus down coupled We dealer inventories retail with range targeted bring execution by continue to market year-end. share retail our to on underproducing

X Slide are and precision to fleet the and at AGCO brand, Fendt factory-fit high-margin focuses global supports not and significantly only increasing X on levers by market our our of you'll rollout our margins OEMs. product our globalization farmers where To to for reiterate, these our mid-cycle which also improving X% retrofit parts operating growth Moving and X, to XX% levers parts the growth X% solutions of on outgrowing annually. industry mixed business business, see genuine but the focusing full-line ag growing technology accelerating share aimed and

as will PTx. You represent leading on ag to new Trimble. how we the have slide, I PTx unified and brands multiple the under a of which as portfolio notice well our moment logos precision wanted them our take of PTx to brand, elaborate combination on newest this

portfolio is closure ag our joint of seamlessly will is which Trimble April and how simple shows X X. PTx our PTx Slide powerfully branding formed heritage. portfolio of PTx the rooted with solutions. PTx in the the with on venture This compatible, we precision name that Part Trimble, transformative new provide

We of Trimble part they technology ultimately crop what enhances the matter with stack disruptive farmers offerings every This excited AGCO aspect are as that to cycle, use. ag technologies AGCO's our have helps of no brand technology tremendously deal serve significantly family. which us cover better

world make already the with farmers ag latest PTx help retrofit vintage they any farmers X dealers Specialized of will own serve through will equipment approaches. go-to-market the around technologies. precision or almost

at can relationships will its from OEM integrate will that technology PTx Massey the from Valtra, with leading new PTx the directly expand also factory-fit XXX portfolio. factory. the AGCO's Similarly, also offer brands, PTx than and Ferguson more Fendt, from machines portfolio products partners

and farmers world. drive the better more JV be to The around next-generation growth will to technologies outsized even positioned provide

presenting Planting portfolio. are visual of to evolving of addition a market, also to the new Precision part brand the PTx the identity In unified offering as we

T P in represents we that the the ways. intelligent agriculture. technologies. all represents together increasing solutions technologies we're the precision Taken and represents create multiplying the farmer-centric fact and by X bringing The our impact And and together, seamless, advanced

offerings see Slide equity plan in we streamlined simplify build to you our how On to portfolio. can X, and farmers present a PTx,

the brands We in precision tech market-leading critical precision will industry. ag create needed a the brand. represent ag precision talent mass Together, the teams best for consolidate AGCO's ag to these

team will to and development, OEMs. serve one best on and We channels collaborate who cohesive both how will form product go-to-market farmers

We precision problems, solutions than to ag together, fleet other's strengths bringing will innovate, market the grow anyone else. mixed each solve and faster complement

bring will Elektronik. brand. Planting Trimble Headsight PTx Muller JCA and Agriculture, and Trimble Bilberry its Technologies, under IntelligentAg Precision includes

summarizes X Ag our Slide business. Precision

focused As to from stays expanding as mid-teens low we highlighted we spend. in our farmer total of percentage machinery spend, agriculture are a just which market addressable on the before, traditional

our helping AGCO precision With will role profitability. all targets ag our set improve positions customers while a investment in precision areas. ag sustainability farmers sights are in it to our major that effectively both currently the play or nonland global We established, achieving impact well simultaneously around being XX% and their portfolio, our believe as our

Now XXXX ag form that remain the PTx we Trimble, annual goal to to sales venture closed of we committed billion by achieving on $X joint precision have our in

With I'll over Damon. it hand to that,

XX you, contributed quarter. provides of the to to Thank in performance an excluding overview currency first the Slide Net the in approximately effect higher of when regional of first compared Eric. quarter, down sales the were quarter Pricing the XXXX which positive was net the X%, quarter XX% for sales. translation. sales around

favorable was the Germany Europe/Middle compared impact Growth excluding other sales East offset in the was XXXX of first flat products, in region, increased same offset quarter currency sales high period horsepower other segment the European in to nearly across By and sales pricing in XXXX, of and reported especially the markets. translation. France by declines tractors, Positive products. of all by Fendt lower

slightly Significantly modestly American the approximately sales excluding XXXX, months industry which drove X first decreased and for of lower most softer impact of the of compared of The South the by period same substantial Brazil Argentina. sales decrease tractors higher in was in favorable in to the translation. sales decline. XX% currency of sales combines, accounted net sales XXXX offset

compared Net impact region decreased the currency American quarter of XXXX, sales the the first of of translation. in XX% North the favorable excluding in to approximately XXXX same period

tractors as offset sales occurred by the partially as hay The pricing. combines. equipment, were sales well industry midrange in significant most positive Softer declines

decreased X of compared in of months XX%, due XXXX in currency to Pacific/Africa drove the Lower first Australia end to sales Asia impacts in and weaker decline. the China in most excluding market sales the Net translation negative same XXXX demand. period

quarter, $XXX X% the the of down effect Finally, consolidated for first approximately were approximately translation. sales currency X% positive or part replacement excluding year-over-year million

Turning Slide XX. to

higher These strong in a The net XXXX. margin XXX by the first were first affected versus operating quarter SG&A adjusted of points by declined weak expenses. Margins mainly and items the quarter offset engineering increased of production, the conditions, reflective discounts positive quarter and basis were industry significant by higher pricing. in decline partially

from margins net engineering and mix, increased the in $XX.X the and by million, income X higher improvement operating XXXX. first SG&A was by basis By offset of operations points pricing expenses The improved months XXX driven and positive segment expenses. region, Europe/Middle by East partially

North compared and XXXX, to first $XX.X SG&A operations engineering expenses. from production for the X increased operating margins the American were months and income and million as period decrease decreased from X.X%. The XXXX in sales as of lower well same resulted

the and accrual, was reversal by as positively which affected Operating in margins quarter volumes a X% quarter. XXXX lower first margins pricing. approximately a sales in million The of primarily production approximately compared well improved by significantly decreased lower negative termination dealer as the of America this South the was XXXX. same months $XX result in X to by of This decrease period

by Pacific/Africa the Finally, in same Asia million lower in first the XXXX months to $XX decreased compared to our XXXX period in sales volume. operations X of from income due segment,

cash Slide XXXX. our year-to-date and XXXX XX for details free flow

is As as cash property, divided adjusted represents equipment. flow free plant cash free provided and income. purchases conversion free cash defined And a less flow used cash operating reminder, by net of activities by flow or in

cash of of XX% XXXX, capital the quarter related lower million quarter of $XXX than first or and approximately the working primarily million improved used to first in We expenditures. capital XXXX $XXX less

income. year, be of our upper in adjusted cash of range For we target full the to flow long-term our XXX% anticipate of half net the XX% to free

XXXX. We investors remain in returns to focused on direct

$X.XX of In $X.XX addition dividend dividend a share quarter. of quarterly second we the share, declared also in regular variable per special the to per

profitability joint This is we closing how is transformed variable of us effective the the fourth the venture, deploying most paying the of dividend for in now our year the ways in on variable focused confidence Trimble special long-term Even remain have sign another the dividend. consecutive with our special PTx of possible shareholders. capital and our

X our major forecast market retail our for highlights Slide XXXX XX regions.

in crop expect decline For lower to North The to row was small decrease prior in by continue also levels compared segment expected of XX% expected is after equipment years America, strong XXXX. that segment to income. compared to be fueled demand XXXX, levels is to of tractor slowing the we years. decrease high farm The several horsepower the is to the of although growth rate high

to down For industry and average expect due continue long-term to to the is XXXX. nearing Western prices X% costs. income Europe, Farm the region for the we to be to commodity XX% compared reduced higher input

In down we have XXXX South reflect estimate sales had updating our our XX% we tractor to XXX are to a more America, horsepower, for than and in than deteriorated industry The XX% greater compared industry combines planters reduction. approximately previous guidance anticipated. of even

farmers shortfalls region, are awaiting financing grain Farmers in to holding the And subsidized on prices. are higher in programs causing longer postpone the purchases. to

where short the affect in one end Brazil, increasing. this farm attractive the term, remains long-term in especially this most markets, demand is the of may Although region footprint

we in dampen business retrofit expect and While expected remain decline farmers precision AGCO's brand-agnostic to to the our XXXX. in help volatile. And levels margins a XXXX, profitable should to less ag from generally is farm cycle, strong our elevated parts income making approach

Starting fourth to from of $XX.X initial XX, Slide share adjusted operating our margins from reconciliation and the highlight our approximately what On share and outlook X the on of $XX.XX. earnings around on communicated today. a adjusted of reflected per call we February of adjusted earnings adjusted of per earnings quarter sales XX% left, operating sales, billion, margin

which and partially sales outlook, translation approximately inclusion our of industry Trimble negative million of our reduced reduction the joint assumption sales by outlook balance venture PTx American approximately pricing modest outlook the by is effect The with offset of the $XXX the currency in the weaker the coupled million, South of for change, $XXX year.

is outlook down new $XX.X sales to billion. Our slightly

adjusted remaining joint adjusting heightened margins is XX% and the before XX.X%. the on operating range adjusted margin We of the the business operating PTx our continued strong the margins out at helps The from of Our anticipate to raise PTx cost focus XX% year now taking Trimble us mitigating margins leverage. the erosion in Trimble venture. lower high for full operating impact business of

$XX currency Our the of new factors, lower other slightly of reduction in the PTx effective multiple The basis. a on including expense partially offset a related pricing assumption Argentina incremental on as as adjusted venture. the in tax of EPS increased an a expense combination by FX guidance earnings EPS affect translation, is foreign This consolidated interest changes, assumption, currency of inflation continued related that to approximately Trimble is effect income and industry losses and Trimble. the the to acquisition the debt is consolidation rate PTx of joint and well

on related for reconciliation you The any reflect they of activity, Trimble AGCO. PTx figures sales X of exclude other parts and to this see months

at This be debt from first realize earnings we reiterated post back April AGCO's the and on synergies the said AGCO of year, X we distribution earnings as per operating we model share combined accretive in full adjusted and will to Trimble by paydown in higher As transition to adjusted revenues, year across Trimble margin to deal this announcement close. a portfolio. be of PTx with the PTx achieved the anticipate of September and new

of a which Slide our assumptions in XXXX. XX weaken includes to consolidated now markets At joint underlying continuing we XXXX see few PTx venture. highlights results this key outlook, Trimble the time,

increases plan back reverting gains, approximately includes sales price market share Our to with X%. along

cost pricing this will cost offset increases. and than of has pursue expect stabilized we As inflationary more raw cost savings material further level our actions, we

XXXX of Trimble. weakening previous is lower translation be XXXX, currency in our euro, expected the on than primarily have approximately modestly assumption. now are PTx including to up effect a to Engineering a to expenses due X% to year-over-year compared adverse expect X% We sales which

expenses around have engineering investment, Trimble, as PTx been look outlook. to we moderate softening the some would industry Excluding X% given down

the measures XX% mid-cycle approximately XX% to joint around cost to expect XX% XXX% operating in come of strong expectations XX.X% our industry With our XXXX in drivers, inclusion the above from of down margins to XX% around PTx in XXXX value due X of slightly declining high-margin our the in to around Trimble the performance control our XXXX, record we of XX% increased the adjusted growth to XXXX, from to would venture. line the creation and

margin targets Meeting We long-term XXXX performance will updated our the PTx Trimble. of account provide for at to Analyst December

tax now between percentage points the which to the is calculation XXXX, for The in rate than XX% due effective is be Our previous rates and is Argentina. and inflation in anticipated income exchange of impact the X.X guidance. of XX% our for reason higher foreign increase to tax

Turning outlook. XXXX to for our XX Slide

Our full for from $XX.X year down billion, record seen the in net XXXX is XXXX. sales levels outlook

million, Our adjusted a share what earnings also CapEx spent lower slightly approximately per $XX. forecast is of than target $XXX set we around in XXXX. We've

XX% consistent target. at should upper our of flow Our long-term with free cash adjusted XXX% conversion our of net the end be to income, range of

continued billion in around second demand we the quarter adjusted range, of underproduction project and XX% adjusted $X. sales relative $X.X With of in XXXX, earnings the per of to share the about retail operating margins

the With Q&A. it over back I'll turn operator that, for to

from from Jamie Truist. the [Operator The line question first Cook Instructions] is of

sort us opportunity? bit cuts the on and production maybe still how think America, in I half about Two before, a said South to just range. the you like you're you of that's if level the thinking be questions. South wondering in cuts One, of of in pricing production you in double-digit I'm an South the back America year? expected America could low in you're of margins terms margins how little expecting help

want accretive Trimble, quarter first clear going second to year you then you're sure XXXX? Do just it's by be the Damon, the make saying And post question, understand understanding be for close. I full to just first I mean my I of want to there. the

by pay mean, to now. given then, there, aren't accretive how be it's help to me the the I'm the by you debt then $X.XX just year. -- first right favorable color guess, down. wondering dilutive, could for full the And year, it's I I the just path there? get And I trends going just guess farming really Any given

Yes.

So American Jamie, back I'll start with the and South the question. revert to Trimble I'll question,

accretive XXXX. in So all fully of

planning all given being X it's the we the took we debt a quarters. repay not we're cash to our flow So able And really being But that look is XXXX if here, accretive. on generation. of on us of some strong at combination it free what of

up some here as precision the Precision channel importantly, complementary products Planting we synergies channel from we moving Precision Vantage have, in of leveraging and more ramp Planting also But channels. ag really the that start Trimble, the our into to

and those some So see then drive next growth we helping down some debt. paying year X really things

for the X quarters. XXXX So again, the accretive full versus of year first

Eric's we opening reduction On the comments, South expect in you quarter. over cuts in more America, again in second after to continued as reduce did here production the fourth XX% -- XX% heard our fourth heavily in That's would quarter. the the production first see I weighted here in a quarter.

the dealer some not still we be. where but did in need improvement We marginal inventory down to make there,

I see to production cuts get back here half hopefully, lapping. move fourth in And to the second the expect the So would less we hopefully, quarter as as quarter. become cuts production of year, the and starting then to those into again we further

the some FINAME we again, the into really mid-teens. year But markets new are the those these spurs comes to margins of presumption activity. back just the inclusive here in of the of the rolled the in give margins that out America, half going continue growth back numbers the half and being As get the financing I'm of year, in farmer the to start to into think we under up which improve, Again, margins about South do Trimble you to stay expect the back that PTx consistent. in to

hopefully we improving the for half. our demand right both as to half as but then be the see well continue challenged, now, in So first production back and farmer absorption the

line the Oppenheimer. Our of Owen Kristen from question is next from

out regions. of here, that but the other Jamie's maybe extension an broadening to of Sort

cuts regions were updated and just that growth for us than Just both hoping the for production I'm the year. the your higher assumptions expected remainder broad-based across and through outlook, the now you can given walk updated the of volume organic

So we the what out organic expectations strip maybe those if are. results, Trimble

Yes.

excluding North probably think, if at the right the organic So XX% market look bit see the quarter. Trimble, little would American XX% expect full we the say, better. year, a we in down Kristen, to I around were I the, for They down first again, so

balance single So call mid-single, that of year. sort digits of the for upper the

strong the year-over-year quarter We that tell state the you, market. we given quarter. after stable first Europe, we quarter saw repeating, with Remember, here, I that a relatively that fourth don't than had fourth record the would of Europe. other see

that Europe say of will that would the though mid-single year-over-year for sort be comp. full fourth the year, lot quarter I of likely in digit a concentrated So down

year relatively through the here the Pacific, We through year. in of as flat the stabilizing see Asia big here off the the we decline move balance quarter. that first

decline here first big the quarter. America, again, South in then And

returning the I the here year, South XX% and decline the year-over-year quarter. quarter quarter X% the hopefully, negative large then gets an second what at our a in sales for is comp full a again another we're sort to in of company. what, the the you around growth that organically expect seeing America and then We third decline at so fourth in But looking or back and easier would put in for down lapping

remarks, relationship the the to you regarding X-K the Can wondering the related terms commercial address in if prepared you strategic termination just I any background, Okay. TAFE. with rationale was us your didn't yesterday mention provide you some but there. this and could of And the then

Yes.

I last year. critical is you than as the us other horsepower So purchased of TAFE, million parts we We other of that nothing thanks one Kristen. for the low of to our a significant in -- question, world. know, guess $XXX again, sold suppliers about tractors Nothing

point with through relationship, to basically got our how expectations had we the communications we've on over of And we supplier on a years they're And performing. from any future. we TAFE supplier to that different and we going like with point them, worked And give work them. in where to horsepower at multiple them low were source a supplier the take notice needed path we time some different tractor these in to a them

So we last important would with we as did at follow the outlining any strategic communications treat supplier Kristen, several tell expectations. relationship would years, some ordinary we our this significant the best think demand over point, course. around you, as and I But was certain the dealers the make AGCO we felt world, products our products, needs interest for we about change. to for dealers' in and of farmers' this this the the farmers our

have from Elliott the of Stifel. from Stanley We question next our line

seeing on more little improvements Can some how bit versus a Curious, all going about mix kind is Europe? talk guess, you you're have margin of manufacturing had what in maybe over is there? I you of much the

Yes.

X I a cities -- think, Stanley, tale of it's sort of Europe is maybe little bit a of there.

pricing, would Europe. Again, done strong and next say out very has have line we product well. exceptionally the new got XXX, good some we the seen I mix We've Fendt coming of generation XXX. Our and

share the very capture by team. some performance, seeing good good So

gaining in Our well. as Fendt team region the has done share phenomenally European well in

well. that would quite done business I say the So has of part

weakened has brands more seeing industry say there, pressure on the Europe. the in would more volume-orientated we're As I

So Massey were a market the Ferguson they little and subject I think bit doing Valtra, to okay, weakness. although more

And to proposition right that rewarded so that again, now. overall, the continues are weakening, as being well perform markets is exceptionally farmers see Fendt those but value

guess, And just, a I point clarification. of

to? other that strips Trimble $XXX from used to of to sales? of kind come when frame sales million your the only think or parties And those case, a the if to at sell you you time point can recoup then what what some kind that's you and that's are to the sales Trimble AGCO, us that this tell going those of out year, So

Yes.

-- the Stanley, just a inverse. be more little So it's bit I the think of

that We now consolidate as So showed And there we Trimble saw of you sales. eliminations. AGCO. would the million I that numbers slide is month would X-K that the out have to we to of ago, do excluding the $XXX-plus business, sales -- $XX JV to at sales that looked you some corporate are if was million about on everyone a of the sales there stripped are about that those sold last part Because have the filed year, AGCO.

the And third-party sales. all are XXX-plus so

we to of the to X Wall well, about as Street we've we precision as again, similar So know talked you Precision Planting, the that We retrofit talked about this ag about pieces our talk business. Valtra. that's sales, business, high OE half selling been Fendt, number. about into fuse of Massey, the that usually then we're our And into the business, to which into about third-party is technology sales talked

you have now continue to in to growth won't number. $XXX AGCO thing because again, we'll the party. the going PTx communicate plus. that Same sales to that we're about a see But sales will there you Trimble guys that's And in necessarily to be that million third make

we'll to of number. overview I you sort combined versus the in makes similar hope have number the of what's give what's So that reported that sense.

the next of from Zakaria from JPMorgan. our have question Tami line We

wanted just understand a So to little better. guide the

Trimble it's $XXX guide. excluding million core almost the million you you're the I previous by guide versus think that suggests new $XXX PTx like business, expect about plus. down The

you of can just down? guide this help So buckets the me understand

America any How much there's is FX if in North versus South America there. versus

the what's the understand core Trimble. outlook trying delta business current previous and really for to ex between So the

Tami. problem, Sure. No

tell weakness, or So X about is would $XXX you, X on give to that to I core business. went from it related call around take. the we of XX the just XX million currency was

X to market. American change down down related delta X.X% the $XXX about be You coming the buckets. South are X%. And million the from Those then got the about around big would pricing the in to

it. Got

EBIT would Okay. Trimble than And margin expecting PTx what think lighter to as a is company Trimble, saw little presentation, you're then Trimble, a I standalone a high do. the I in the used XX% which think I from

down I understand sales drives as, eventually XX% that can just are that So high help market you at going margin? some know you recovers again, year, this hopefully, but EBIT point? it where me probably what do see And

Yes.

we're showing excluding So again, you the Tami, AGCO is what sales. revenues

year, Again, in that last $XX that keep So was mind. million.

XXs. what I Trimble said think or So Trimble -- if but high in margins PTx the we about is

margin If we we in what you in an XXs. the low look at have shown showed EBITDA would September,

add doing these with about TSA do in agreement and a transitional of Trimble. $X you if So again, think numbers million reflect I some services we're costs, depreciation,

couple dollars a them out over work to as into years its the we of our there's embedded more will system. So in numbers. these integrate next That million system few the of start way

up that the there. will help pick So margins

little leverage, then good as what's would coming depressing in, with down again, losing real change of layer with some million is again, margins well. of bit in revenues And margins then down, SG&A no that again, margin $XX I business, a the the the cost you're again, a little And the which bit. bringing if, is

we we overall, of in it. as growth the to So And we going margin at AGCO revenue then really what the we here marketplace, when and at talk look synergies we're feel the products about about start into good portfolio more integrate look gross we that forward. the selling and them the the

The next Dobre of RW question the Mig is Baird. line from from

the bit information here. want confused I ago, than also that here. to lower about the little But JV. there, JV a put for the Look, talking that a a you're in using high little we it the were the out operating I'm strikes bit the margins Trimble the that X-K about XXs you maybe Yes. saw on month margins follow me up Trimble that

So compression curious obviously, that fact Trimble, high is that margin when on I'm business terms from CNH away square of going million XXs revenue looking what's here. the in at going of provided kind of to guide $XXX I'm but to you the to the and kind how volume also that

what CNH-related the and Trimble assumptions business? making the So are revenue core on you on

Yes.

they guess a Trimble financial within we a segment remember published statements, portion business I again, that when to were the it's important this or that X-K think where standalone was I about they Mig, the as think I the that that So were created reporting. that theory, or And the pro standalone through with applied cost, filed went create, to as we business that there forma in in we of costs X-K. allocated were certain the Trimble,

many over taken necessarily the incur the all of to operating have or cost that would we part because as resources. we business of we'd that doesn't able be reflect That our leverage of cost

reflective it that And of allocated a create some we the that or cost we shown that did was which -- is in X-K costs the the for have goal the what that when not would actually ongoing has to September announcement would statement again, standalone business, structure. not financial -- in of have included to so Trimble shown the not are create back but trying of

of the give see numbers the X -- that the again, when now, about we quarters, structure the right explains about being hopefully, you the it's the that we So cost $XXX that's year. for now business. the in that And balance we're see million. talking the remaining revenues for We we're business that see controlling, we that

business not down X-K, this when announcement have business, layer million. about were right the quarter million $XXX down $XXX ultimately said the around going you around look if have first what since Trimble to do which in say, coming that you're to We CNH down. our numbers revenue surprising announce at related just let's million markets you come about think over in will XX%. When see directionally, Again, the of year-over-year, or because we $XXX see is the initial coming we come around that, down revenues our

So of you related market. $XX around million have to revenue lower

do to that come in business expect down. about OE the talked CNH September. We We

probably I the going $XX the number say Trimble be to or with to We as little churn to they million channel were beginning directionally sign to rest of a as Vantage then come going And that. expect of is the would a bit so that's the up CNH continue year-over-year. with or elsewhere. we going they dealer dealer if that knew either down were

feel to year-over-year, these years. see margin that at margins, we again, come the of we a so And volume And still again, be business. as the numbers, look decline continues again, next this we here and with the operating XXs comfortable high the growing look at you great over to when back couple

is next Jerry from of Revich the Goldman line Sachs. question from The

for is on This Clay Jerry.

-- for as CNH on destocking dealers, just a some progress the for update are follow-up look us there for Or we sign-ups Vantage sign-ups you dealers? -- seeing can you those how the As is on those forward? to still the become

Clay. Yes,

I again, sell good again, directly. between success had And made the us them. of relationship very signing these Trimble, venture Trimble up before CNH they dealers that some in long So and the announced they and with joint had, the think, to to products change begin many

momentum these last good well PTx again, to over as work the the begun sales about the value as been as And in see with to the dealers, continued out approaching the the and team team connect month have products. no members X teams in We've some benefits really with we're now of our with of Trimble change update Trimble how and the to working dealers this. have

makes farmers on With much our servicing Precision models. and Planting business, all in the we're all very focused

been. for what product So the to to Planting much and that. be with or able Group had key a very with whether service And want Trimble again, way is our be And the that, dealers the agnostic to Precision to product, we're the to want AGCO similar is farmers Group them that's serviced. the an us the farmers we competitive

and reduce their productive and We're costs their more there to them drive make more yields, profitable. input service them, make them

seeing a momentum. market challenged. we're So little the bit more I'd good say is environment Obviously,

lower this in are than the incomes many were year. world they year Farmer last parts of

I the good momentum hesitation the with now team very dealers on been from as a seeing you that you're PTx farmer But good, has the we're the spending. with been team of little has engagement more So just engaging very tell our Trimble would well. bit seeing and

of continue of in half from the the first move we the some of year product little to the Trimble Again, have how hopefully directly these would into history the year. as that come we this receive many work of bit dealers and we still because JV, here expect transitions And the churn their through to as a OE. from then normalizing this would now of back have of half

have for And what XX last update timing and separately, an has portfolio us months been? GSI on EBITDA the just the you review

Yes.

the under So And as to of amount on protein the grain Significant we started to we be well and execute first continue business interest the quarter. also of exceptionally review external the continues this. strategic units. team

business well team. a done They've we've of sort the said What are to margins quarter the digits. exceptionally historically for Again, protein that and is and first grain had in this mid-single credit great EBIT here.

a to in position of think time this sort I summer midsummer of conclusion we'll a final that So on to here frame. the sort be of in come

next from question Chad line Bernstein. of is The Dillard the from

standpoint. the driven wanted seeing to [indiscernible] balance there the we for is all pricing cadence change question America, in just the the sense pull through the America? then I how Was South change So on of what get Or pricing a from South back? my 'XX. guidance And [indiscernible] for a about by a think for year? regions other of are specifically should you're from XQ

Yes.

pretty Massey to half a is and the the say, half. Chad, little the here Fendt Valtra. second brands here. heavily bit say would some it and to it's regions think, weighted volume-orientated across more America especially if lap bit the I pricing of to I across between in going But much a in the first all speaking, again, weight board. comps concentrated -- wouldn't start had South it's I generally in be little in the the as I we the of

Planting What question you. second your helpful. the year-on-year that That's Got was embedding first the business? in the revenues for legacy in And your AGCO then for And on in are you business. guidance what quarter? just full change Precision year

Yes.

ag if was I precision year-over-year. it look So flat at revenue,

strong If we still you quarter very remember challenges. coming supply the off year, last first were the momentum, chain

were So flat $XXX of the that's million. just year-over-year business. And around revenues the at inclusive Fuse

I business around expect And growth would through the internal So still of of $XXX we the that million. one both We about what as refit similar as well again, that think our dampen the in sales term again, I the questions, we've prior mid-single-digit sort earnings Fuse would sales, say, the of, helping at to cycles. business. was your talked

is despite the the doing to that grow ag The aftermarket see continuing business. that well. precision of really business part Precision -- OE or our retrofit, we

that mid-single great So particular continue say -- business, for that sort digits would for and good growth I momentum, business. here to margin XXXX expect mid-single-digit of

like any conference closing for remarks. This to concludes the our Hansotia over Eric question-and-answer would to session. back turn I

the be expanding world's been a the never and there's to potential resource is critical saying that Technology exciting population. business. by farmers close time ways, operate providing more food them agriculture today how more and a given I'll efficient Yes, more transforming produce the in need with to

farmer-first success to focus The sustainably. key them more profitably our centers on the execution realize enables continued to our strategy. helping them is AGCO's on farmer-first this and potential, operate

on is focus Our growing businesses our like Fendt. margin-rich

and that In America. brand to North the unbelievable by farmers And grow of the fact, just into future. and it brand launch at dealers in the we was Fendt about our -- how I grow home had continue up Lodge, can excitement

investing to our by in which we've few Parts reached precision an we our equipment a April, Secondly, industry-leading milestone In in creates better original farmers ag global company's manufacturers. the last business, Precision our Ag closing platform Services been PTx and which venture, the joint years. and heavily in mixed major third, business; and serve history fleet Trimble

relatively demand diets, on and For prices. commodity stocks our for levels, industry. of the trends confidence last our low to in few factors many we've changing long-term including supporting us quarters, increased touched All populations, health growing the markets, give healthy biofuels use these

I finish I'll started. where

industry the our execute Despite market weaker we in in future, investing and staying and continue to delivering strategy. team share on costs. nimble the conditions, our Our reflects outlook on gains financial my confidence

operating adjusted conditions All of year-over-year. great at upcoming you market Thank June. in meaningfully have our margin technology seeing forward the level to deliver company We these will highest help of position day. despite weaker look the and us history to the event in you, second a

Thank XXXX for Quarter joining concluded. the has you. nice a Thank day. This Have First Call. AGCO call you Earnings