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Page 6 of 9
Large ag inventory, we won’t see much of any build this year.
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2022 Q3
20 Aug 22
for the machines that needed more significant rework, those were some of the machines that we worked our way through in the third quarter
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2022 Q3
20 Aug 22
reflected in market share and retail statistics.
So, we feel like we’re broadly outperforming the industry.
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2022 Q3
20 Aug 22
That’s the primary driver more so than just carrying more inventory because of supply constraints.
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2022 Q3
20 Aug 22
the primary driver of our inventory levels coming out of the fourth quarter and going into next year, it’s really about the enthusiasm for the demand that we’re seeing and our ability to carry these higher production rates into next year is going to require higher inventory levels for us.
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2022 Q3
20 Aug 22
In the past, you have said the cycle peak is typically at 120% to 140% of mid-cycle.
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2022 Q3
20 Aug 22
continuing to build share.
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2022 Q3
20 Aug 22
margins other than we would target incrementals pretty consistent
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2022 Q3
20 Aug 22
Ag & Turf products typically in the 30% to 35% range, and Construction & Forestry products historically have been in the 20% to 25% range, and that would be our targeting goal as we think about 2023.
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2022 Q3
20 Aug 22
Some of the cost increases that we’ve experienced are going to be a little more structural and higher for longer. Things like labor and energy are parts of the supply base where they’re truly capacity constrained
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2022 Q3
20 Aug 22
we’re not going to really build any inventory even through ‘23.
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2022 Q3
20 Aug 22
some of the more consumer-driven products, turf and compact utility drivers, may see demand moderate a little bit as we go through the year.
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2022 Q3
20 Aug 22
demand still running a little bit ahead of supply. In that scenario, we wouldn’t expect to build a lot of inventory, if any, next year.
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2022 Q3
20 Aug 22
If you took two of our largest units, Harvester Works and Waterloo, and you looked at the average over three years from ‘18 to ‘20 of what they spent in premium freight alone, so this is expedited freight and air freight, they’d spend combined about $25 million.
We’re probably going to spend almost $200 million this year.
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2022 Q3
20 Aug 22
what we saw in terms of the lowered guidance primarily related to increased material cost, freight and then excess overhead, which is coming from those supply disruptions that Josh noted about earlier.
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2022 Q3
20 Aug 22
We are doing more rework on partially completed machines, and that creates a lot of increased overhead.
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2022 Q3
20 Aug 22
again, the flat outlook for the year is really a reflection of production capabilities more so than any demand concerns that we have at this point.
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2022 Q3
20 Aug 22
Regarding Europe, some of the flat retail data that you’re seeing year-to-date is really a reflection of inability for the industry to get supply out there.
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2022 Q3
20 Aug 22
just one part that’s waiting or just one set of tires that’s waiting.
So, significant progress, both in the number but also the amount of rework remaining on machines to ship.
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2022 Q3
20 Aug 22
Importantly, the number of machines that we still have held as partially completed inventory, for the most part, we’re looking at machines that only need one or two parts before they’re ready to ship and retail to customers.
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2022 Q3
20 Aug 22