AGCO - Earnings call transcript Q2 2019

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Operator

Good morning. My name is Natalia, and I will be your conference operator today. At this time, I would like to welcome everyone to the AGCO 2019 Second Quarter Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be question-and-answer session. you. Thank Instructions] [Operator

the Relations. to turn Head Greg of Investor call now Mr. over Peterson, I'll

begin conference. may You your

Greg Peterson

Thanks, Natalia, earnings and you joining good morning. Welcome for second to AGCO's quarter XXXX conference us call. those of

on the to the a appendix measures The this we at We will are our used reconciled slide site in refer Web measures in presentation. presentation morning of presentation that that posted slide non-GAAP GAAP www.agcocorp.com. to

plans some make plans, development forward-looking statements the including plans; morning, those product benefits. expenditure with and respect modernization also this and to and demand, acquisition, capital and plans the of will those the and expectations and those of timing costs We expansion of timing benefits our

future other levels, rates revenue flow, tax We metrics. financial cash price repurchases, also will production our levels, earnings, and discuss share and dividend rates

We reports that wish predictions to Commission, for ending Form XX-K actual events XXXX. statements refer December we the differ the year the and company's and that the with file, that are you to materially. time-to-time, Securities We XX, you may periodic including these caution Exchange from

factors forward-looking important required law. discusses We contained any actual statements. cause update our could materially as from document This those results to in to obligation disclaim statements, forward-looking the except any differ that by

this also of will We have Web a call site. our on replay

and Chief Officer; the call Financial Andy Officer; Executive Beck, and and Hansotia, Richenhagen, Martin and Chief our Vice President, Chief President on So, Vice Officer. Chairman, with me are our this our Operating Senior President Senior morning Eric

Martin, go ahead. that, with please And

Martin Richenhagen

so welcome COO, new to and Eric, you our not special Thank new morning, anymore. good almost

our quarter. and the of results. of grew adjusted there in operating by and in performance X, despite strong XXX We XX% and market we our you over margins posted on second begin share a remarks expanded nearly second points quarter America Our summary South earnings will North basis and adjusted consolidated headwinds margin per another Slide year-to-date quarter find

being in higher pricing and product control contributing well-received rich initiative the our cost With technology to are margins. market, operating

full of performance outlook earnings projections In addition, basis for the increased first our half for on year the we and our XXXX. margin our

remains performance long-term a focus. AGCO's key

We our our and will product that levels benefits strengthening efficiency improving offerings. are factories, projects drive from raising service of our our investing in long-term

half we to shareholders During the first continued repurchases. cash by to XXXX, of return in-stock completing

XXXX first industry detailed same XXXX. first X, Concerns sales period retail the Slide development retail the a in the industry American of in lower Difficulty] half impacted delayed of the to [Technical harvest forecast for sales regions compared unit XXXX. and negatively cost North months six of

industry of compared We row expected to retail tractors be crop relatively expect Modestly, North American offset flat sales sector small higher year. last in sales forage and equipment, XXXX hay segment. sales retail and to the are lower to in

of conditions Europe first of across sector. growing supportive dry tractor development Continued the the months has in Industry winter much the dairy wheat [stressed][ph] milk the sales crop, while Europe of XXXX. increased remain investment of six retail prices

to is industry flat. year, the For in full Europe expected demand Western be

of XXXX. and Brazil months benefits production were weak in Argentina Brazil finance decreased The in government conditions six interruptions the by and during in program macro sales offset the improved retail Industry of economic America in in first Argentina. subsidized South grain partially

of year full the flat. in to For is XXXX, be demand South America industry expected

in lower forecast the for the of in be for which production global farm short-term future. for income positive inventory prices higher, While grain have and demand, farm ending income will moved global and negative crop farm commodity lower equipment

production North in Production we of full a America lower year for on schedule Europe, are XXXX X. the company was XXXX, in of and X% production Total are factory quarter. was X%. approximately the hours for AGCO's Slide approximately and production up targeting South shown higher for second increase

is tractors for book Europe order while June and North up down our America, South in finally, in America. being And

our over results. turn you will CFO, who Beck, Andy about more information will provide I to the quarter second now call

Andy Beck

Thank you, morning. Martin, good and

quarter I results will half start second sales first XXXX. of on Slide X, which and AGCO's regional looks the at for net

were excluding translation by currency the XXXX, the AGCO's impact Scandinavia Sales to net flat growth X%. impact and lowered and flat of second the the also U.K. quarter by France declines Europe which to second of in compared Middle translation the XXXX. Germany in The sales were was offset of of sales East sales segment approximately quarter negative negative currency excluding compared

AGCO's in translation America of currency XXXX net Second government approximately quarter weaker to decline. Funding the to second loan sales as in well South XXXX contributed subsidized demand quarter as interruptions the impacts. the negative in excluding decreased XX% program compared Argentina

America currency approximately high to North of impact excluding of equipment. sales partially Sales second XXXX. in the of increased protein declines the the offset of experienced by levels unfavorable compared sales translation were horsepower production X% the quarter in in tractors Increased

Africa. XXXX, X% were the segment to Pacific, same offset XXXX compared $XXX X% in of the Lower up mostly Africa Asia the second million period to in excluding second quarter sales were currency XXXX currency. in approximately negative the impact compared higher of of in negative excluding our about by about were Net Australia decreased translation. in Part sales impact XXXX sales for sales quarter the of

basis engineering increased last margin XXXX and of pricing, AGCO's Slide timing quarter approximately expanded the adjusted from the our of year. the Margins to margins compared production, the year. to XXX compared cost management X second in benefited and same examines points expenses performance. AGCO's prior operating sales period

well XXXX North America basis points the second resulting of Europe, cost benefit XX the varying Middle timing XXX expenses second compared efforts. the second the compared of control pricing as over XXXX. margins operating quarter of quarter production, to as ongoing higher improved expanded East margins quarter in to from the basis of points

Increased pricing sales higher to sales, improved positive a net contributed the margin. mix and

mix. to lower reduced forecast margins America by product as the be our due as Third new market with costs production North in launching well quarter will impacted negatively a weaker associated products,

operating product X Tier in compared same progress South improved technology the period make in quarter to the that as to results transition In XXXX, continue market. offerings we second of to the in America, our

Our business be profitable of second XXXX. South half is to America in expected the

In over efforts. a our XXX Africa operating to control on due expanded basis primarily points expense flat relatively Pacific, Asia margins segment sales

grain X protein Slide and equipment AGCO's and the currency over and declines half compared sales Pacific, in negative group currency storage sales a constant production Globally, XXXX increased excluding Africa grew XXXX. North currency X% the in of America equipment in American details grain the product seed to XX% the regions. a Europe, Pacific, regions. East, achieved and Sales first with decreased basis, production this and basis by product. largest impacts in region on about Asia Asia growth X% on Africa constant South Protein the Middle approximately by

trends future for increased protein population years. global make AGCO toward source The consumption our profitable should growth an in growing GSI and business of attractive

in both looks X investments and AGCO's at research expenditures capital development. Slide and

our continue our and make productivity investments We factories. to refresh in lines, to system strategic product capabilities and our improve upgrade expand

to Brazil increase emissions basis XXXX to both a in the intend new plans expense in product requirements of engineering level execute and development Europe. We meet on our and constant currency

our and business. plan is the growth to support competitiveness our maintain to of spending Our long-term needed

be and XXXX is to expenditure plans to Our XXXX. capital and our reflects plan in product XXXX higher projected investments support

in AGCO's activities operating Slide XX addresses cash less cash capital represents free used flow, expenditures. which

and resulted both greater the negative flow cash first requirements in working half thereby first the capital XXXX for of are in seasonal half free and the Our of 'XX. year in

combines. tractors, $X.X America year Losses North flow. end receivables At million approximately months dealer compared full of our a and during XXXX. XX-month are equipment with the in of of associated on the sales For strong other of XXXX, which our second million June another quarter basis the trailing XXXX, in net the improved targeting year for we were same to were receivable financing on free facilities, was cash included XXXX expense period $XX supply

we we continue expect focus for shareholders, of our plan. distribution allocation on to As important component cash long-term an capital as return

repurchases Over share reducing the past XX%. had years, effect which approximately by we've Difficulty] billion nearly the $X.X share of of six our count [Technical

year. $XX share the and of million we of additional expect repurchases six the cash During share through months to generation of first completed fund balance repurchases the XXXX,

captured lower and America. are XXXX now reflects XXXX South for levels. Our expected markets sales updated tractor is compared to be XX, unit XXXX Slide outlook America industry three for North and both on North to In forecast regional major flat

in development of forecast crop calls trade are X%. to to Our North as well American slow equipment. the on be weighing X% prior ongoing sales up large planting and market concerns as Late

to across Europe year industry assumptions, to are which dairying yields to The sales continue demand be up XXXX. equipment and dry then XXXX. expected horsepower to tend supportive modestly on demand remain Warm, softer healthy. Western and of in these tied now pressure Based Western be resilient XXXX Western to much in the expected back in expected overall contribute full in and expect half general to fundamentals more of are to more to Europe flat XXXX. compared Low be Europe livestock be and to is sales conditions economics we

in Harvest Argentina both levels. from half first Brazil in and the of XXXX improved XXXX are

those in However, macro limited in in XXXX. economic markets sales program during first interruptions in ongoing issues the the government of Argentina half Brazil finance and supported

flat prior XXXX expect retail X% to be forecast South our industry versus American of now XXXX versus to We sales in X%.

in to be XXXX our and products costs managing the in our improvement XXXX Slide continuing outlook. XX our opportunities. for assumptions and underlying invest highlights priority continues business The

market assumes all Our relatively forecast demand across stable regions. industry

X.X% share plan of basis. price Our to market on increases with X% consolidated improvement includes a

currency be a up about to basis impact current expected expect is exchange rates, XXXX, compared In At by XXXX. million sales translation expense approximately engineering negatively to constant we currency $XX to X.X%. on

excluding purchasing Operating regions. benefit by and across debt pricing, of points the the targeting tax margins in to million XXX operating initiatives Below approximately about be income projected an to our other are $XX to XX% are of costs with improve in all line, incurred XXXX XXXX. due expense in after interest margin we effective productivity extinguishment the XX% to basis down rate and expected expansion

XXXX Slide view goals. financial of XX our lists selected

range. in We to projecting XXXX sales are be $X.X the billion

Based improved margins XXXX XXXX. We expect we're per earnings to growth from of operating assumptions share in targeting $X.XX. these on approximately be

be expect $XXX XXXX to cash flow $XXX range. to up $XX be to approximately capital million expenditures We in million and levels to the compared million free

for well both our margin America to forecast and For our results sales be an North expected South of the that rate as is third will lowering effective approximately as reflect quarter, tax and market the XX%. impacts

$X.XX earnings third to result, quarter per share be in the to a projected $X.XX range. As

That for ready concludes our Operator, prepared remarks. we're the questions.

Operator

And Revich Goldman our question Sachs. of with from is the first Instructions] Jerry line [Operator

Andy Beck

are Jerry, you there?

Operator

is Revich, Jerry open. your line

Jerry Revich

Yes. Can me? you hear

Andy Beck

We hear Jerry. you can Yes, now.

Jerry Revich

Okay.

about us talk wondering, this South complete in the you Sorry chain about if that. exiting product thinking quarter be transition. should Talk margin about I'm to folks the America we please? you could as that where the about exiting trajectory year supply stands ramp the

Andy Beck

Jerry. Sure,

In year. last South half terms we of fourth the can did you flat quarter, improve year. of third year margins to relatively experienced compared in in And projecting America, first to the we're margins that and over last be the in what we see

remarks, our changes you some made had As changes. elevated adjustments Difficulty] to the XXXX, our carry and we of through we said some to because we to and recall inventory levels of as we're build making [Technical in production us some production

margin. our So contributing to flatter and are levels that's production down the

online IDEAL of Going these challenging really the introductions pretty much with we for lot we our production. of combine, year be terms with and in end which the so -- forward, us. of that been portfolio stable have a And more will by exception comes our will year, the be product product the of next new done

And year-over-year. we'll seeing to our so improving some and in progress structure with continue show improvement think that in cost mind, in I South margin America steady

Jerry Revich

or And run you just point be achieved that. the a about that Andy have rate put are you as in talking X% to complete margins about folks range than better the transaction? historically, Should we margin we the on finer thinking that

Martin Richenhagen

a a better Hansotia talk margins. little basically bit want -- talk on Eric about We it. you works It's to about focus, do Eric

Eric Hansotia

still America of and machines standardization overall is to four in this those the overall is in big year down mean South opportunity part and It beyond. of focus process Brazil boils automization we of a area all is and process, Sure. product, I effort. globalization and smart digitization, and have included globally really

of our over is rapid reduction changes development planting up. and in The Fuse we we few the whole so and why precision we cost the down. invest our went an so Smart what of take all IDEAL customers great solutions that Fendt some in through that continue investment product as last combine, still much Momentum about. have that's new areas those are R&D machines the in the we our is with on, change to planter examples we smart is Product emission cost where the portfolio can South excited most America, are launched years area machine of

as Fendt new Fendt hit new America show and planter tractor, at globalization, in new was combine And at lastly, show. the South Agri it the launched with we big a the and the

So, global those South but representation, it's it's areas. -- a America's effort all in really

Martin Richenhagen

Eric project Project XX. The And is basically because works internal is is this on target called strategic XX%. our

Jerry Revich

And Martin of other based an even can get on on you the where have get you comment, regions, can South America, you your in more than XX% assembly framework? that business XX%,

Martin Richenhagen

AGCO Alex, about everything South and America [indiscernible]. for XX% Andy You have the the from so consolidated is

by way that why no there's shouldn't America reason third And but be So, sooner later. your was question. there South the or

Jerry Revich

Thank discussion. the appreciate you. I

Andy Beck

Thanks Jerry.

Operator

is Seth Capital with question from of Weber Markets. line RBC next Your the

Seth Weber

to with you you America returning Do the I program take back Brazil, Hey, guess Thanks. have share morning. like noticed in the of I than performance I good your little a now the guess then, market. recapturing And wanted some revenue actually line, trends just in again, kind July. region? ask better in was South on FINAME your in feel in

Martin Richenhagen

and yes The is yes Andy. answer from details the come

Andy Beck

Yes. the so mid-July, in their back as flow, questions, normal a now activity that would the FINAME are starting kicked to say the funds activity level. to program probably funding two again, we're returning see started to markets starting and I on

things beginning July, start the have but the month. slow up ramped in here now in of little backend a So

full see how for the we'll goes So, market quarter. the

we're substantial America growth our In sales North Martin about second We -- non-tractor the point market what the we really is I would because that planters terms of the sales for the lot talk products. expect was, some balance where in and quarter of growth, continue But year. we in and in South Eric sprayers are a and our America shares growing thing focus seeing one tractor sales our that out beyond so strong. about products said of improvement we're we saw about mentioned, to that during the and

Seth Weber

give third my margin, that up on here the guess precision on would helpful. in then, -- America, That's Thanks. of follow And how Okay. attribute mean just planting to you that is North I the much is drop color with Could going strength I what's North business quarter. back going kind noted of mix you that precision to planting on off in in the just you any America? and

Eric Hansotia

Sure.

first the You're seasonal, Precision the right. to tends absolutely Planting very be heaviest. although is quarter

from we So, quarter. first bigger a the had much in contribution Precision Planting

quarter for about talked very America. in second we market good sprayers. was That's North -- us So, a

horsepower was contributor. higher that a the are year-over-year, bigger a big tractors was So also Those contributors. was then, two contributor. And also so biggest that up

go So, next on thanks questions for your operator and to question. the

Operator

of line is next Stephen Jefferies. the Volkmann from question Your with

Stephen Volkmann

on here, guess that little what that a just your in and the you cost progresses mean is cost mentioned the impact positive positive price morning. rest of good but Martin year? and a seeing Andy talk can as about must margins -- Hi, bit both more you Both and for price you're pricing how I

Andy Beck

Steve. Sure,

the back pricing that a that From of the half. we're continue first markets. in XXX kind South little at In position noted, year in of Europe seeing improvement in what's our target point and and pricing a happening with we've net a inflationary the lower X% expect X.X%. terms been those strong and the North up of That's with basis to we the on in and to pricing half for year pricing about as conditions offset cost, America looking material price where to is reflects you in

Stephen Volkmann

then, helpful. refresh one? for authorization on Thanks. another That's follow what's expect memory Great. just you that to would you And left my can with repurchase and up

Andy Beck

Yes.

We in any we'll of and Board authorization. have the here with $XX about second be our left get million the working to year half

Martin Richenhagen

at another around have to million. plan -- We Yes. one XXX

Stephen Volkmann

Bye-bye. Great. you, Martin. Thank

Operator

Your the with of JPMorgan. Duignan next question Ann from is line

Martin Richenhagen

Duignan. Ann

Tom Simonitsch

just the the North with factored equipment Simonitsch translate guys. USDA expect [We’ve new Ann. curious outlook morning, program production your learned the last to for of actually It's week into details you do are for Tom America announced hours your] And XXXX, Good if direct into by and facilitation on orders, those so market payments market outlook? [ph] when?

Andy Beck

Yes.

into factored we're forecast. is is the bit seeing our What of it our for in So, America uncertainty North a in fair base. market still customer

causing know as last summer and lots summer of planting, catch this all we As been did. spring up hasn't season very had a do challenging was as productive last warm like they to summer some late

higher expecting yields. acres. lot And a also of are There's so lower a farmers unplanted degree of

is uncertainty to year have decision in seeing talked going know we of farmer than So they're customer year right typical. this to is the they base And will the that wait as our be kind off expect. put in now. can till pricing high harvest they and fairly bin They're what buying later they're they until their

Tom Simonitsch

question I trying Okay. ask GSI the opportunities the you on new as deficit? That's any I'm whole fill protein given seeing GSI, If of are Thank helpful. a that ASF, you. attempts for word could impact cut, to this

Andy Beck

one. take I can that

with actually our In orders I short-term think with a down. production negative customers planned areas. pipeline is to results our there much in of We producers ASF orders are had it's expansion to many put few poultry those of needing the our hold business, the normal hold. that cull but in of of came and to regions many been their a for those then on those had plans of because when herds on relationships

protein broiler production So will in. a see we also and leaders and providers short-term where In mid-term, other protein in we are to pullback. replacement protein it's of forms the which of been shift the opportunity

In will it the and and production production protein more the our those better will swine of back bio-controls And things. toward so come be that professional where focus is mid-term, that's biased more short-term. have facilities in types

So, mid-term -- opportunities harvesting with a moisture this mid there. will be where facilities And swine means in levels. we think also production risk we let's call North for grain higher crops positive late to see America, storage, in in a and of the the net growth planting

precision And how we're planting business have the where up intelligence those the that at so, with and damaged high dryer grain do our having joining where some replacement we the moisture go And to be say with most of that we have are them we flooding can in help with facilities. then, would market, we bins were help storage conditions now planting, risk for that farmers best finally, farmers' solutions.

Martin Richenhagen

What I a the as in up. western is add and that would like requirement welfare countries society to for animal is western -- going

already area future. animal have solutions the in more state-of-the-art out that in We invest very we and friendly interesting solutions into developing

I trend. think a it's

Tom Simonitsch

Thank very great. That's much. you

Operator

line Your is next question Cook, Jamie with Jamie the is Credit open. line your from of Cook Suisse.

Jamie Cook

Can hear Hi. me? you

Martin Richenhagen

now. Yes,

You are late.

Jamie Cook

I I'm managing know I'm two sorry, between calls.

call. you into any inventory little XXXX? too are war. be heading about we're could stand on on more you a to I China six still how to I XXXX, to just bit, is, I cut you. shaping views hear XXXX but Martin, of so are but Thank then, a think on then, prices early thoughts understand of wanted I just could lot about understanding months Martin you So my to you more want up sort ago? and question to other it's but didn't where trade there's And different just guess But probably channel relative perhaps thinking miss production commodity your how now, with But, guess give waiting I where initial

Martin Richenhagen

very much. you Thank

to don't chance it we that ask. never about you So but miss a talk

XXXX year some view so, of on that be show you believe give for margins. we also improvement I XXXX. a another AGCO will certainly kind good and the more to And in personally half want I area of

year. So, expect doing this us job you good a we should as do

comes -- talk on I not our having being a impact really it When big other see factor to to do about, the business. them

So I'm positive.

Andy Beck

And Jamie the channel on question…

Martin Richenhagen

channel We manage well. very the

Andy Beck

channel up did than we out, work with to America reduce production sure pointed a that all some year you on and inventories ago. that North our higher we and end was make dealer don't region in As

the adjustments made so for where And the us keep we've these be on end at will target want we year. of to

Martin Richenhagen

COO, the have now. with horsepower more And we

So, you should improvement. expect a major

Jamie Cook

get Okay. back Thank you. queue. in I'll

Martin Richenhagen

Back Thank the Have wonderful call. to you, day. Jamie. other a

Operator

of [Operator the Gilardi Instructions] from of question is Merrill America Your line Lynch. next Bank Ross with

Ross Gilardi

morning Good Thanks. guys.

Martin Richenhagen

Good morning, Ross.

Ross Gilardi

could just particular the your that SIMA the for you comment its market I has index wondered if on healthy characterize see been as business it. and call you lower. relevance as trending mean you index I you -- European

is to your on it good following think So business? your how -- for take I'm want just get you

Martin Richenhagen

basically this it's way for very a It's right. always I index in more than years follow made and XX that it's now. complicated

also trend way around. It's it's So, the positive. showing and some negative other

fine see and So I overall, Europe in I comeback next think opportunity the markets important is of doing year. a

Ross Gilardi

Based market? on particular

Martin Richenhagen

Based index. people which to farmers, dealers, my on is much just better my talking and than

Ross Gilardi

Okay. I your data. then, produce German just countries, a there also of of between disconnect you enough. is important. very, different the registration that Germany just and your relevance And to but the tractor take Fair lot very be in Obviously, real on a I data. seems top-line wanted to get mean

It quarter, given is it year, too, would flattish quarters be if which disconnect. overall So, what that this the in helpful. that'd the I comment your what could for expected environment, overall many market. I mean been on were organic like have is that you guys recently seems you is that caused outgrowing more most very

Martin Richenhagen

because of quality some problems basically some extraordinary problems [indiscernible] performance Yes. get suppliers. all issues and We of to had important

normal numbers you could So more see next quarter.

Ross Gilardi

Thank fill. you. That's my it. Got Okay.

Operator

question next Fargo line Casey of from Wells Your Securities. with is Andy the

Andy Casey

were those you. to due Good if Could year-over-year? help expense all and thank engineering that items with and SG&A was in currency. you line clarification wondering down I'm first a morning QX on

Andy Beck

flat. Andy. expenses relatively currency the Yes. That's right Without been have

Andy Casey

organic. assumptions is main on seems the expectation half second X.X% revenue math the within outlook, reaccelerate it's implied It you Could X.X half meaning the more second or to the from revenue assumption as me understand I'm as like looks you. the that growth set Okay. Thank price? like to QX's right. help doing less then, growth oil the embedded And in

Andy Beck

most Yes. year-over-year is will said growth growth with our I for in financing we the is going of would of pretty coming of X.X% price as that in say talked about up then, in the two to we year. back Andy, the be the Brazil to the The balance that be And Brazil in significant year. as online. pricing half

pent there's Brazil. demand So up in

So of that's also to part going good drive a it.

Andy Casey

Thank And fourth going QX comments are drive earnings you fourth second for I is be growth the expecting quarter. the to you. that quarter suggest, half what Okay. then, understand the about pretty the QX, concentrated in comments to in the reacceleration?

Martin Richenhagen

one. little the quarter, bit more the any cycle do have it we fourth A already usual But, details, is for the Andy? strongest

Andy Beck

No.

I saw third we North in better quarter and so better quarter weak than quarter then, America mix what of about with and relatively other of kind and fourth we we improvement well. the how fourth be And America, trend fourth see the a weak that particularly will margin see North is we as the regions higher talked mix the expenses. is we'll in think margins in what XXXX. The see high across reverses quarter

mainly fourth quarter. it's margin in the driven by improvement So,

Andy Casey

very you Thank much. Okay.

Operator

the of Chad Deutsche Your Dillard line final question with Bank. is from

Chad Dillard

Hi. Good morning everyone.

Andy Beck

Chad. Good morning,

Martin Richenhagen

still existence? Is in Deutsche Bank

Chad Dillard

are standing. We we still are

Martin Richenhagen

Yes.

Chad Dillard

this Europe. for versus year about increased gain plan the Can on wanted the year? Just share in you your like is Valtra update last an how talk to progressing penetration brand just potential get of

Andy Beck

filled market actually green well Lely that's the our line. a line We the ago We brands to in story our couple had in both few Yes. and of well and bought the in business. -- in non-tractor harvesting now product our the business. market, gaps all have that's are years doing well that perform continues as largest Valtra a the in a we as but tractor product

Martin Richenhagen

and loadout very wagons, Europe. important for Including are which round things balers

Andy Beck

the crops Western combine very, Exactly. in -- to conditions and the in of nicely wide itself establishing well finally, have Precision very Europe. ideal Planting continues we And that perform variety throughout Europe. is And then, we're

with a creating partnership is AGCO's customers combination brands whole in position. all that our strengthening So, and

Chad Dillard

the Great. America. actually guess particularly update And North and year going on to rollout since an you two combine. the are I by over it's I just want that's the expecting just how about for next years to here? Europe switching how in thinking filed you region the this ideal are what get to one first

Andy Beck

Our all very, the continues to the in in really and results from projections Volume crops comments. unchanged with each machine previous We the from seeing very very perform and it well the they're our region. competition conditions. happy against machine all is often customers experiences very, run unchanged are that and and

Martin Richenhagen

substantially. year be And talk don't about yet, for next but volumes will we they up

Chad Dillard

Great. Thank you.

Operator

We do have Maria question with William of an additional from line the Larry Blair. De

Larry De Maria

things, Also, in been America in you've markets in like Good and about growing been if Apologize I asked, with been looks North discussed, brand guys Ziegler, jumped guys. you well. that Sara on you've morning. Thanks. late. two you've But, it as Hi, apologize. first, if have and really different vocal the Fendt

you year, Fendt maybe impact side. on the longer So this talk financial term and for the then, about maybe

in is those discuss you margins that. the secondly, the guidance on that public guidance? Martin, And Thank this given considerably Can in rectify -- X% you've 'XX, versus talked XXXX, you. still comments below about XX%

Martin Richenhagen

as are And my and you are for going imagine, stretched a to team margin it's My to targets. make numbers of myself. internal little course, life difficult

understand. know numbers -- first the have to the and be official hear always I did question therefore, XXXX you And not the yet been Andy you for not So communicated. XXXX honest, and from numbers numbers Greg

Larry De Maria

distribution plans, obviously, going done big with is a way for think a you've just some your you gotten Fendt you've America, Brazil. discussed North in distribution about I'm you're to in you brand Fendt more markets, curious I deals Ziegler outgrow the

could with of couple the impact around you sales years. if next more could gets financial et terms as So, margins talk over out world the rolled the strategy brand be Fendt and the meaningfully cetera about in broader this of what

Andy Beck

I'll that Larry. Sure. take one

because So, a now the new as Europe applicable application. as series got now it tractor the our of fit past series other XXXX are into actually. that and for fitting brand in roll the globally as didn't those real has North a so and perfectly design to conditions, its Fendt great American crop brand With regions American in brand for not well. we the a of out directly move now, but versatile be still tractor is But years great really Europe globally strongly South strong reputation XXX and a to conditions designed a enough

change the experience in South portfolio, brought the addition ideal In the our and in combine out the dealers planter to Fendt their helping tractor overall. America we've and match game momentum to

it's the the strategy Fendt just filling experience So, around and the really world. that's out

standpoint, From make very to as very, gates. the early get we out sure relatively this do we the want a we in as financial that it's modest well, still of years

Larry De Maria

Thanks.

does things that flawed close guys farmers? having to or provide solution to competitors you ideal tractor a the a segment there done the gap for in and farmers combine, more professional largest planters is to Fendt [Farm work [ph] you is a and versus be really the A] So, that mentioned, solution the

Martin Richenhagen

offer We the in now years plan and to as better for in Europe we do position also leapfrog. a the it Americas. Well, already technologies basically many does. are for is We this

Larry De Maria

Okay. Thank you.

Operator

remarks. call the turn any for will I questions. further over to closing no are Peterson Mr. There

Greg Peterson

to the to you, And get all later have encourage Thank us day. touch thank great And participants today. would if a and questions Natalia. in follow-up you you have we'd Thanks. back like with

Martin Richenhagen

wonderful a The AGCO team summer. wishes you

Operator

release your today's for you conference concludes call. Thank This participation.

disconnect. now may You

AGCO (AGCO) 30 Jul 192019 Q2 Earnings call transcript