The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jamie Cook - Truist Securities - Analyst
: I guess two questions. First on the guide for 2024. You're maintaining your margin guide. Pricing is an incremental headwind. Relative to the
previous guide, your sales forecast is lower and so it sort of implies margins in the fourth quarter have to reach 10% versus 5.5% in the third quarter.
So just trying to understand the margin ramp there and what would be driving that. And then my second question just on AGCO dealer inventories.
I mean it sounds like you're saying the market is getting weaker, your dealer inventories are still bloated yet, but you haven't changed your retail
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NOVEMBER 05, 2024 / 3:00PM, AGCO.N - Q3 2024 AGCO Corp Earnings Call
sales forecast. So I'm just trying to understand what's AGCO specific versus the industry and like to what degree is there any way you could frame
the production cuts in South America and North America in the first half of 2025.
Question: Kristen Owen - Oppenheimer & Co., Inc. - Analyst
: A little bit of a follow up on that. Just help us understand I mean you talked about some of the moving pieces in Europe around the production,
around some dealer things, can you help us understand what pricing looks like in Europe and how to square that circle with some of the market
share gains that you've seen and then I'll have a follow up.
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NOVEMBER 05, 2024 / 3:00PM, AGCO.N - Q3 2024 AGCO Corp Earnings Call
Question: Kristen Owen - Oppenheimer & Co., Inc. - Analyst
: And then just generally speaking, on the lowered outlook for the full year, if I back out grain and protein fourth quarter of last year, that represents,
let's call it the half of the $500 million delta in the top line. Can you help us understand what that does for the bottom line? How much of a benefit
is that to your year over year margin in the fourth quarter? Just a little bit more on the moving pieces of grain and protein in the revised guidance.
Question: Stephen Volkmann - Jefferies Group LLC - Analyst
: So can we just start off with Trimble, Eric? And you mentioned that things were sort of weaker, I guess as the channels sort of change there? It was
a little weaker than I expected. What's your outlook there? I mean could Trimble be up next year, sort of irrespective of end markets as that channel
shift sort of changes.
Question: Stephen Volkmann - Jefferies Group LLC - Analyst
: And then as a follow up, you've been having sort of a semi-public debate with your largest shareholder and some changes in that relationship, I
think, relative to production and so forth. Is that taking significant amount of your time and any sort of update you can give from your perspective?
Question: Joel Jackson - BMO Capital Markets - Analyst
: I wanted to follow up on Europe a bit more. You did address some of this already a few minutes ago on a prior question but like I'm trying to look
through into early '25 which you've given just a little bit of outlook on that. Trying to figure out how transient that step down in margins are in
Europe in Q3. Again, you gave some color, but should we expect kind of a ramp back over a couple quarters on margin in Europe or should we
expect first half margins in Europe '25 to be a lot less than we saw first half of '24 because it does mean a lot for you guys?
Question: Joel Jackson - BMO Capital Markets - Analyst
: And just another question, trying to compare slide 4 -- slide 4 and 11 from today's deck. So slide 11, you've maintained what it was a few months
ago, you maintained all of your market outlook for tractors across the three regions that you show to maintain that. But on slide 4, especially for
tractors, the nine-month performance year to date, contraction for tractors in North America and in Europe are worse versus the six-month
performance. South America I think is a bit better. But can you explain that a bit or reconcile that a bit, how you've been able to keep the full year
outlook the same? But there's contractions gotten worse and then you thought, well, contraction trends are worse through nine months versus
six months.
Question: Tami Zakaria - JPMorgan Chase & Co. - Analyst
: So I think I heard you say you expect North America pricing to continue to be strong. Can you help us understand, do you expect any incremental
discounting needed to clear the channel? And what's really driving this expectation of pricing growth in North America? Is it mixed or are you
raising prices due to cost inflation? Anything to call out there? What underpins this expectation of positive pricing in North America against
suboptimal demand backdrop?
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NOVEMBER 05, 2024 / 3:00PM, AGCO.N - Q3 2024 AGCO Corp Earnings Call
Question: Tami Zakaria - JPMorgan Chase & Co. - Analyst
: And my second question is, can you remind what's your plan in terms of deleveraging the balance sheet? And should we expect more debt pay
down in the coming quarters? I think you paid down $150 million with the proceeds but any more plans of debt paydown in the next few quarters?
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