Good day. And thank you for standing by. Welcome to the AGCO 2021 Fourth Quarter Earnings Release Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Greg Peterson, AGCO Head Investor Relations. Please go ahead.

Thanks, Regina, and good morning. Welcome to all of you that are joining us for AGCO's Fourth Quarter 2021 Earnings Call. You find our slides posted on our website at www.agcocorp.com. The non-GAAP measures that we are using in the presentation are reconciled to GAAP metrics in the appendix of that presentation. We'll make forward-looking statements this morning, including demand, product development and capital expenditure plans, production levels, engineering expense, exchange rate impacts, pricing, share repurchases, dividends and future commodity prices, crop production, supply chain inflation, component delivery, retail revenue, margins, earnings, cash flow, tax rates and other financial metrics. We wish to caution you that these statements are predictions and that actual events may differ materially. We refer you to the periodic reports that we file from time to time with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2020. These documents discuss important factors that could cause the actual results to differ materially from those contained in our forward-looking statements. These factors include, but are not limited to, adverse developments in the Ag industry, including those resulting from COVID-19, include plant closings, workforce availability and product demand. Supply chain disruptions, weather, exchange rate volatility, and commodity prices and changes in product demand. We disclaim any obligation to update any forward-looking statements, except as required by law. We will have a replay of this call on our corporate website later today. On the call with me this morning are Eric Hansotia, our Chairman, President and Chief Executive Officer; and Andy Beck, our Chief Financial Officer. With that, Eric, please go ahead.

We appreciate your interest in AGCO and your participation in the call today. We’ll start on slide 3 that provides the financial summary. We finished 2021 with a very solid fourth quarter, while mitigating supply chain delays and ongoing COVID challenges. I'd like to thank AGCO’s 23,000 employees for their hard work that resulted in world class support for our farmer customers throughout this challenging year. They were focused on the farmer and found hundreds of above and beyond solutions to tough problems. These efforts helped deliver fourth quarter sales growth of 16% with operating margins expanding by 160 basis points on an adjusted basis. For the full year, our net sales reached $11.1 billion. Adjusted operating margins improved 210 basis points to 9.1% and adjusted earnings per share hit $10.38. These are all records for AGCO in the history of our company. During 2021, we also executed an ambitious investment plan to expand our smart farming solutions and enhance our digital capabilities. We continue to experience significant component shortages that are impacting our production volumes. In addition, material and freight costs inflation remains high, requiring additional pricing to offset its impact. The encouraging news is that despite the global supply bottlenecks and inflationary pressures, farmer economics remain very healthy, and global end market demand remains strong. We expect supportive market conditions to continue into 2022. Our new financial outlook reflects this optimism as we plan to continue to make technology related investments as well as to return cash to our shareholders. Slide 4 details industry unit retail sales by region for full year of 2021. Elevated soft commodity prices supported improved farm income in 2021 despite significantly higher farm input costs, and therefore the financial health of our farmer customers remain strong. These favorable farm fundamentals are resulting in…

Thank you, Eric. And good morning, everyone. I'll start on slide 9 which looks at AGCO’s regional net sales performance for the fourth quarter and full year of 2021. AGCO’s net sales were up about 19% compared to a strong fourth quarter 2020 excluding the negative impact of currency. Robust end market demand as well as favorable pricing drove the increase. The Europe, Middle East segment reported an increase in net sales approximately 9% excluding the negative impact of currency translation, compared to the high level of sales in the fourth quarter of the prior year, which benefited from the catch up of deliveries of equipment following factory shutdowns in the first half of 2020. Net sales in North America increased approximately 39% excluding favorable impact of currency translation compared to the levels experienced in the fourth quarter of 2020. Increase sales of tractors, grain and protein equipment and sprayers produced most of the increase. AGCO’s fourth quarter net sales in South America grew approximately 56% compared to the fourth quarter of 2020 excluding currency impacts. Sales were strongly up across all of the South American markets. High horsepower and midsize tractors planters and grain and protein equipment showed the most increase. Net sales in our Asia Pacific Africa segment increased about 15% compared to the high level sales in the fourth quarter of 2020 on a constant currency basis. Higher sales in Africa and Australia supported the increase. Consolidated replacement parts sales were approximately $366 million for the fourth quarter 2021 compared to $345 million for the fourth quarter of 2020. Parts sales for the fourth quarter were 6% higher than the prior year. On Slide 10, we examine AGCO’s sales and margin performance. AGCO’s 2021 adjusted operating margins improved by approximately 160 basis points in the fourth quarter,…

Thanks Andy. As we move to the question-and-answer phase of this call, we'll ask that you limit yourself to one question and one follow up question, Regina, please get started.

[Operator Instructions] Your first question will come from the line of [Tammy Beccaria] with JP Morgan.

Hi, good morning. Thank you for taking my questions. So my first question is, I think in your slides, you mentioned market share gains expected this year. Can you provide some color on what segments or regions? Where do you expect the greatest penetration to occur this year?

Well, we've made a number of investments in a few years that we've talked about in the past, we're globalizing our Fendt business, we're growing our Precision Planting business, we're going our service parts business, and each of those areas, and those are just some examples. Each of those areas, we expect some success based on the products we've launched recently. And the markets that all three of those participate in, really is Europe, North America and South America. So that's I think there's a lot of detail behind that. But big picture, that's where our focuses.

Got it. So basically, market share gains across regions is the plan for this year. Understood. And my follow up question is, you mentioned about a sprayer retrofit option that you want to introduce, would that be available for others sprayer brands like your competitor brands? Or would it be exclusive to you only?

No, that's the difference in our strategy, our retrofit solutions fit on fundamentally all brands, there may be a small niche brand or something like that but our intention is that we serve the entire market. And we can upgrade the capabilities of the existing fleet that's out there, which is the large proportion of the machines in the field doing work to new technology using a retrofit channel, instead of having, it would have to buy a full end to end new solution.

Your next question will come from the line of Jamie Cook with Credit Suisse.

Hi, good morning, and nice quarter, I guess two questions. One, Andy, I appreciate your color on the first quarter with EPS and margins, but can you help us understand how you expect sales and margin, just the cadence throughout the year? A lot of companies are talking about much weaker first half versus second half so just any color there? And then my second question, I'm just trying to understand your top line guide, I think it implies 11% revenue growth, but you have 7% to 8% pricing, understanding FX is negative, but like, assuming market share gains, I don't know it just doesn't seem like you're implying much in volume unless I'm missing something. So if you could help me out from that perspective, thank you.

Sure, Jamie. In terms of margins, as we said, we expect our overall margin in the first quarter to be below last year, probably about could be up to 100 basis points down. That's driven by higher engineering expenses, and also kind of a weaker mix. And also, our pricing while covering our material cost inflation is not doing at the margin. So we'll see some margin reduction as a result of that. As we move throughout the year, it's kind of consistent with what you said, Jamie, flattish margins in the second quarter, and then we start to see improve margins in the second half. And so that's the profile what we're expecting throughout this year. In terms of our sales forecast, as you pointed out, you have to keep in mind that there is a negative currency impact. So that is limiting the sales growth a little bit this year. But we're expecting to see, as Eric mentioned, in certain segments, market share improvement. And that's being focused on in terms of our regional results in terms of North America, where we'll see I think, improve sales and as well as in our South America region as well.

Hey, Jamie, also Part of the reason that our first quarter starting out at a little lower from a margin perspective, and Andy mentioned that we're having some supply chain issues, more significant supply chain issues in our Precision Planting business, which is very first quarter centric, first and second quarter centric, we actually did fairly well with precision planting in terms of our supply chain in 2021. We started to feel it more at the end of the year, a lot of their products are chip intensive. And so we'll have some delays, likely because of that. And so that's why our first, margins in the first quarter anyway are going to be a little bit light.

Your next question comes from the line of Nicole DeBlase with Deutsche Bank.

Yes, thanks. Good morning, guys. Can we just talk a little bit about the outlook for production in 2022? So the commentary on margin progression is really helpful. But can you maybe do something similar with how production looks like quarter next year?

Yes, so the production should follow our sales revenue for the most part during 2022. We have looking at production increases probably in the 15%, first half of the year, and then it'll be more like 5% in the second half. And that'll end up at about a 10% improvement.

Got it, thanks, Andy. And then just could you comment a little bit on dealer inventory levels, I suspect, obviously, still very well and probably not much scope for restocking given the strength in backlog. But is that the right way to characterize what you're thinking for ‘22.

Yes, our dealer inventory levels are really in good shape. Obviously, we're having the supply chain disruptions and challenges and a strong retail sales environment. We've lowered our dealer inventory, really across the board during ‘21 versus ‘20, most significantly in South America, but really in our other regions, as well. So dealer inventories are pretty tight right now, with the similar situations in terms of our supply chain, and our projected high retail demand that we see in the marketplace, we don't expect to see much change in our dealer inventory levels. If possible, we'd like to see some improvement in dealer inventory or increase in dealer inventories in South America, and maybe within our low horsepower segment in North America. But for the most part, we're planning for dealer inventories to be relatively consistent with what we have at the end of ‘21.

Your next question will come from the line of Larry De Maria with William Blair.

Hi, thanks. Good morning, everybody. As far as GSI goes, can you just help us understand from the sales and marketing expectations here. I think it may be entering maybe a better point in the cycle for that business that was under pressure started the rebound. And margins have been kind of on the weak side, obviously. So can you just give us a bit more color around expectations here?

Sure, so the grain and protein business has been a challenging market in the last couple of years, we saw a nice rebound in our revenues here, about 20% in 2021. And for ‘22, we expect a similar increase probably 15% to 20% in revenue. With the strong grain prices, there's demand for grain handling equipment and storage. And as we mentioned, on our prepared notes, the protein sector is still recovering, starting to get a little better, protein prices are up and so there's some demand coming there. So we would expect to see another bump in revenue this year, where we had challenges in ‘21 with our margins really had performance issues because of the timing and lag between when we had our order intake versus ability to fulfill the orders in our projects, which were oftentimes delayed, which created cost increases as the steel prices went up. And so our pricing and our costs were out of balance, and that severely impacted our margins this year and impacted us in the fourth quarter in North America as well. So we think we're getting beyond that mismatch or miss timing of our pricing versus costs, and we expect to see a much better margin improvement in 2022. So that should contribute to improve margins, particularly in our North America region.

Thanks Andy. And then a couple follow up with, the engineering expansion up substantially, or is expected to be up and it's obviously up for last few years. What's your ability to pull that back when the market pulls back or is the stuff that's going in there now, because of the Ag tech, Ag offerings, so mission critical that's going to stay high for the foreseeable future? Thanks.

Yes, I'll take that one, Larry. I would say there's a bit of both in my answer. In the one hand, a lot of our work is moving to more and more software and data focus. And so the new skills that we're bringing on now we think are the skills for the future. But we're doing the overall investment in a way that the total or total group has a flex lever to it. So something like 20% of our staff is contract or some sort of flexible mechanism, where if we were to go back down, we have choices on dialing it back from a cost standpoint, but I think the new skills are probably skills, we would keep them and we would probably dial back some of the other portions of the engineering team.

Your next question will come from the line of Ross Gilardi with Bank of America.

Good morning, guys. Yes, I was hoping your guiding to just about a 10% margin for 2022. Where does that leave you in relation to your mid cycle framework that you had presented at your Investor Day which was basically 10%, I mean, should we expect you to update that target anytime soon. And just if you could address some of the regions in the -- to your men’s credit, I mean, you guys have come an awfully long way in the Americas. Just talk about the sustainability or margin improvement there. And it is possible that margins outside of EMEA sounds crazy to even be asking this, given where we were a couple years ago, it could actually eclipse EMEA on a full year basis at some point in the future.

I can take this one, Ross. So you can think back just a few years ago, we are very unbalanced company, we had most of our margin was coming from EME, and then the other markets weren't as high as we'd like them to. This year, you take a look at where things are. And it's a much more balanced everything 10% to 13% margins, round numbers, 9% to 13%. So it's a much more balanced company. And then the question was, to what degree is that sustainable? We feel really good about it. Because a lot of this has been based on both a distribution focus and a product focus shift over time, we're focusing on precision Ag, digital, large Ag and the professional producer. In South America, we've moved from the south, low tech small machines to also focus on more in the north in the Serato region, higher tech larger machines with big dealers in that region. So we feel good about that. One of the comment I would say about grain and protein, we've made a number -- all kinds of -- Andy's comments are spot on, we made a number of transformation efforts there also in 2020 and 2021, consolidated facilities took out SG&A and taken a lot of cost. In 2021, a fair bit of that was overshadowed by the crazy steel price increases, that when we have this with our order bank we're playing catch up on but those changes are behind us now. So as prices catch up to costs, which we expect in 2022, we should see the benefit of that coming through to the bottom line as well, the expectation is the same for that businesses as in our other businesses. So you can see a much more balanced outlook for the overall company.

So should we expect you to raise that 10% margin target which I would -- I interpreted as kind of a through the cycle target when you originally presented it? And are you basically implying that that the grain and storage business is actually lower margins than the overall traditional Ag business is now? So I don't think that was the case back in the day.

Yes, the right now the grain and protein margins are below and so as we, as I outline there's been some significant challenges for that business. But there's we believe we can get those back up, at least to our corporate averages, what you see and has an opportunity or potential to be even that from what we've experienced in the past, but market conditions need to improve and get a little more stable cost profile for us to get there. And that the 10% goal is still in place, we haven't achieved that yet. That was also a mid-cycle goal. So we've still got some room to improve. And we're hoping to show that we're executing on those margin improvement targets that we've talked about in our strategy meeting. And we feel like we did a good job this year with margin improvement. And our goals for this year reflect further improvement. So we've still got a ways to go, and there's more opportunity to come.

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

Good morning, guys. Thanks for taking the question. I just wanted to go back to some of the supply chain issues that obviously everybody's seeing, but it wasn't quite clear. Are you basically assuming that they kind of continue as they are, as your base case for ‘22? Or do they improve as we go through ‘22? Just any color on how you're looking at that?

Yes, so well, we have clear visibility on is kind of what we've talked about in the first quarter. And as Greg mentioned, we see some challenges in our Precision Planting business, we've got some other challenges going on today. We actually believe that's going to continue throughout the year. With the exception of the semiconductor chips, I would say that we're seeing improvement, but the chips still are a challenge for us. And but we're also taking a lot of actions to mitigate that, we're redesigning some of our products to take different chips to give us more flexibility there. And we're all obviously also working on resourcing some of the chips to other suppliers that may have more capacity. So a lot of work going on. And some of that will help us in the second half of the year.

Okay, great. And then just obviously, steel prices seem like maybe they're coming back in a more positive direction. I don't know what you've forecasted in your ‘22 guidance. But how long would it be until we might see some benefit of lower steel costs? And I assume you think you would get to keep the price increases that you've put through? But please correct me if you disagree?

Yes. So good question, Steve, as you're aware of a lot of the steel we buy is we don't use a lot of raw steel with the exception of our grain and protein business. So we're -- there's a bit of a delay, but from the time you see steel move, raw steel prices move one way or the other till the time we feel it in our supply chain. So for sure, the first half is going to continue to be challenged by those higher steel prices. If you look at our net pricing assumptions, if you look at our pricing less what our inflation, material inflation is, we're expecting still to be challenged in the first half first quarter actually kind of breakeven-ish on a net pricing basis. And then that improves to the point where we think the full year is going to be 50 to 100 basis points positive on that net pricing. So that means we improve modestly, probably as we get to the second half, and then through the second half so.

Your next question will come from the line of Courtney Yakavonis with Morgan Stanley.

Hi, good morning, guys. I just wanted to go back, Andy, you had mentioned that the 10% margin target was a mid-cycle goal, and you still have room to improve. So can you just comment a little bit on where you see the Ag cycle right now? And I think you made some comments earlier also about ag equipment demand remaining fairly strong in light of high grain input costs, so if you can just talk about some of the pressures on the farmer and where you see the cycle relative to replacement demand and some of the other fundamental impacts?

Yes, that's a good question. One of the things that we look at is our calculated or estimated calculation of the average age of the fleet that's out in the marketplace. During the lean times, farmers hold off on buying and so the average age of the fleet gets older and older. And now we're into a period where farmers have profitability to be able to refresh their fleet and the age of the fleet gets younger. So we watch that as it compares to the say 10 year average. And the fleet is still especially in some of the markets that are more volatile. Europe is the least volatile. North and South America are more volatile. And so Europe stays closer to that average age. And hovers kind of up and down in a smaller range. But North and South America are still in the recovery mode in terms of replacing that fleet age, and even their projections forward out to 2023, 2022, we have so many orders in hand that it's pretty solid. So it's really all about guessing what 2023 will be. And we still see a need to replace the fleet combined with all of the new technology that we're coming out with, creates an ROI for farmers. And that creates an incentive for them to upgrade to be able to access the new performance levels.

Great. That's helpful. And then if you could also just make the comment, I think you talked about the Precision Planting business being one of the most impacted by supply chain in the first quarter. Can you just remind us how the order book work there? And if there are supply chain issues, should we consider those relatively lost fails if they aren't out before the planting season or can you ship those later?

Yes, that is a great point that the planting season is right here and now. And so the delays do cause issues for that part of the business. So they are having to limit orders and take on certain products because we won't have to be able to -- we won't be able to supply them in time for the season. But they also do the team also believes that we can catch up to some extent during the course of the rest of the year. So we've limited our projections on Precision Planting sales, because of this issue. And I think it definitely is having a full year impact.

But there's not – and just to build on that so you can get in the mindset of the farmer. We don't expect farmers to cancel orders. So it'd be unfortunate, we're working really hard if we missed the planting window. But if we do, we still expect the farmer to take delivery of those and be able to use it in their next cycle.

Your next question will come from the line of Jerry Revich with Goldman Sachs.

Yes. Hi, good morning, everyone. I'm wondering if you could talk about the growth outlook for precision Ag that's embedded in your outlook just to flush out that last question bit more and talk about views as well. And if you can, can you tell us where Massey Ferguson take rates for the proprietary guidance systems are shaping up for ‘22? Thanks.

Sure, Jerry, in terms of our overall precision ag sales, we're looking at an increase of about 15% to 20% this year, as we just discussed the Precision Planting portion of that, where we're looking at somewhere about 10% growth. So as I said, this supply chain issue is impacting the sales forecast that we have for that business at this time. But overall, including our other precision Ag products would be a 15% to 20% improvement.

And just to put that in context Precision Ag sales for 2021 for the full year, were up 34% compared to the 16% for AGCO in total. Precision Planting, we've talked about is up 44% fuses up 23%. Our smart planter growth, the model number we call as momentum with smart technology had 40% growth over 2020. And so our smart rose in total when you combine AGCO and Precision Planting is up 32%. On sprayers, we're seeing 24% growth in the sales of smart nozzles in our European sprayers. And an ideal combine grew from 2020 to 2021, 70% and 80% from ‘21 to ‘22. So it's in all areas where we're putting these technologies into the market, we're seeing high famer interest and in good margins.

That's terrific. And then can we shift gears and talk about North America? You've been ramping up the Fendt brand and what have you just update us on what's the mix of Fendt versus Massey versus Challenger revenues in that market today? And if you can give us an update on the dealer count.

Yes, maybe Eric can talk about the dealers while I'm trying to get that –

Sure. We have, zooming off the top of my head here so we'll get close. But we have 72 to 75 Fendt dealers that we've turned on about 200 locations. So 72 owner groups, 200 locations, and that covers something on the order of 70% of the market. Our mission over the next couple years is to get that up over 90% of market potential covered with dealer locations. As a reminder with that, even if you -- if even if a dealer organization gets approved, not every location within their facility will get approved. So maybe half of them will, they all have to meet the very, very high bar of Fendt standards. Massey Ferguson, we've been doing some consolidations on the one end, but then we've also been adding a few new stores, say 15 to 20 in the more urban areas, small egg focused, rural lifestyle dealer outlets. So the Massey Ferguson is somewhat balanced in terms of how many we consolidate versus how many we add. And Challenger is really runs alongside if you look at wherever Challenger is sold, it's typically sold through Fendt dealer. That's the dealer's situation.

Sure. So on the Fendt sales in North America, our sales were up about 50% this year. And that includes some substitution of other products, if you take that out, it'd be about 40%. And now Fendt is about 15% of our North America sales. So we're seeing strong growth in that segment of the business.

Your next question will come from the line of Kristen Owen with Oppenheimer.

Great, thank you. Sort of a follow up to that last question. And I'm wondering if you can just help us understand the CRM rollout that you mentioned in the prepared remarks, and anticipating that growing from 7% to 30% of targeted dealers this year in North America, just help us understand what that means for the business for your dealer network. How much of that is targeted at this Fendt rollout and just how we should think about that in terms of your impact on market share expectation.

Yes, what we're seeing is we're helping our dealers move from a very local notebook in the hands of an individual salesperson, highly variable process for sales to occur to one that's more database, more structured, more proactive. So once the data is in the system, and you can manage the sales leads have a percent likelihood, then the dealer organization can do things like load balance, different sales, people, they can make sure that their inventory planning is matching up with their sales leads that are coming in. They can be managing their used inventory proactively. If we're on a number of deals, then we know we're going to get trade-ins, we can start managing those used and start pre selling those. So it's fundamentally changes the entire selling activity from one of local manual fragmented to much more proactive and disciplined. And that’s what we've seen as in the areas where we've rolled it out early. Europe has been our early rollout locations and that's what the dealers tell us. And we, some of the dealers don't need this as much. So that's why you don't see us going to 100% in some of the markets, some of the very large dealers already had very sophisticated CRM tools, where dealers don't have that that's where we step in and help them.

Thank you for that. And then my follow up question. You didn't talk a whole lot about the investments that you made in the fourth quarter, but I wanted to ask specifically about the Appareo acquisition, that was obviously a partner of yours in your network. Just help us understand the motivation for bringing that in-house and how that will contribute to your product roadmap. Thank you very much.

Yes, Appareo like several of the other acquisitions that were made really are an intersection of a few things. Number one, it's a skill set, software based artificial intelligence, machine learning, data work. Those are the skill sets that were very interested in bringing in to AGCO. But they also have to have the right culture fit in terms of the company. So we looked at many more companies than were on the list of the ones that we closed. And for one reason or another, we ended up choosing not to close the deals on the other ones, but we feel really good about Appareo as well as the other companies that we've listed there. And we want them to work now in a coordinated way with our Precision Planting team in our smart machine development groups so that we can accelerate our delivery of solutions to farmers.

Our final question will come from the line of Chad Dillard with Bernstein.

Hi, good morning, guys. So just want to go back to the margins for the year. So for ‘22 your gains implies incremental operating margins about 16%. Can you help us bridge to your more normal kind of 25% incremental margin? Just want to get a sense for how much of a headwind you're seeing on the materials, freight, production efficiencies, and start to think about how each of those layer in through the balance of the year?

Sure, Chad, first of all, if you factor out the fairly significant increase in engineering expense, that we have in ‘22, as we said, we're expecting a 15% to 20% increase, those incremental margins projections would be more in the low 20%. And so that's the about and then we're also seeing some SG&A increases this year, as we wage inflation, we're spending more in digital, some of the things that Eric talked about a little more travel, advertising, sales promotion, expenses are going up. So that's probably part of your reconciliation there. And then lastly, with this high inflationary environment where we're having to price 7% or 8%, just to basically cover our costs and get a little bit of margin on our net pricing is the other big factor. It's, I think, if we can achieve that level of pretty solid performance, given the amount of inflation in the market right now.

Got it. That's helpful. And then just going back to your prepared remarks, Eric, about the retrofit sprayer opportunity that you introduced a little while ago. Can you just talk about the productivity benefits? The technology behind it, is it green on brown? Or is actually green on green? And then, do you have a sense for just when this product would be commercially available, and the timing there?

Yes, so I'll try and do that one short, you can get me pretty excited about these, this discussion. But the foundation is a vision system, mounted onto the boom of the sprayer, works with some artificial intelligence, that then identifies as the sprayers moving through the field, what's a plant and what's a weed and then is able to automatically adjust the system such that we can targeted spray those weeds with the right chemical. So it'll have the system capability will be both green, and brown, and green and green solutions retrofitable. All makes. And then there'll be other capabilities, in addition to just targeted spraying with those vision systems. We'll also be able to do on the fly crop scouting, be able to do mapping of what are the field populations, what was the planting accuracy, we can measure plant to plant variation in terms of spacing, and all sorts of things are capable once you have that foundation technology. We have not committed to a release date yet. But you'll be hearing more about these technologies soon. There's a lot of excitement, I was sitting right in among all the farmers, just recently, a few weeks back. And there was incredible buzz of excitement about the system that's being shown here. There's, it was displayed at the Precision Planting Winter Conference. So you'll be hearing more shortly.

I'll now hand the conference back over to management for any further closing remarks.

Okay, I'll just close today with saying thank you very much for your participation and your support of AGCO. Over these past years, we're very excited about 2021. It was a record year in many, many ways. And if you peel the onion back a little bit, you see that the key success areas are right at the same places of the core of our strategy that we shared with you last spring. Our focus is on growing our strong businesses like Fendt, North America large ag service parts, and then our precision ag and smart machine business overall. We've committed to you to improve some of our other businesses like Massey Ferguson in South America, and our grain and protein and you're seeing the results come through on all of those whether there are improvement businesses or our growth businesses. We're investing heavily growing the largest improved increase in investment in R&D last year. And now we're making an even bigger one this year, to continue to fund the development of these farmer focused solutions that are really solving critical farmer problems that have a short payback. And you're seeing that the take rates on those are very high and the margins are high. And then wrapping all of this, we're really engaging strongly on sustainability, putting more and more of our technology efforts on that, and in capturing a lot more data, helping our farmers make the transition to not only a more productive farm, but a more sustainable farm. So we're excited about 2021. But we're even more excited about 2022 and beyond. We're convinced that the best days of Ag Cornerstone front of us, thank you.

Ladies and gentlemen, that does conclude today's call. Thank you all for joining and you may now disconnect.