Ladies and gentlemen, thank you for standing by and welcome to the AGCO 2022 First Quarter Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Greg Peterson, AGCO Head of Investor Relations. Mr. Peterson please go ahead.

Thank you, Lorenz and good morning. Welcome to all of you who are joining us for our AGCO’s first quarter 2022 earnings conference call. This morning, we do have slides we will refer to, and those were posted on our website at www.agcocorp.com. The non-GAAP measures used in that presentation are reconciled to GAAP metrics in the appendix of the presentation. We’ll also make forward-looking statements, including demand, product development and capital expenditure plans, production levels, engineering expense, exchange rate impacts, pricing, share repurchases, dividends, future commodity prices, crop production, our supply chain inflation, component deliveries, 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’ll 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 31st, 2021. 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 agricultural industry, including those resulting from COVID-19, including plant closings, workforce availability and product demand, supply chain disruption, the war in the Ukraine, weather, exchange rate volatility, commodity prices and changes in product demand. We disclaim any obligation to update any forward-looking statements except as required by law. We’ll have a replay of our conference call available 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.

Thank you, Greg and good morning. We appreciate your interest in AGCO and your participation on the call today. The headline this morning is that the financial health of our farmer customers continues to be very strong, and demand for AGCO – AGCO’s major end markets remains robust. However supply chain disruptions and inflationary cost pressures, further compounded by the war in Ukraine have created an extremely challenging operating environment. Despite these obstacles, AGCO reported record first quarter sales and earnings, resulting in sales growth and margin improvement as compared to the first quarter of the prior year. You can see from Slide 3, that our first quarter sales grew nearly 13%, compared to what were record levels at the first quarter of 2021. Adjusted operating margins improved by almost 80 basis points, as favorable pricing helped to offset most of the material costs inflation in the first quarter. However, we expect continued headwinds from higher material costs during the remainder of the year. The market remains receptive to our strong product lineup and technology. We have raised our pricing outlook for the full year. Our customers’ growing interest in AGCO’s Precision Ag solutions is supporting strong order boards. We expect healthy market conditions to continue, and our new financial outlook for 2022 reflects this optimism. We have increased our sales and earnings’ forecast and expect to generate significant free cash flow this year. The strong performance supports our technology related investments aimed at advancing our digital capabilities and growing our Precision Ag business. We will also continue to return cash to our shareholders. Last week, we announced a variable special dividend of $4.50 per share, as well as a 20% increase in our regular dividend. Slide 4 details industry unit retail sales by region for the first quarter of…

Thank you, Eric and good morning to everyone. I’ll start on Slide 8, which looks at AGCO’s regional net sales performance for the first quarter of 2022. AGCO’s net sales were about 18%, up compared to the strong first quarter of 2021, excluding the negative impact of currency translation. Robust end market demand as well as favorable pricing of approximately 8% drove the increase. Europe/Middle East segment reported an increase in net sales of approximately 15%, excluding the negative impact of currency translation, compared to the high level sales in the first quarter of the prior year. Stronger growth in France and Scandinavia were partially offset by lower sales in Russia and the Ukraine. Net sales in North America increased approximately 15% excluding the unfavorable impact of currency translation, compared to the levels experienced in the first quarter of 2021. The increase resulted from the impact of pricing to mitigate inflationary cost pressures, along with increased sales of tractors, as well as grain and protein equipment, partially offset by lower sales of Precision Planting products. AGCO’s first quarter net sales in South America grew approximately 42% compared to the first quarter of 2021, excluding favorable currency translation impacts. Sales were up strongly across all the South American markets. High horsepower midsized tractors, and grain and protein equipment showed the most increase. Net sales in our Asia Pacific/Africa segment increased about 18% compared to the high levels – high sales levels in the first quarter of 2021 on a constant currency basis. Higher sales in Australia, Africa and Japan were offset by lower sales in China. Consolidated replacement part sales were approximately $446 million for the first quarter of 2022 compared to $399 million for the first quarter of 2021. Part sales for the first quarter approximately 12% higher than the…

Thanks, Andy. To encourage broader participation, we’ll ask that you limit yourselves to one question and one follow-up. And so Lorenz, with that, we’re ready to move into the Q&A session.

[Operator Instructions] Your first question comes from the line of Seth Weber from Wells Fargo. Your line is open.

Hi, thanks. Good morning, everybody. Wanted to ask about the Precision Planting pickup in the first quarter. I’m just trying to understand whether those sales do you think will still happen later this year in the second quarter or later this year? Or whether you think those sales are lost? That’s my first question. Thanks.

Yeah, Seth. So, as we pointed out in our comments and you’re pointing out, our Precision Planting business was impacted by supply chain issues, particularly around chips and the availability of chips. And so, our first quarter sales were down about 16% in the first quarter. If you would have excluded the acquisition impact, it would have been more like 25%. So, fairly significant impact. As we look through the year, we’re expecting just to catch that up. We’ll be a little bit flatter in the second quarter and then in the back half, we expect to you know catch up with the rest of the sales. And our target is that, our sales would be up about 10% to 15% and for the full year with acquisitions and up about flat to up 5% without the impact of those acquisitions. You know our order board is very strong in Precision Planting, the interest level is still extremely high. And so, although we’re going to miss some of the season and some of these customers are not going to be able to use it for – in the planting season for this year, you know they’re still anxious to get their hands on as technology. And so we really think that you know we’ll be able to catch up a lot of this in the second half of the year. Our fourth quarter of last year was relatively weak. We were already experiencing a lot of issues with chip availability. And so we expect a lot of this to be caught up in the fourth quarter.

Okay, thanks. And then just my follow-up question, Andy, can you just talk a little bit about you know the cost of doing business in Europe today you know just AGCO’s operating costs from running factories and just you know that your ability to source what you need just to run the factories and things like that. Can you just talk about what you’re expecting for the Europe footprint, in particular, for the balance of the year?

Yeah, in general. Seth, I’ll take that, this is Eric. Europe is typically not as cyclical as the rest of the other markets. So the demand is more moderate in terms of its cycles. Our ability to supply is really our main focus, and then your question is also about inflation. We have had challenges with our European supply base, and it’s caused us to miss a few shifts here and there. But I think you – if I’m reading into your question, I think you’re asking, has it gotten significantly worse. And we would say, not really. It’s – maybe we had a little bit of uptick in terms of challenge with the Ukraine crisis. There’s a few suppliers that we had to work around, but it’s nothing significant. So it’s really in line with all the comments Andy made about the overall challenges with supply chain globally. And I wouldn’t point to anything unique in Europe right now. And one other comment is that, prior to the Ukraine invasion, we had a task force that we launched maybe a month before and looked at all of our energy sourcing to identify proactively any alternatives that might be available in case something did happen. And we’re really thankful we did that pre-work, because for right now, we’re – you know knock on wood, but right now we’re in a good position relative to energy to the factories.

That – that answer the question. Thanks very much, Eric. Appreciate it guys.

Yeah.

And your next question comes from the line of Stephen Volkmann from Jefferies. Your line is open.

Hi, good morning, guys. Thank you. And I wanted to start off just on pricing. I see you raised your pricing expectations a couple of points. And I guess I had sort of thought most of your backlog was probably kind of fixed price. So just what’s the dynamic where you can kind of push that extra pricing this quickly?

You know we saw – you know we didn’t expect it to be this severe, but we saw inflationary pressure coming already last – at the end of last year. So we put together a task force or a team, a cross-functional team that was looking at our global pricing process and worked even with an outside partner to be able to really get data access, quick analytics, be able to move and then, be able to look, create a whole menu of options of what to do at different levels of discounts, what to do with top line pricing and in some cases, even what to do with some surcharges. And so, the pricing team now is being able to capture that data, react very fast, use some data analytics tools and then, depending on the market, select off of this menu, which tools to use into the marketplace that are appropriate for those conditions. So far, I think that proactive team has paid off and we’ve stayed ahead of the inflationary price challenges with the pricing we put into the market. And we continue to keep that in place for the rest of the year for sure. It’s a tool that’s working well and so we’re just going to keep that in place.

Great, okay. That’s helpful. Thanks. And then, Eric maybe for you. I just find it interesting that the sentiment indices that we all look at are pretty weak in the US and in Europe, and seems to fly in the face of what you guys are seeing relative to demand trends. And I’m just curious as you think about like looking sort of over the horizon of your current backlog, you know are you worried about the trends in the business? Or do you think something else is really accounts for those weak sentiment readings?

Well, the sentiment I think is just a bit of a reflection of the high degree of uncertainty in the market. You turn on the news and no matter whether it’s farming or automotive or any industry, there’s just an enormous amount of uncertainty, and that gets replayed and replayed in the media. And so I think at some point that weighs on farmers’ perceptions. Now when it comes right down to it, they’re still ordering. They’re ordering – you know our order – book continues to go up. They still accept the price increases. So you know that – and that’s – and why is that? It’s because grains at record prices. Corn is over $8. Soybeans over $16. Wheat’s over 11%. Those are record high prices and farmers are able to lock those prices in for next year. Now, they’re also seeing higher input costs, diesel, fertilizer, seed and other chemicals are going up. But net-net, farmers are still in a very profitable situation. So I think it’s a lot about the bombardment of uncertain media pressure that they’re surrounded by that has them answer what they do. But at the end of the day, they still buy.

Okay, good. I hope they’re not reading sell-side research to make that worse. But thank you for that. I’ll pass it on.

You bet.

And your next question comes from the line of Avi Jaroslawicz from UBS. Your line is open.

Hey, guys. Thanks for taking the call. So just want to understand kind of $300 million revenue guidance. It seems to be more on the volume side than on pricing. One, I think of that right and two, is that that Q1 came in better than you expected? Or are you seeing improvement that’s giving you more confidence for the rest of the year?

Yeah we – as you point out, we raised the guidance a slight bit reflecting the increase in pricing. We up that 200, 300 basis points. We did lose a little bit on exchange with the euro dropping. So there was some actual volume increases that we put in there. I would say they were weighted primarily to South America and a little bit to Europe based on you know order levels and what we foresee we can accomplish in terms of the supply chain. Again, our order boards are you know very strong. And so it’s really still all about you know what amount of supply chain performance can we achieve during the year. And we’re just tweaking those – you know those assumptions as we go throughout the year. Our first quarter, the revenue was pretty close to what we thought it would be. I wouldn’t say we outperformed there. It was more on the margin side that we did better in the first quarter.

Got it. All right. I’ll hop back in line. Thanks, guys.

Your next question comes from the line of Jamie Cook from Credit Suisse. Your line is open.

Hi. This is [indiscernible] on for Jamie. Thanks for taking my question. So I was wondering if you could share your thoughts around the current versus Ukraine situation and what you think that means for commodity prices longer-term? And if we could argue for like a stronger for longer ag cycle? And then I have a follow-up question after. Thanks.

Yes, there’s two factors you know if you look at the macro sense of what’s happening because of the Russia-Ukraine situation. Number one, a lot of grain came out of circulation. And that’s the short-term hit, where something like 13% of the exportable calories no longer made it to the market. That’s one of the primary reasons you’ve seen the grain prices go up strongly in the short-term. But then in the midterm to maybe two, three years, the other thing that came out of the marketplace is a lot of fertilizer. They were a source of fertilizer, not only to their own markets, but to Europe and South America and North America. And so around the world in general, farmers won’t put on as much fertilizer as they should this year, which means, yields will be lower than they otherwise could have been. And therefore, the grain stocks are just not going to get replenished like they could have been if there was more fertilizer available. That’s why you’re seeing the projections out there in terms of the futures prices are remaining high. Short-term grain availability, midterm fertilizer availability and the impact on yields. So we think that this is going to push high prices out for our farmers into the future and probably extend the – you know the top end of this business cycle or you know the strong business portion of the cycle that we’re in right now for some additional period.

Hey, that’s helpful. Thank you. My second question is on the EPS guide. So you beat – you won consensus by about 40 – more than $0.40, but the midpoint is up only $0.30. So I was wondering if you’re seeing any incremental cost pressure since last quarter and will that mostly hit Q2? Thanks.

I think you know in terms of reconciling to the last guidance, I think the real key factor there is, we did have to bring down our – the exchange rate impact. So that’s going to – that’s impacting us to some extent as we – I just mentioned, trying to offset that with some actual volume increases. And then secondly, as you pointed out, the material cost levels, we forecast them to increase more than what we had expected in the first set of guidance we gave and that’s why we’ve had to increase our price guidance as well. So we’re working hard to offset that, but there is some challenges as a result. And then lastly you know a little bit higher on the tax rate than where we thought we’d end up. So those were the main things. But all-in-all, looking to increase you know we’ve increased our guidance since the since the last guidance we gave at the beginning of the year.

That’s helpful. Thank you.

Your next question comes from the line of Tami Zakaria from BMO. Your line is open.

Hi. Thank you so much for taking my question. I have one question. It’s more of a longer-term one. How do you feel about your long-term operating margin as you sit here today? I think you want it to be 10% plus. You’re probably going to be that by the end of this year. So where can margins go, especially in light of what your other competitors are seeing? And can you remind us what are the likely sources of leverage over the medium to long-term strategy?

Sure. We absolutely want to continue to focus on operating margin improvement. As you said correctly, our first goal was to reach 10% and then we’ll establish new goals to exceed that going forward. The key drivers for margin improvement are additional operating leverage through growth, and we also want to grow our high-margin businesses. So that means, growing our Precision Ag businesses, which carry high margins, growing our premium product brands like the Fendt brand. We want to grow in North America, which we perceive as an important high horsepower market, the highest horsepower equipment, drives improved margins as well. And we’re constantly looking to be more productive within our purchasing capabilities and as well as you know our efficiencies in our plants. And then we have some businesses that we’re trying to improve, like, I think we’ve done a great job with South America. You see where that’s gone in the last few years and there are some other ones like grain and protein that we believe there’s margin expansion opportunities there that we’re working on. So, we’ve got a lot on the list of opportunities there that we’ll be working on very hard over the next few years to keep those margins going up.

Great. Thank you. And if I could ask a follow-up. I think you mentioned your volume outlook for Europe is a bit better now than you were expecting to begin the year. Is that improved volume outlook demand-driven? Or are you seeing some easing in the supply chain that makes you more hopeful?

Yeah. I would say that’s mainly just a little bit of tweaking what we think we’re going to get out of our supply chain for the most part. It’s not really a change in our outlook in the market.

Understood. Thank you.

Your next question comes from the line of Stanley Elliott from Stifel. Your line is open.

Hey, good morning, everybody. Thank you all for taking the question. A quick question on the Precision side. You know lots of acquisitions here recently. Does the launch or now that you have the FendtONE platform out there allow for all of these different businesses to be integrated in a much faster clip so that we you know potentially see this your part of the business accelerating even more so?

Yeah I’d – Stanley, thanks for the question. I’d have you think about it in two ways. One is, the FendtONE platform is our customer portal, and that’s the base for which new technology can be deployed, either on the machine or off-board and the customers to enjoy it. That’s for the OEM sales platform for our new technology. But retrofit is the other one. And I want to make sure that we never lose sight of that. I think AGCO is really, really focused on the retrofit market. Precision Planting is a market leader in that regard, and we’re continuing to add to that. Appareo, we closed on them in January. They have a – they had a retrofit channel. JCA is going to be added to that. So there will be a two-pronged approach to the market. One is, fast technology deployment through the retrofit for those early adopters willing to upgrade their machine, make a dumb machine into a smart high-tech machine that automates features. And then as those technologies become mature, then they migrate on to the OEM platform. FendtONE being one of them.

Perfect. That was it for me. Thanks, guys. Best of luck.

Yeah.

Your next question comes from the line of John Joyner from BMO. Your line is open.

Hey, good morning. And thank you for taking my questions. So, Eric you briefly touched on higher inventories being affected by you know lingering supply chain constraints. And then, Andy, you mentioned there are some tweaks to your outlook for maybe supply chains. I don’t know if you really said getting better, but maybe slightly. But, I guess can you reconcile that maybe give more color on, for example, you know if you look at your work in process inventory, it almost doubled from year end. So, when I look at that, I can assume that maybe the supply chain issues actually had gotten worse, but can you, I guess, add a little bit more color around that?

Yeah. Early in the year, we put together an aggressive plan for what we communicated to our suppliers and what we said our factories at. We wanted to – because we’ve got so many orders. We’ve got the highest order bank in the history of the company. We’re essentially sold out in almost all products for 2022, and we’re selling into ‘23 in many cases. So the whole deal is billed as much as we possibly can. We are expecting that during the course of the year that the supply chain would heal, it’s not healed as fast as we had hoped. And in fact, in some cases, because of the Russia-Ukraine thing, it got a little worse. So what’s happened is, 95% of the suppliers are supplying on time. It’s those few percent that are hand to mouth and constraining our overall output. So when you have a few suppliers not being able to deliver, many times, we can build the machine, put it in our lot behind the factory and wait for that one last part to come in, put that part on and then ship it. That’s why you see some WIP increase – work in process increase whereas machines partially mostly built. But we’ve also got extra raw material on hand because of these – most of the suppliers supplying on time. We’re going to pivot now as we enter this phase of the year and consider how much inventory we have more strongly as we place the orders on the rest of the supply base and moderate that during the year and get our inventory back in line with where it should be for raw material.

Okay. Thank you for that. And just one quick one, I guess. Can you tell us what’s baked into your, I guess, outlook for Precision Ag mix for the rest of the year?

Precision Ag.

Yeah. Our – John, are you asking about sales for the rest of the year or what?

Right, correct. Yeah.

Yeah we’ve got Precision Ag total sales, if we include Precision Planting and our Fuse business. Last year, our revenue was a little over $540 million, and we’re looking for that with these acquisitions as well to be up about 10% to 15% year-over-year.

Okay. Great. Thank you so much.

And that’s purely supply constrained. The demand is red hot on these products. It would be much, much higher. But if you think about our number one issue like everybody is semiconductor chips. The Precision Ag is loaded with semiconductor chips, just about everything we sell has a chip in it and many of them have multiple chips. So that’s – it’s constrained by supply, not at all by demand.

Got it. Yeah that’s kind of what I was asking the questions. I appreciate the color.

Your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is open.

Yes, hi good morning, everyone.

Good morning.

Hi, Jerry.

I’m wondering if you could just talk about the two solutions you folks outlined for crop protection and fertilizer and just step us through what’s the order of magnitude of reduction in you know both sets of inputs that you folks are piloting and what level of improvement in yield the products are showing. Can you just provide a bit more color on that, if you don’t mind?

Sure. There’s a number of solutions, and they’re based on Vision systems predominantly. And then there’s also the LiquidLogic system that we have on our sprayers already. But let’s talk about targeted spring. It’s a Vision system that identifies the difference between a weed and a plant, sprays just the weed. So in post-emergence spring, that means, you’re spraying a weed after it’s already come up, we can see savings in the 70% to 80% of chemical application. Now, we want to make – the reason I was careful about the wording on that is, because there’s still the need for pre-emergent application to a field, which is, when you put chemical down to prevent the weeds that come up in the first place. And so – but it’s really the big advantages on post-emergence, spring the weed after it’s come up once you can see it and there’s a significant reduction that’s available there. We also have the LiquidLogic system. We got Machine of the Year award this year at the farm shows. And that new sprayer able to go into high clearance or standard clearance. It can – and with this Boom Priming System, it can go into the field and immediately be productive, because the boom is already primed and that have to dump chemical at the end of the field to waste chemical and have a sustainability issue. So the combination of on-machine application as well as these new targeted spring kits. And as a reminder, Precision Planting is a retrofit solution. So these will go on all mix of sprayers, especially in North America to start off with, that’s our first target market. So we’ve got AGCO OEM solution and a retrofit solution for all mix.

And Eric, thank you for the color. So you mentioned you know it’s a post-emergence solution. So when you look at it on savings in chemicals per acre, what level of savings is that 70% to 80% equivalent to and you know how are you thinking about monetizing it?

Well, we’re you know the saving chemical applications are typically the largest cost for the farmer. And depending on the farming application, it’s somewhere in the 30% of their total cost range. If we think about the – how we monetize it, we’re looking at selling this at a price where the farmer – all of our Precision Planting technologies, we aim for a one-year payback, sometimes between one and two years, but we aim for a system solution price that can get enough savings on a typical-sized farm to be able to pay for the system in one year. And that’s how we think about the Targeted Spraying Solution as well.

Yeah, terrific. Thanks.

And your next question comes from the line of Courtney Yakavonis from Morgan Stanley. Your line is open.

Great, thanks. Good morning, guys. I was wondering if you could expand a little bit. I think you mentioned that 2Q EPS would be modestly below last year. Should we expect that similar to this quarter, really all of the margin pressure to show up in North America and still have you know margin expansion in the remaining divisions? Or is there anything else that we should be considering as we’re modeling that out?

Yeah. Courtney, you’re very right on there. So most of the margin pressure is in North America. We expect to see those margins be down similar to what we saw in the first quarter, kind of slight improvements, flattish to slight improvements in margin in Europe and Asia Pacific, Africa, and then South America with some pretty solid margin improvements in the second quarter. So overall, when we think about the margin impact, you know we’ve got the sales going up. But these material cost increases were again offsetting by pricing, but you know the margins are getting pressured, because we’re not offsetting them – we’re offsetting them on just on a dollar basis, but not on a margin basis. So that’s the real kind of big picture situation we see in Q2, and then we expect that to get better as we move throughout the year and get more pricing in place.

Got it. And then I think you mentioned a couple of times, you’d expect you know some of these deferred Precision Ag revenues to flow through later in the year as you get ship availability. I think typically, you’d see a sequential step down in 2Q sales. Should we be thinking about that a little bit differently this year given the issues with the supply chain?

That – the seasonality is still similar. So the – for this year, we expect Q2 to actually be the lowest sales quarter for Precision – for Precision Planting. And then, second half of the year, again, we – we’re looking to you know catch up some of these lost units that we missed in the first quarter and first half. And so, we’re – we see growth year-over-year in both third and fourth quarters.

Okay, sorry. And that was just for the Precision Planting business or that was for total revenues?

Precision Planting –

That was Precision Planting.

Okay. Okay, great. And then – Sorry, go ahead.

No, that’s it.

And sorry, just lastly on the pricing increase, I think previously, you know you had been taking more pricing in South America and some of the other parts of the world and a little bit less in Europe. Any change there given the increase in pricing? Or should we think about that pretty evenly spread as well?

No. Yeah. So, Courtney you’re right, Brazil still has the highest level of price increases, and that’s just simply due to the level of inflation. The other markets are slightly less than what we’ve quoted in terms of company average. So not much, but a little bit less than that company average.

Okay, great. Thank you.

Your next question comes from the line of Chad Dillard from Bernstein. Your line is open.

Hi. Good morning, guys.

Good morning, Chad.

Hi, Chad.

So how far out does your order book go? Are you taking 2023 orders yet? And if you can you know just give some color so how you’re ensuring kind of the good – the right price cost balance? And you know just any sense on just what sort of pricing you’ll be taking there?

Yeah. We’ve changed how we think about orders over the last year or two, and that is that [technical difficulty]

Ladies and gentlemen, this is the operator. I apologize that there is a slight delay in today’s conference. Please hold. The conference will resume momentarily. Excuse me, Greg and – speakers – in the main conference. Hello, Greg?

Yes. We’re here.

I can hear you now.

Can you hear us?

Yes, sir.

Okay. Do – should we finish the last question that we started? Or should we go – do we still have our participants on the line?

Yes, sir. We have your next question comes from the line of Kristen Owen from Oppenheimer & Company. Your line is open.

It looks like maybe our participants have dropped off. Eric, why don’t we go ahead and go right to the closing remarks and.

Okay. All right. I’ll close this morning by saying thank you very much for everybody on the line for your participation and your – and actually, more importantly, your continued support of AGCO. We’re off to a solid start in 2022, and we recognize we still have a lot of work in front of us for the balance of the year. We enjoy a record high order board level loaded with demand for our new products and technology. Our focus, as we’ve mentioned, is to manage a difficult supply chain and in an inflationary environment, so that we can continue to make progress growing our strong business like Fendt, North America large ag parts and our Precision Planting products. In addition, we’re investing heavily with another large increase in R&D this year as well as important technology acquisitions like JCA that we announced. We are continuing the development of farmer-focused solutions that are really solving critical farmer problems that have short payback. We are also engaging strongly on sustainability, helping our farmers make the transition to not only more productive farms, but more sustainable farms. We look forward to highlighting our technology in our Technology Day presentation next month. Thank you, and have a great day.

This concludes today’s conference call. You may now disconnect.