AGCO
#Thank you, <UNK>.
Have a nice day.
(laughter) Maybe we should invite some of the analysts to a trip to Venezuela.
(laughter)
We stay here, <UNK>.
Yes, before <UNK> talks about France, I would like to make a general observation.
To me, it looks like as if Europe, somewhat, is close to have bottomed out.
And Europe seems to be, in general, a little bit more stable than the other markets.
Of course, this varies a lot by countries, and we have the big upside that if the EU would come to terms regarding the sanctions for Russia, which could basically generate a counter-effect that the Russians would give up their sanctions, which mainly hit our customers in major markets in Europe, that Europe has a potential to improve.
So, I think the idea of sanctions, which to me is a very, very old-fashioned way of doing business in politics, needs to be reviewed.
And I think the very negative side effects for the EU have not been taken into consideration by the European leaders.
So, business, so far, doesn't talk so much about it, because we don't want to run our own diplomacy here.
But I think this needs to be changed, and I think discussions now are a little bit more constructive than they have been in the past, because also at the same time, some of the leaders weaken due to other reasons.
And with this, <UNK> can talk about France.
Hey, <UNK>.
The French market, as you recall, throughout 2015 was one of the worst performing markets, until we got late in the year.
And in the fourth quarter, the French market was up about 20% versus a year ago.
There is a government-sponsored incentive program, an accelerated or additional depreciation measure that you can take in France, and that stimulated demand in the fourth quarter.
And that made the French market be just slightly up for the full year.
Some of the other markets were also modestly up in the fourth quarter, and I think that leads to some of the comments <UNK> made about where that market is right now.
As we look forward into 2016, we are looking for some mixed results ---+ down likely in Germany, but stable or up in some of the other markets.
And again, our forecast is that 0% to 5% down.
The French incentive expires right now at the end of March.
And we are obviously hoping that that gets continued on, but there is no certainty around that at this point.
Sure, yes.
As you point out, the fourth-quarter margins were down.
In terms of the lower income levels there, we took a fairly big hit on currency, from a translation standpoint.
Then we had production down very significantly as well, during the fourth quarter.
And then obviously, just the sales down, because of the margin ---+ because of the market decline.
The one unusual item that I think also needs to be factored in is, if you recall, in fourth quarter of 2014, we had some big combine deals that we completed.
And that benefited us in the fourth quarter of 2014.
And obviously, we didn't get that again in 2015.
Those were in markets outside of Brazil.
So, I would say that, in terms of margin, it was split between production issues, being the lower production levels, and the mix, because of that big combine deal that had pretty good margins on it.
As we look forward into 2016, we are looking for the margins to be fairly similar to 2015 on a full-year basis.
Yes, we are not assuming that they are extended in our plan, and in our presentation.
If they would be extended, we normally would expect some additional business.
I think it was a steady development.
And you only see, basically, most of the numbers after the harvest.
You see it early in the year, because of the pre-season deals, and then you basically see it confirmed after the harvest.
And so, this is ---+ I think the European combine, or the German combine market, in special, was pretty stable for many years.
And now, automatically, this market is hit as well.
Pretty much in line.
We're working on new technologies, so that means, as soon as the market comes back, I think we will be in with better products, which is a good growth opportunity in the future.
So, our new combines will be launched around 2018, and so that means we want to grow market share, also, in that market.
One, I want to mention, when we talk about CapEx, this was not a coincidence.
So, we planned for lower CapEx for already quite some years, and so we could execute 2015.
So, the increase ---+.
Yes, the increase is mainly around product programs.
We are getting launched ---+ getting ready for our tier 3 product launches in South America, and then some other new products around our global series in China, and then various products around the world.
So, our flow of new products continues.
And just based on the scheduling and the timing, we think that we may need to spend a little more CapEx than we did this year.
In general, this is also a nice buffer, so I would not be surprised if [we reduce] this area to do slightly better.
Yes, when it comes to the Massey Ferguson global tractor ---+ you called it Centurion, which was the project name ---+ this project is pretty much completed when it comes to engineering, and to the factory layout and so on ---+ purchasing, and the whole process, as such.
When it comes to the execution in sales, this is, of course, an area where I see plenty of opportunity.
So, that means market introduction in major markets will be in 2016, and then we want to ramp up sales.
We have a certain windfall, which we did not put into the plan, because it's a ---+ not very stable situation anyhow.
But in our project plan, we had assumed the Chinese currency going up over time.
Now we see the opposite.
And when you talk to experts, it seems to be, let's say, the case, not ---+ there seems to be more, for a longer period of time.
So, that would create an additional sales opportunity.
So, it looks like as if our product from China might be much more competitive than we thought.
Yes, the next generation of our ---+ yes, the next potential, as we talked about in our December analyst meeting, is that we're working on platforms primarily on the high horsepower tractor side, that middle range.
It's somewhere between 150 and 250 horsepower.
So, we are trying to get that.
We're working on that from an engineering development standpoint.
Those products will be ready by probably 2018 or 2019, in accordance with the tier 5 implementation.
And then, as <UNK> mentioned, some new combines that we are working on also have an element of product platform, as well.
And so we are looking for those to be major margin improvement opportunities for the Company.
Steve, I think it would be, most probably, a good idea if we brought our expert to Wall Street in December to have a presentation on our platform projects, because I think this is very exciting for investors to know.
Good morning, <UNK>.
Yes, in terms of share gains in North America, where our focus is on some of the new products that we're introducing this year ---+ as <UNK> mentioned, we have our new global series, which is the new line of low horsepower tractors that we will be launching very soon in North America.
And so, we think that will be a big opportunity for us.
Other than that, we are looking for share opportunities on the professional producer segment, which is the high horsepower segment.
And that is around new products, but also the development of our distribution network, which we think is developing very well, and will give us some opportunities for growth in the future.
To be honest, I am not satisfied with the development.
So, we talk about share gains in North America for many years, but I don't think that we were really very successful, and that we saw a breakthrough.
And that is why I asked management to come to me with a strategy, and I want to see that being done faster.
Because in these difficult times, we need to focus not only on cost control and headcount reduction; you also need to look for growth opportunities.
And I think the share situation in North America is not to my satisfaction, and it's also the lowest, when you look into our global markets.
So, why do we have 40%, 50% in Brazil, and in some of the European markets, and around 10% or something in North America.
I don't accept that, and I want to see that being addressed.
No, the grain capacity ---+ as I said, there's a lot of old grain elevators around the country, so we have plenty of opportunities.
I think it is more the lack of liquidity, or the fact that farmers handle their business a little bit more careful right now.
And GSI grain drying technology is by far advanced, compared to any competitor globally.
No, I think the question is whether there is a difference between ---+ or let's say what the farm equipment growth only is, without GSI.
But that's a guess.
The outlook that we give on the sales being down 10% to 15% is on that market.
And overall, we are expecting our revenues to be down about 10% on [North America results] (multiple speakers).
And one could say it's somewhat equally spread between GSI and farm equipment, or is GSI doing slightly better.
GSI is flatter than the protein production.
Yes, I think that's what we said, also, at the beginning of the call.
