Scott Wine: Yes. Well, again, we had some benefit in the first quarter compared to the year before that didn’t have the Burlington cost in there. So that’s part of the reason we’re not guiding it. we do expect that pricing pressure will be greater in construction than it is in ag. So we’re going to have to fight that battle to the extent we can. But you cannot talk about construction and I look at – the portfolio expansion is helping drive both sales and margin. The relocation of production to low-cost regions has helped driving it. And Stefano and his team have done a really good job of improving quality. And all of those things contribute to margin, but we don’t expect everything. And again, as we go throughout the year, the compare gets more difficult.
So we feel like it’s prudent right now. And again, you see it in the other – our peers in construction, it’s been a robust market but it’s not going to get more robust throughout the year. If anything it’s going to get less, and we’re just prepared to that.
Tami Zakaria: Got it, that’s fair. Okay, thank you.
Operator: Your next question comes from Angel Castillo with Morgan Stanley. Please go ahead.
Angel Castillo: Thanks for taking my question. Just wanted to maybe stick to the cost kind of conversation a little bit more. You talked about earlier, just kind of remaining cost focus even beyond the programs that you’ve kind of laid out. So given you’ve already done so much to improve operations, you mentioned again some of the changes you made in your cost structure, what kind of levers do you foresee or left to continue to pull beyond this to continue to improve that? That aren’t kind of contemplated already in your cost initiatives.
Scott Wine: Yes. Well, first of all, we talked about kind of putting a bow on this overall SG&A restructuring. At some point, you got to stop having anxiety amongst the team. And I think we’re going to close that out in the second quarter. So the team can move on to different things when I leave it, that restructuring will have been effective and will be over with. But what doesn’t stop is the work with CBS and our lean initiatives in the plant, that just gets better and better every week, every month, every quarter and every year. And that is building momentum throughout the organization. Our strategic sourcing program, it’s – I’m so impressed with the work the team has done but it is a slow buildup as we resource things where we need to, we implement new suppliers, integrate them into the machine.
So that is one that builds over time. And then what Oddone has been leading is almost a zero-based budgeting exercise. It’s just a fundamental focus on cost in everything we do. And I think those three levers will put us in a position that we can continue to drive margin expansion well into the future.
Angel Castillo: That’s very helpful. Thank you. And sorry to keep going back to this, but I just – I’m still a little bit confused as to the construction outlook. So you talked about, I guess, kind of the Burlington impact and some of the onetime items on the margin side. But I think you talked about kind of an industry unit performance, at least in North America for heavy construction equipment that has improved to now kind of minus 5% to flat. How do we square that with your comment that pricing in this industry is probably tougher just given that it seems like the industry demand seems to be improving? So maybe any kind of help you can kind of give to kind of bridge that as well as any incremental color on retail sales and what you’re seeing and maybe what’s driving some of that heavy improvement for the year?
Oddone Incisa: Well, I would say two things. One, the residential outlook in North America is not clear at this point. And with the latest news on the interest rates and all the rest, we are sort of prudent there. Secondly, our ability to maintain pricing, as Scott mentioned before, in construction is very much subject to the fluctuations of the overall market. If construction is a very competitive market, many players there, many players coming from overseas as well, not that much – not that much in North America, but in the other regions, we have competition from the Far East, which is quite intense and on pricing. And so our prudence in construction is on the pricing line, I would say.
Angel Castillo: That’s very helpful. Thank you. Scott, wish you all the best.
Scott Wine: Thank you.
Operator: Your final question comes from Michael Feniger with Bank of America. Please go ahead.
Michael Feniger: Hey, everyone. Thanks for adding me. Scott, you were more cautious on the ag cycle getting seen each in a better position for the downturn kind of became clear. Just where we stand today, 450 corn, rates potentially staying higher for longer. If there’s no significant change within some of these variables, is it tough to grow on that in 2025? I’m just curious what you feel like at least your key customer, the puts and takes there that we should be kind of keeping our eye on as you’re trying to position the company for 2025, leaving in a good place. Thank you.
Scott Wine: Well, I’ve tried – obviously, coming into this business, there was a lot to learn. But if I learned anything, it’s not to comment or opine on the ag cycle. So you’re not going to trap me into saying something about 2025 on this call.
Michael Feniger: Fair enough, Scott. And then just one of the – we talked a lot about margins and there’s some commentary on market share. I’m just curious, beyond 2024, just – what are the regions and product groups where you see the best line of sight to gain that share? Is it new product introductions, what you guys are doing on Raven? Do you feel like that ball is already going? Or is there some more levers that need to be pulled to really drive market share higher than maybe it was when you started and came to the company a few years ago? Thank you.
