AGCO Corporation

Good day and welcome to the AGCO 2026 Q1 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. In consideration of time, please limit yourself to one question and one follow-up. To ask a question, You may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Greg Peterson, AGCO Head of Investor Relations. Please go ahead.

Thanks, and good morning. Welcome to those of you joining us for AGCO's first quarter of 2026 earnings forecast. We will refer to a slide presentation this morning that's posted on our website at www.agcocorp.com. The non-GAAP measures used in the slide presentation are reconciled to GAAP measures in the appendix of the presentation. We'll make forward-looking statements this morning, including statements about our strategic plans and initiatives, as well as their financial impacts. We'll address demand, product development, and capital expenditure plans and timing of those plans and our expectations concerning the costs and benefits of those plans and timing of those benefits. We'll also cover future revenue, crop production and farm income, production levels, price levels, margins, earnings, operating income, cash flow, engineering expense, tax rates, and other financial metrics. All of these forward-looking statements are subject to risks that could cause actual results to differ materially from those suggested by the statements. These risks are further described in the safe harbor included on slide two in the accompanying presentation. Actual results could differ materially from those suggested in these statements. Further information concerning these and other risks is included in ANCOS filings with the SEC, including its Form 10-K for the year ended December 31st, 2025, and subsequent Form 10-Q filings. ACCO disclaims any obligation to update any forward-looking statements except as required by law. We will make a replay of this call available on our corporate rep website later today. On the call with me this morning is Eric Hansodia, our Chairman, President, and Chief Executive Officer, as well as Damon Audia, Senior Vice President and Chief Financial Officer. With that, Eric, please go ahead.

Thank you, Greg, and good morning, everyone. AgCode delivered very solid results in the first quarter, reflecting effective execution against our strategy and the growing impact of the actions we've taken over the recent years to streamline our cost structure. Net sales are approximately $2.3 billion, up 14% year over year, driven primarily by stronger performance in EEM compared to the challenging prior year period. With differing industry conditions across regions, the year-over-year improvement highlights our ability to perform consistently and deliver solid results across varied demand environments. Operating income increased more than 60% year-over-year to $80.7 million, with reported operating margin expanding 100 basis points to 3.4%. On an adjusted basis, operating margin improved 50 basis points to 4.6%, driven by better volume leverage, and ongoing benefits from business optimization initiatives, partially offset by higher cost inputs, including tariffs. These results underscore the pragmatic, focused manner in which we are operating the business. Over the past two years, we have taken deliberate actions to simplify and focus our operations and sharpen execution, including a leaner cost structure, more disciplined production planning, and improved channel alignment. The performance delivered this quarter supports the increased durability and resilience of our earnings model. While near-term demand remains uneven across regions, we continue to believe the business is operating around the trough of the cycle, with inventories normalizing and underlying conditions beginning to set the stage for the next phase of recovery. Adjusted operating income increased nearly 30%, and adjusting EPS more than doubled year over year to 94 cents, highlighting the operating leverage inherent in the business from lower cycle levels, as well as a lower adjusted tax rate in the quarter. We also continue to emphasize structured working capital management and inventory alignment. Dealer inventories improved in the first quarter, positioning us in a more balanced position to support customers while maintaining better operational stability through the remainder of the year. We are encouraged by the progress delivered this quarter and remain fully focused on executing our plans to drive sustainable margin enhancement, cash generation, and long-term value creation. Slide four details industry unit retail sales by region for the first quarter. While fleet ages continue to increase, farmer purchasing activity reflects a measured and thoughtful approach shaped by the current macro environment. Trade policy dynamics, higher interest rates and input costs, tighter credit conditions, and currency volatility are influencing buying decisions globally, particularly for larger equipment. In North America, overall industry tractor volumes trended lower relative to the prior year. with the most pronounced weakness in higher horsepower tractors. Farmers continue to defend more capital-intensive purchases amid current farmer economics, involving grain export demand and elevated input costs. In Western Europe, industry tractor sales increased compared to softer prior year period, with growth across most of Western European markets. Combined demand, however, remained cautious as farmers waived financing conditions and capital allocation decisions. In Brazil, industry retail demand moderated across both tractors and combines, with larger equipment most affected by higher interest rates, credit availability, and currency effects, while demand for smaller and mid-sized equipment remained relatively more resilient. Against the evolving macro backdrop, farmer purchasing decisions remained deliberate, with customers balancing operational requirements alongside financing costs and broader economic conditions. Investment activity continues to prioritize solutions that deliver clear productivity gains and cost benefits, including precision agriculture and technology upgrades, while larger equipment replacement decisions are sequenced thoughtfully. This environment continues to support disciplined production planning and inventory alignment across the industry. ECHO's factory production hours are shown on slide 5. First quarter production hours increased 15% year-over-year, reflecting a low level of production in the first quarter of 2025. The year-over-year increase was driven primarily by Europe, where production levels rebounded from our particularly reduced first quarter 2025 base. Importantly, first quarter 2026 production was aligned with our operating plan and reflected intentional timing and product mix, rather than a change in underlying demand trends. Full year 2026 production hours are still planned to be broadly flat to modestly lower than 2025. We are executing a deliberate and measured step down in production as the year progresses. This approach reflects our continued focus on inventory optimization in North America and Latin America, active support of dealer destocking, and close alignment of output with end market demand. Turning to regional inventories. In Europe, dealer inventory months of supply improved modestly to just under four months, aligned with our target. This reflects effective execution across the channel, with Fendt operating below the regional average and Massey Ferguson Vulture modestly above. This well-balanced position provides operational flexibility across product categories and supports continued focus on margin quality and mix optimization in our largest and most profitable region. In Latin America, dealer inventories moved to four months of supply from five months at year end, continuing progress toward our three-month target. Dealer inventory units declined approximately 10% during the quarter, reflecting disciplined coordination of shipments and production with a slightly softer industry outlook. In North America, dealer inventories closed the quarter at approximately seven months of supply, consistent with our year-end levels and slightly above our six-month target. Large egg units decreased sequentially, but were offset by the normal increase in the low horsepower segment this quarter in anticipation of the spring retail selling season. Production continues to be managed intentionally, with a clear priority on channel health and long-term stability. Slide six highlights our strategy to outpace the market and drive margin improvement to our adjusted operating margin target of 14 to 15% at mid-cycle over time. What is increasingly evident is that AGCO is delivering stronger and more resilient financial outcomes across a range of demand conditions compared to prior cycles. The structural actions implemented over recent years are translating into a more durable margins, improved earning stability, and higher quality cash generation, demonstrating the effectiveness of our evolved operating model. Our three growth levers, high margin products, technology driven differentiation, and a growing higher value aftermarket business continue to provide meaningful support in the current environment. Each lever contributes distinct value and together they reinforce a business model that is less reliant on unit volumes and more centered on value creation. This foundation underpins our ability to consistently deliver mid-cycle adjusted operating margins in the 14% to 15% range over time. It reflects a structurally improved AGCO, more focused on higher value revenue streams, more disciplined on costs and investment, and increasingly driven by technology solutions and services. Importantly, this operating model also supports strong cash generation. with free cash flow conversions of approximately 75% to 100% through the cycle. That financial flexibility enables continuous investment in innovation and business advancement while supporting capital returns to shareholders, as evidenced by our recent increased dividend and share repurchase announcements. Taken together, these elements highlight why AGCO is operating today from a more favorable and resilient position, And why are businesses well positioned to deliver consistent performance across future market cycles? Turning to slide seven, we are seeing a series of tangible strategy wins as we execute against our farmers' first priorities. These actions demonstrate how we are building a durable competitive advantage by combining engineering leadership with increasingly advanced digital and enabled capabilities. Our approach reflects a focus on prioritizing growth while also delivering efficiency as we apply AI where it delivers measurable value for farmers and strengthens business performance through better decisions and execution. AI is increasingly becoming a significant enabler in that roadmap and across the organization to support long-term value creation and differentiation. AI solutions on the farm and in our products are designed to help farmers to achieve more with fewer inputs, such as land, labor, fuel, and chemicals. Solutions including Symphony Vision use intelligent cameras intended to optimize precision application in real time, improving effectiveness and helping to reduce waste. At our PTX Winter Conference, we introduced AI-enabled innovations, including Symphony Vision Dual, and ArrowTube to advance real-time precision application and automated seed placement. These innovations reinforce our position in high-value, technology-enabled solutions. We use AI in customer support and service to connect machine data, customer needs, and agco expertise to reduce downtime and strengthen long-term customer relationships. It is transforming how we work with thousands of parts leads generated for dealers, and tools like product information assistant to more closely connect dealers and farmers. And third, AI inside AGCO is improving efficiency, quality, cost, and speed. Use cases range from AI-powered financial forecasting to AI-driven market analytics that automate used equipment price analysis and free up experts to focus on more value-driven actions. These capabilities are being deployed in a structured and purposeful manner to support margin expansion, and growth. We are seeing strong and growing demand from our employees to leverage and deploy innovative AI solutions to better support our dealers and farmers. We view this momentum, along with our project reimagined run rate cost savings, as a clear opportunity to drive measurable efficiency gains and productivity improvements across the organization over time. In short, we are taking an enterprise view with AI using human-in-the-loop oversight and aligning with evolving regulatory frameworks to support trusted, responsible, and scalable usage. On slide eight, we also continued to see strong external validation of our innovation and technology leadership. Our outrun mixed fleet retrofit technology earned the prestigious Davidson Prize for the second consecutive year. this time for autonomous tillage, reflecting our step-by-step progress toward our ambition for full farm autonomy by 2030. Our Agco parts shop received the Digital Engineering Award for a next-generation unified B2B platform that improves dealer efficiency, order accuracy, and visibility at scale, which supports aftermarket growth and reinforces our farmer-first focus on uptime. Agco Power's Core 80 was named Diesel Engine of the Year, reinforcing our continued leadership in efficient powertrain innovation. The family of core engines were designed to run on an array of fuel options, helping them deliver the performance our farmers demand around the world. I want to recognize and thank the teams across Agco whose work continues to set a high bar for our industry. With that, I'll turn it over to Damon to walk through the financial results for the quarter.