CNH Industrial

good day and welcome to cnh conference call today call has been recorded at this time i will now turn the call over to jason omeza please go ahead sir thank you alan good morning and good afternoon to everyone we would like to welcome you to the webcast and conference call for cnh industrials third quarter results for the period ending september 30th 2022. this call is copyrighted by cnh industrial And any other use, recording, or transmission of any portion of this broadcast without the express written consent of CNH Industrial is strictly prohibited. Hosting today's call are CNH Industrial CEO, Scott Wine, and CFO, Adone Nchiza. They will use the material available for download from the CNH Industrial website. Please note that any forward-looking statements that we might be making during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement included in the presentation material. Additional information pertaining to factors that could cause actual results to differ materially is contained in the company's most recent Report 20F and EU Annual Report, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission and the equivalent authorities in the Netherlands and Italy. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP financial measures, is included in the presentation material. I will now turn the call over to Scott.

Thank you, Jason, and thanks, everyone, for joining the call.

It's actually better now that I have my mic turned on. It's not lost on me that we are hosting this call on Election Day in the United States. following similar activities and some appointments in other countries that impact our business. This is relevant to the outstanding results we will discuss this morning in that the CNH team is proving its capabilities to successfully navigate a myriad of complex challenges. We are not immune from the external impact of geopolitical risks, inflation, supply chain constraints, and economic downturns, but the strength of both the global ag markets and our team, technology, products, and brands are nice assets to have right now. We finished the quarter with record consolidated revenues for any third quarter in the history of our ag and construction business of $5.9 billion, up 29% in constant currency. While we are finally seeing some modest improvement in our supply chain, it is our team's deft execution that enables these results in the face of unrelenting inflation and volatile currencies. We are confident in our ability to continue to minimize these disruptions, maintain our momentum, and deliver for our customers. Trends still indicate a strong ag cycle with sustained demand for most products. We are closely watching for any recession-related shifts in purchasing behavior. I will again stress that historically our business performance is driven more by the ag cycle than by GDP growth or lack thereof. In any case, we will be prepared to traverse whatever the macro environment throws at us. Both agriculture and construction generated positive volume and mix and pricing of 16% more than offset the steep increase in production costs. Additionally, gross margins benefited from the operational improvements. It was very encouraging to see our teams using Kaizen to streamline sales and operations planning process and reduce expedited freight costs. These drivers and other actions contributed to the ag segment's record 25% gross margin in the quarter. We generated positive free cash flow, which is notable considering the seasonality has historically led to cash consumption in the third quarter. We saw modest improvement in the supply chain compared to what we experienced in the first two quarters of the year. However, uncertainties about cost structure again forced us to restrict order windows, both to enhance our ability to deliver on time to our dealers and customers and to sustain a balanced price cost equation. We introduced the new Trident spreader enabled with Raven autonomy in August, which I'll provide more color on in a minute. With the addition of Raven to our tech stack, we are making tremendous progress marrying our great iron with great technology. Thanks to the strength of our year to date performance and what we see for the remainder of the fourth quarter, we are improving our guidance for the full year and renewing our commitment to maintaining expenses at industry leading levels while investing heavily in our future. Derek Nielsen and his agriculture team delivered another impressive quarter with net sales up 32% year over year at constant currency. and year-over-year EBIT margins increasing 320 basis points. This was mainly driven by improving volume and strong price realization, which more than offset raw material and production cost headwinds. Overall, ag demand remains robust, especially in Latin America and North America regions. Order books for tractors and combines are down versus last year, but that is primarily due to continued allocation of dealer orders and limited order windows. Our strategic focus on technology leadership and customer-inspired innovation was showcased in several of our third quarter agricultural product launches. Demonstrating our integration with Raven, at Farm Progress we launched the Case IH Traden 5550 applicator with Raven Autonomy, the industry's first driverless spreader. This best-in-class combination applicator makes level four supervised autonomy more accessible. bridging the gap between traditional iron and multipurpose driverless power platforms. Prague Garg is doing an excellent job of ensuring that C&H and Raven teams are fully linked in development of cutting-edge solutions to farmer problems. This synergy enabled Raven to take the technology and experience from their omnipower driverless platform and apply it to our traditional equipment lineup. With all elements of our tech stack working in concert, it's fundamentally simpler for our team to develop and support autonomous solutions. New Holland redesigned its lineup of Guardian front boom sprayers to feature new technological and precision capabilities. These sprayers integrate Raven's advanced precision technologies like guidance and steering, nozzle control, and complete operational connectivity with New Holland's trademark high horsepower and large tanks. Our suite of technology accumulates the data and processes it through Raven's connected workflow system to increase efficiency through better equipment utilization and more acre spread per day. On the specialty product side, Case IH launched the Allstaff Series 9000 line of sugarcane harvesters with new automated hydraulics, connectivity, high performance, and best-in-class efficiency. Having recently been down to visit with farmers and our team in Brazil, I can say firsthand that our harvesting portfolio is second to none. What you see here is the acceleration of our best-in-class precision agriculture capabilities, both in terms of developing a new era of products and improving our ability to expand margins and capture market share. Stefano Pompiloni and our construction team continue to perform at elevated levels. With sharp focus on customer-inspired innovation, operational excellence, and dealer engagement, the team is effectively building a platform for profitable growth. In the quarter, net sales increased 20% on a constant currency basis over 2021, with pricing offsetting higher production costs. Adjusted EBIT in the quarter was $24 million, with a 2.7% EBIT margin, benefiting from strong sales in North America and considerable contributions from Samparana acquisition, but is still constrained by supply chain disruptions. Construction order books are open through the second quarter of 2023 in most markets with robust order coverage, especially in North and South America. In the third quarter, we started selling Semperana mini excavators in Europe under the Case and New Holland brands, and we opened a new assembly line to increase capacity for those products. With this greater throughput, we will begin exporting those products to other regions next year. During last quarter's call, I teased the launch of the Case Minotaur Compact Dozer Loader, and that revolutionary new product has been enthusiastically received by our dealers. I will now turn the call over to Adonay to take us through some of the financial results.