CNH Industrial

Ladies and gentlemen, thank you for standing by. Today's call will begin momentarily. Thank you. Ladies and gentlemen, thank you for standing by. The CMH 2024 Q1 results conference call will begin in a few moments. Ladies and gentlemen, thank you for standing by. Good morning and welcome to the CNH first quarter 2024 results conference call. Please note that today's call is being recorded. At this time, all participants are now in a listen only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. To withdraw your question, press star one a second time. Thank you. I will now turn the call over to Jason Omerza, Vice President of Investor Relations. Please go ahead.

Thank you, Brianna. Good morning, everyone, and we apologize for the delay. We'd like to welcome you to the webcast and conference call for C&H Industrials' first quarter results for the period ending March 31st, 2024. This call is being broadcast live on our website and is copyrighted by C&H. Any other used recording or transmission of any portion of this broadcast without the express written consent of C&H is strictly prohibited. Hosting today's call are C&H CEO Scott Wine and CFO Adone Nchiza. They will use the material available for download from the C&H website. Please note that any forward-looking statements that we might make during today's call are subject to the risks and uncertainties mentioned in the Safe Harbor Statement, including 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 annual report on Form 10-K. as well as other periodic reports and filings with the U.S. Securities and Exchange Commission. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP measures, is included in the presentation material. I will now turn the call over to Scott.

Thank you, Jason, and thanks, everyone, for joining our call. Before we review the quarter, I would like to address my upcoming departure from C&H. First, I want to sincerely thank the team here for delivering three straight years of record sales and profitability and our notable transformation into a customer-focused, technology-forward culture. I am proud of the team's accomplishments, especially the acceleration of our tech development, the successful deployment of CBS and strategic sourcing to drive operational efficiencies, and improving our through cycle margins, which will surely be a key topic of our discussions today. I have full confidence in our strategy and our ability to achieve it, even with slowing market demand. We were early to get after productivity, our cost reduction targets are achievable, and we are on track to deliver them. Our tech insourcing work is progressing, and we have a line of sight to execute everything we set out to do. I believe in the team's ability to continue delivering margin expansion while outselling our peers. Simply put, the business is solid. My reasons for leaving are personal and have nothing to do with the ag cycle, our strategy, or CNH's bright future. As of July 1st, Garrett Marks will rejoin CNH as the new CEO. Garrett and I have worked closely together when he ran commercial vehicles for CNH, and he has been CEO of Aveco since its spinoff in early 2022. He's a proven leader, he has my full support, and I am confident he will do well here. Now, on to our quarterly results. We said the first quarter would be challenging from a demand perspective, and that is how it played out, especially in South America and Europe. We also noted competitive pricing pressure where dealers are working hard to reduce their inventories. Nonetheless, we maintain much of our pricing and profitability gains, with construction even increasing both their absolute profit level and their margin percentage year over year. Cost efficiency remains a priority for us in this environment. We were ahead of the curve on instituting hard but necessary programs, such as our SG&A restructuring, to respond to the realities of operating in a cyclical downturn. We will build on the cost reductions already implemented, and those savings will compound throughout the remainder of the year. And we continue to advance our tech stack, expanding our team and integrating solutions from our acquisitions effectively into our business. We announced exciting developments in satellite connectivity and off-board management earlier this week, and we will continue to leverage innovation as a competitive advantage. In line with our expectations, first quarter consolidated revenues were down 10%, and industrial net sales were down 14% as the industry adjusts to even lower demand and to dealer inventory levels. We proactively addressed South America dealer inventory last year and furthered those efforts in the quarter. Industrial event margin was just under 10%, down 180 basis points compared to last year. Despite the lower shipments, decremental margins were in the mid-20s, reflecting the positive price realization and cost reductions. Competitive pricing pressure was the most acute in South America, but the team there is doing a great job managing the situation and keeping our operations profitable. Adjusted EPS was 33 cents, down just two cents from a year ago. Throughout the quarter and across all regions, we saw decreased demand in the end markets. However, our retail deliveries in the quarter outperformed the overall market. Despite production cuts in the quarter, we did not make our desired reductions in dealer inventories, so we still have work to do. We continue to lean out and simplify our organization. We completed the first phase of our restructuring program in Q1, and further actions, such as combining and rationalizing our commercial back office operations, are on track. We plan to conclude the restructuring program in Q2, but not our focus on cost. Derek Nielsen and his agriculture team continued to execute in the quarter, achieving favorable price realization despite lower demand by working with our dealer partners on effective sales programs. Construction gross margins and EBIT margins were both up 150 basis points in the quarter. Although volume and mix were a challenge, particularly in Europe, Stefano Pompiloni and his teams' focus on quality and cost efficiency continues to support improving profitability. Our financial services business delivered strong results. Their net income grew on larger receivable balances, and despite some increases in delinquencies, we have a very strong credit portfolio. As we look at our strategic priorities, I want to start with some recent developments on the tech side. Our obsessive focus on customer-centric development has shown us the importance of being the easiest to use OEM. This week, we introduced FieldOps, our brand new web and mobile digital app. FieldOps will lead the industry in usability and intuitive design. Everything farmers need to run their operations will be at their fingertips with a dramatically improved look and feel. The FieldOps interface simplifies farm management and makes data accessible from anywhere, all with fewer clicks to accomplish every task. It also streamlines our internal workflows as our universal approach to tech development means there is one single app for all customers. The FieldOps web and mobile apps launch in June, and the overall customer experience is already garnering rave reviews from our beta testers. This week, we also announced our collaboration with Intelsat, which brings multi-orbit satellite connectivity to more of our customers' machines so they can access our full suite of precision offerings from remote locations. We have been judicious in our approach to connecting soil to space. We needed a partner with technology that would work in farm-severe operating environments. Intelsat's antennas have been proven in critical applications and inhospitable conditions, so we can bring them to market quickly with confidence they will perform. We also serve customers in areas where low-orbit satellites do not consistently reach. Intelsat's multi-orbit constellation of satellites provides greater coverage with a stronger connection. Becoming a more productive company is a key part of our strategy, and successfully executing our cost reduction program plays an important role. We continue to drive production cost savings through procurement, logistics, and manufacturing efficiencies. Some of those savings are held on the balance sheet at the quarter end as we build inventory for the coming season, but we are confident in our full-year targets. The absolute dollar impact of these savings is somewhat contingent upon production levels, which we will adjust as industry man necessitates. As mentioned earlier, First phase of our restructuring program has been implemented and we have imposed strict discipline on our discretionary spending. We are already working on additional projects, such as expanding support operations in low-cost countries. I will now turn the call over to Adonay to take us through the financial results.