So, keep moving here in room three. So we're gonna kick off the AGCO session here, and I'm Stephen Volkmann with Jefferies. I cover AGCO here, in case I haven't met anybody, but very pleased to welcome AGCO management. We're gonna start with Eric Hansotia, which is, we might as well start at the top, with the CEO. We do have Damon, the CFO, who will be along momentarily if there's any questions about details of numbers. But Eric, thanks so much for joining us. We're gonna do this as kind of a fireside chat, but would love to have any questions from the field as well. But let's just start off. I think you guys, I'm hearing that you guys made some comments yesterday, sort of updating kind of your feel for the markets. So maybe you'd be kind enough to just do that for us as well. Sure, yeah. So welcome, everybody. Thanks for your participation. You know, just as a reminder, AGCO is a company that... We're the largest pure play farm machinery company in the world. All we do is sell farm machinery to our clients all over the world. About half our business is in Europe, 25% in North America, and then the balance is spread between South America and Asia. We've been focused largely on shifting from a machinery-oriented focus to much more of a technology-enabled focus. We redesigned our strategy 2-3 years ago, and in there were 2-3 key elements. The first one was becoming the most farmer-focused company in the industry. And you say, "Well, aren't all your competitors farmer focused, and weren't you before that?" No, I'd say we were mostly product focused, and the difference there is, when you show up to the farmer, instead of saying, "Hey, tell me about your tractor. What do you like about your tractor?" You say, "Tell me about your business. What's going on in your business? What are your pain points?" And that shift has really allowed us to get closer to our farmers, accelerate our innovation, and really think beyond the product. So that was the first focus. Second focus was on smart machine development, machines that can sense their environment and optimize their own performance based on onboard calculations. And the third one is thinking differently about distribution. It's a very brick-and-mortar business today, and we aim to convert to, or lead, the transition to digital, a direct connection to farmers, serving them the way they want to be served. Now, the question you asked is: How is the market playing against that strategy? We've had a couple good years, and we still continue to have very strong tailwinds for our demand. We just opened up our order window in South America for Massey Ferguson brand, and we filled up 90% of the orders in two days. We've got our seasonal ordering in North America for seasonal products. We have early order program, and we're sold out for model year 2024 on all of them, sprayers, planters, track tractors, things like that. And then for tractors that are just kind of a normal ordering, we're well into 2024. So why is that? It's largely because there's not enough grain in the world, and prices for grain are still high, while input costs for the farmer, like fuel and fertilizer, are coming down. So there's good profitability. So right now, we're still enjoying good demand, and we see biofuels as one of the new demand generators for the future that we feel is a nice tailwind that should keep that demand strong into the future. The one product you didn't mention was combines. Anything to add on the combines? Combines is even stronger than anything else, especially in North America, to some extent, Europe. Combines are up even more than tractors, and so very good, good, combine market. We're completely sold out this year and expect to be sold out again next year for combines. Okay, great. There's some concern around inventories, both new and used. Can you just comment on what you're seeing there? Yeah. So there's essentially two segments to the market. There's small ag and large ag. Small ag had a big demand surge during COVID. That's the smaller horsepower tractors that maybe you and I would buy when, during COVID, when we wanted to buy items instead, 'cause we couldn't buy services. Toys. Buy toys, exactly. And so that, that has cooled off and, and, you know, it's, it's kind of flattened out. The inventory for those products is at target, and in some cases, maybe even a little bit above target, so we're kind of managing that. But large ag, we still feel quite good about. We're under target in most of our regions. Fendt is our very premium brand, the best product line in the marketplace, kind of the Mercedes. It's better than any other brand, in, in any part of the world. Its home was Europe, and we're still probably only about half of the channel fill that we would like. We're at two months, and we'd probably like more like four months. In North America, used equipment is about half of what it was prior to COVID, and our large ag is still well below, several months below what we had before COVID. So inventory, we still feel there's strong demand, our channel is lean, and we still feel like there's opportunity to get it up, actually, to be healthier. So historically, there's been sort of a certain amount of discounting with all products, like cars and tractors, and that largely went away during the COVID bubble. But things are sort of starting to normalize again. So how long until we kind of get back to that sort of level of discounting that we would consider normal? My hunch is it's gonna be in the 2024 time horizon. So historically, we've been able to largely price slightly above cost, and that's usually been in the 2%-4% range. As inflation's been about that, we've been able to price just a little bit more than that. During COVID and the inflationary boom that came with it, our costs went up significantly. Now, luckily, we were able to put price in to cover all of that, plus a little. So we were price cost positive throughout the entire COVID period. We were up to 13% pricing last year. Now that's coming down. We're gonna lap some of those price increases. It's gonna probably settle back into normal. We haven't projected forecast for next year pricing, but some of our competitors have in that 3%-4% range. We don't disagree with that. We think that's a logical number. Would your view be that that 3%-4%, assuming that was the number, would that be slightly above cost? Yes. We fully expect this year and next year to still stay price cost positive. That would include discounting in that sort of- That's net price. Right. Yeah. Okay. Good. Okay, so you guys have been gaining market share. That's been sort of part of your plan for the last several years, and you've been successfully doing that. So maybe give us sort of the key drivers of the market share gains that you've seen. Yeah. Just as a reminder about AGCO, there's something that's very, very different about us than the rest of the market, and that is, the part that's the same is that we build tractors, combines, planters, sprayers, big machines, selling them to our customers, as a new machine, much like you think of an automotive environment. So in that area... But let me set the framework first. So we've got that business, and then in parallel to that, we've got this technology retrofit business. So the new technologies that we're developing from our engineers often go to market first through this retrofit channel. And what does retrofit mean for us? It means something different than if you hear that term from other companies. It means that we'll take a module, a technology module, for, let's say, a, a planter, that will add a new capability, and we'll sell it on any brand of equipment, a Case planter, a John Deere planter, an AGCO planter, a Kinze planter. Same thing for sprayers, same thing for combines. We will upgrade all of the existing fleet out in the marketplace. That ties to our strategy. Most farmer-focused company. We want to serve all farmers, not just AGCO farmers. We want to help them improve their performance. That's been growing at... Last year, it grew over 30%, year-to-date, 23%. We say, you know, big picture, 15%-20% is what you can count on. So it's eating into the marketplace as a retrofit solution that's kind of unique. It's different. That one's growing and continues to grow. It's high-margin business. It's one of our three growth drivers that we talk about. The second growth driver is our Fendt business. I talked about that. That's this very premium product line. It used to be primarily in Europe. Now we redesigned it such that it can be brought to North America and South America, and Australia, and New Zealand as well, and now fits the farming practices here. It is the best of the best product, and we're, and we're marrying that up with the best of the best dealer support. We've got the best package of Gold Star, bumper-to-bumper, 3-year coverage of all maintenance and warranty. Nobody else offers that. So you've got the best product performance, you've got the best support, and we're only allowing dealers to qualify location by location. So one dealer may have 15 or 20 stores. They have to come in one location at a time. There's no dealers that have all their stores qualified to be Fendt. You have to have the top performance and meet the top criteria. That one's growing. We doubled our business in the first two years. We're gonna double it again in the next three or four. We've gone from 40% market coverage with our dealers about five years ago to about 75% now in North America. We were zero coverage in South America, and we're about 75% now. Next two or three years, we expect to get to 90%-95% coverage. For the deals we put in place, none of them have hit their market share targets yet because we've been starving them with product. We haven't been able to build what the market's demanding. So as we now pull out of the supply chain constraint, we expect to feed that Fendt demand, add more dealers to it to create more demand, and that continues to be a nice growth engine. So where do you think those market shares could go ultimately? I mean, I think they're, what, low 20s in Europe? Where do they go in North America and South America? That would be a nice target globally. So we started off near zero, and, you know, we have aspirations to be a significant player in all the major regions, and those kinds of numbers are not far off, so. Great. So, you've also, I think, redesigned your combines product fairly significantly. Yes. Is that... Where, where can that go over time? Same kind of target. We expect each large ag product, planters, sprayers, combines, tractors, to all participate and be a partner to our customers in about that kind of market share range. Okay, great. Yeah. And then in your opening comments, you also talked about sort of distribution consolidation, I think. Maybe I'm putting that word in your mouth, but give us a sense of what you've done more broadly with the distribution network and where that needs to go. Over the last several years, we're really proud of what we've done with the product. We've now got the best product for sure AGCO's ever had, and many of our dealers say, and the market says, "This is the best product in the marketplace." So I feel very strong about that. That's now given us the opportunity, maybe even say leverage, to be able to really strengthen our dealer network. We've got more dealer change happening now than any time in the history of the company. And one of the big carrots is this Fendt product line. Dealers are knocking down our doors to be able to represent Fendt in the marketplace. They know it's a winner for customers, and it's profitable for the dealership. So that's... That, along with the overall product line, gives us many more people. There's actually new entrants, financial parties, and so on. So there's a lot more demand for our product line. We're consolidating our dealer network on the one hand, but then we're trying to play the game differently also. So there's a traditional consolidation, make them bigger, make them stronger, make them higher performing. That's one topic. The other topic is convert to digital. So the notion here is, instead of driving all the all the activity into the dealership and that, that store, that brick-and-mortar store, you think of that as like driving the demand into the mall.... We want to think more like Amazon. Allow the customer consume their information digitally, interact digitally, order digitally, set up service digitally, and then the activity comes to the farm. The product comes directly to the farm, the service comes directly to the farm. We remotely monitor all of the machines. We can say, "Hey, I see that you're coming up on a 500-hour service interval. I see it's gonna rain next Tuesday. How about I come take care of it for you?" Great! It's just happening, and it comes to them. It's not on the farmer to go to the dealership, it's on the dealership to go to the farmer. It's a 180-degree reversal of how this industry has worked in its entire existence, and so we're wanting to lead with that. We've got our. We've bought a set of company-owned dealers, and we've grown. We've tripled the market share in the last two years, and on pace to be a very sizable, perhaps our largest dealer in North America- Great. Using that model. I think the dealership model is a little different for the Precision Planting product. Yeah. Maybe describe that? So that's the other thing that makes the secret sauce of retrofit not only different, but hard to, hard to emulate, hard to copy. So we've got our OEM distribution channel, where we sell our big tractors, combine sprayers, and so on, and it's similar to what the other channels look like, and that's, and we're trying to update it relative to what I talked about, consolidation and shift to digital. But then we have a second parallel, independent dealer network that's very different. It's much smaller footprint, and the background of those people, they're not big machinery people. They're oftentimes agronomists or seed salespeople or something like that. They know the agronomy of the plant. They know the economics of the farmer. They may not know anything about a transmission, or how to overhaul an engine, but what they do is they go out to the farmers, and they teach them. They say, "Let me just look at your stand of corn or your soybeans, and let me talk to you about what I see here. I see spacing issues, I see depth issues, I see fertility issues. I see all these kinds of issues. Let's talk about the root cause of that." Digging up some plant. "Here's what caused that issue. Now, I have a solution for you in terms of a module you can put on your existing planter if you want, to eliminate that issue." So that whole channel works directly with farmers of all brands of equipment, very agronomic focused, very economic focused, with the farmer, teaching them about problems and teaching them about solutions. So it's the only channel like that in the marketplace. Do you have any data that suggests that once somebody sort of retrofits and gets involved with you, that pulls through bigger equipment sales over time? It's a common thing where right now, that channel is brand agnostic. They don't have AGCO on their shirt or on their business card. They are Precision Planting. They want to support and be trusted by all brands. But once the farmer has the technology on their machine, so let's just use the planter because that's the history of that business. They now have all of those new technology modules on the planter, and it could have been that they bought a planter five or seven years ago. They want to upgrade it now. They upgrade it with a Precision Planting set of modules. Now, five years later, they want to buy a new planter, and they think, "Well, you know, I really like what I've got here now in this terms of this new tech. I think it's better than anything else in the market, but I'd like to get a new one from the factory. I don't have to do all this retrofit activity. Well, now I can go buy a brand-new one from AGCO, where it just comes turnkey with all of that new technology loaded right from the factory, and it shows right up on my farm. So we see that we don't inject it at the sale, but it's a natural offshoot of getting them comfortable with the technology, the user interface in the cab, the remote data interface. All of those things are something you kind of get used to, and they get sticky, and then they can buy the whole bit next time. Great. So as you sell more... Well, actually, let me back up. I think you said that the margins on Precision Planting are sort of similar to aftermarket margins in general. That's right. But as you start to sort of mix that business a little more toward OE, is that a margin headwind? No, we keep those two businesses separate. So the OE sale would be a planter sale in our whole goods business. And, you know, it may be, depending on the product, it will make less margin typically than just the retrofit, because essentially, you're capturing technology like so, margins and not having the low margin frame and hydraulics and things like that. You're just capturing the high value, high margin piece. So it's always probably gonna be a little higher margin. It's also where the cutting edge technology is, so you can price more on the front end of innovation. But we feel it's a nice feeder that you get the market. The first two or three years of a new product come out in the retrofit channel. Once it stabilizes, you bring it over to the OEM channel, and you get the secondary sale through OEM. That's how we're trying to have those two marry up. Okay, great. So let's talk a little bit more about precision agriculture, generally. You know, you mentioned the planter that can vary, you know, depth and spacing and so forth. You know, what's next, and then what's next, and where are we ultimately going? There's so much opportunity here. It gets all of our teams super excited. Planting, we are the best planter experts in the world, bar none, and there's really not an argument on that. We're now moved into spraying, where we take the same mentality of retrofitted technology module onto an existing machine of any brand. We launched that last year, and it's this notion of targeted spraying, where you have vision cameras that can look into the field through an artificial intelligence library, identify the difference between a plant and a weed, understand what kind of weed it is, and spray just the weed. Sprayers all around the world in farming today spray the entire field, every square inch, whether there's a weed there or not, because they want to just make sure they caught the weed, and there's no other way to do it. Now that you have an intelligence system, you can spray only the weeds and save, depending on how dense the weeds are, 70% of the chemical.... That's where we're going next on, in terms of sprayer efficiency, technology, and sustainability. We've also announced last year a complete redesign of the soil sampling area, where soil sampling has been the same for about 100 years. You go in and manually take a probe of soil, put it into a bag, send it off to a lab. 2-3 weeks later, you get the results back. In the early days, we took the exact same soil, sent it off to multiple labs, and got a variation of up to 20%. So the process is very long, it's expensive, and it's got a lot of variability into it. Those are all ripe then for reinnovation or re-engineering. So the team built from beginning to end, an entire new process. We have built an automated soil lab, and we sell the lab to the market now. So you go into the field, you take the sample. That sample cartridge is geo-stamped with where exactly the location where it came from. You carry it into a container, you feed it into the soil lab, then, in the afternoon. The soil lab goes through all the 27 steps right there that would have happened in a sophisticated lab somewhere else that you had to mail off to, and within 24 hours, you've got the report coming out the back end. All the chemistry has been done to give you an exact... So this will allow much more frequent, much more granular understanding of the soil properties. Why does that matter? Number one, today, already, fertilizer is the... one of the biggest expenses for farmers. Globally, half the fertilizer put down doesn't get absorbed by the plant. It runs off. Well, that's a problem for expense. It's a problem for sustainability. All that runoff goes into streams and causes problems for society. So one of the most regulated things coming for the farm is management of chemical, either fertilizer runoff or extra use of other chemicals. If you better understand your soil, you can more finely tune where you want to put that fertilizer. That's here now, today, it's a big, big driver. Where it's headed, you know, in the early days, is carbon sequestration. Globally, the world wants less carbon in the air. They want it. There's only one way to get it. You know, you have to stop emitting, but then to get rid of it, you want to sequester it through photosynthesis and get it trapped in the soil. Trees do that, plants do that. So if the farmer can get paid through carbon credits to trap that into the soil, there's a monetization opportunity. Now, we're early, early, early days in that, but one of the keys is to understand what's happening in the soil and confirm that, that actually got trapped. So that's why we got into soil as well, help them with fertilizer and things like that today, and then be an early, early first mover on, on future opportunities. All right, let's take a quick break. Anybody have a question in the room here? No. Okay, fine. All right, so let's sort of wrap up that topic then. So where are you now in kind of revenue, and where do you think you can be in whatever period makes sense to you? Yeah. So maybe before I do that, you know, get me excited on a roll a little bit about the one other thing I would talk about, so we talked about automating features, examples like targeted spraying, using artificial intelligence. The other one would be autonomy. We made a commitment by the end of the decade, we'll have a fully autonomous solution. That means not only is the feature automated, but the whole system is automated, so you can pull the driver out of the cab. We demonstrated this summer, automated baler. I think you rode in one of them. Mm-hmm. An automated grain cart, where the tractor, that when the combine is going through the field, when the grain cart is full, grain tank is full, it summons the tractor. The driverless tractor comes up alongside, matches with the combine, unloads while they're still combining, says, "Release," the tractor driverlessly goes over to the side of the field and unloads into a semi. We'll be coming with retrofit solutions on autonomous vehicles in 2025, targeted sprayers next year, electric vehicles next year. So the clean energy first step is a fully electric vehicle next year. So those are all just kind of just teasers for what's coming next from the innovation pipeline. What does that mean then, in terms of financials? The... You know, historically, when we were, when Damon and I were in Wall Street in December, we made a few commitments, and we intend to deliver on those commitments. Relative to Precision Ag, we came out about a year, year and a half ago, saying, we're gonna grow that business to be at $800 million. Well, shortly therein, we raised it to $900 million and then $1 billion. This year, we'll already be at $850 million, $800 million-$850 million, and we're confident we'll get that $1 billion by 2025 or sooner. For the whole company, we had a long-standing goal of getting to 10% operating margins. We achieved that last year, but we had a bit of a strong market. So we said, if you, if you are fair about it, and you brought that back to an average market, we call that mid-cycle, our 10.3 margin would be more like 9. So at an average market, you take any kind of good, bad market out of it, and you just say, "Let's neutralize the market." We committed to go from 9 to 12% margin. And what's also exciting is these three growth drivers that we have, Fendt Growth, Fendt Growth, Precision Ag, and Precision, and, and Parts and Sales, are all not only high margin, but they make us less cyclical. So when we achieve 12% at the mid-cycle, we also committed to bring our minimum, like when the industry is at its worst, our trough performance, up to 9%. Now, that compares to you know, our last trough was in 2016, we were at 4. So we're going from 4 to 9. That means investors in the future, when we're performing like that, can count on a company that's always adding shareholder value. And so financially, that's, those are aspirations we feel more and more confident all the time that we're absolutely gonna deliver on those. Great. All right. Any last-minute question? You have 27 seconds. All right, why don't we call that even then? Great! Thank you, guys, so much. Thanks so much. Appreciate the time. You bet.