Good day, and welcome to The AGCO Third Quarter 2023 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 one on your touchtone phone. To withdraw your question, please press Star, then two. 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. Good morning. Welcome to those of you joining us for AGCO's third quarter 2023 earnings call. This morning, we'll refer to a slide presentation that's posted to our website at www.agcocorp.com. The non-GAAP measures used in the slide presentation are reconciled to GAAP metrics in the appendix of that presentation. We'll make forward-looking statements this morning, excuse me, including statements about our strategic plans and initiatives, as well as our financial impacts. We'll discuss demand, product development, and capital expenditure plans, and timing of those plans, and our expectations with respect to the costs and benefits of those plans, and timing of those benefits. We'll also discuss future revenue, crop production, and farm income, production levels, price levels, margins, earnings, cash flow, and other financial metrics. All of these are subject to risks that could cause actual results to differ materially from those suggested by the statements. These risks include, but are not limited to, adverse developments in the agricultural industry, including those resulting from COVID-19, supply chain disruption, inflation, weather, commodity prices, changes in product demand, interruptions in supply of parts and products, the possible failure to develop new and improved products on time, including premium technology and smart farming solutions within budget and with expected performance and price benefits. Difficulties in integrating the Trimble Ag business in a manner that produces the expected financial results. Reactions by customers and competitors to the transaction, including the rate at which Trimble Ag's largest OEM customer reduces purchases of Trimble Ag equipment, and the rate of replacement by the joint venture of those sales. Introduction of new or improved products by our competitors, and reductions in pricing by them. The war in Ukraine, difficulties in integrating acquired businesses, and in completing expansion and modernization plans on time, in a manner that produces the expected financial results, and adverse changes in financial and foreign exchange markets. Actual results could differ materially from those suggested in these statements. Further information concerning these and other risks is included in AGCO's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2022, and subsequent Form 10-K and 10-Q filings. AGCO disclaims any obligations to update any forward-looking statements except as required by law. We'll make a replay of this call available on our corporate website. On the call with me this morning is Eric Hansotia, our Chairman, President, and Chief Executive Officer, and Damon Audia, our Senior Vice President and Chief Financial Officer. With that, Eric, please go ahead. Thanks, Greg, and good morning. AGCO has consistently delivered record results over the last two years, and I'm pleased to tell you that the third quarter of 2023 is no different. AGCO delivered $3.5 billion in third quarter sales, nearly 11% higher than the third quarter of 2022. Operating margins in the quarter were 12.3% and 12.6% on an adjusted basis. That's 190 basis points better than 2022. This marks the fifth consecutive quarter with operating margins above 10.5%, which is evidence of how we have structurally transformed our business and further demonstrates the progress we are making towards our mid-cycle 12% operating margin target. This strong financial performance reflects the continued success of our Farmer First strategy, focused on growing our Precision Ag business, globalizing a full line of our Fendt-branded products, and expanding our parts and service business. Our North and South American Fendt sales are ahead of our growth targets as we expand our distribution networks in the regions to give more farmers access to the industry's best equipment, and we continue to have the best parts fill rates in the industry. Our strategy is generating strong growth in each of these margin-rich businesses, providing the foundation for 2023 to be another record year in sales, operating margin, earnings per share, and free cash flow. Our expanding tech stack is taking our products to new levels of performance and efficiency, putting us in a winning position as farmers' most trusted partner for industry-leading smart farming solutions. The recently announced joint venture with Trimble is truly transformational for AGCO and for farmers. It also aligns perfectly with our strategy of focusing on a greater percentage of our business on the high margin, high-growth, Precision Ag segment of our industry. We'll talk more about the planned JV in a few minutes. Slide 4 details industry unit retail sales by region for the first 9 months of 2023. As harvest draws towards completion in the Northern Hemisphere, higher production is driving up grain inventories, weighing on prices. Farm income is still relatively strong, and with positive cash flow for most growers, demand for our equipment is at a relatively high level, but is retreating from the highs seen in 2022 and earlier this year. While still supportive, lower commodity prices and a fleet age trending younger are causing farmers to become more selective about their equipment and technology investments. North American industry retail tractor sales were down approximately 2% through September year-to-date versus 2022. Smaller tractor sales continued to decline from higher levels in 2022, as higher interest rates and overall economic conditions have slowed demand. Strong demand for greater than 200 horsepower and four-wheel drive units helped partially offset the decline. Industry retail tractor sales in Western Europe decreased approximately 2% through September compared to 2022. Farmer sentiment continues to be negatively influenced by the ongoing war in Ukraine, as well as input cost inflation. However, forecasts for healthy farm income in Western Europe are expected to support good retail demand for equipment throughout the remainder of 2023. In South America, industry retail tractor sales decreased 8% through the first nine months of 2023 compared to 2022. Retail demand in Brazil was negatively affected by the depletion of government-subsidized loan program prior to the June 30 fiscal year end. But with loans now being processed, we are hopeful this will help drive improved retail sales for the balance of the year. Although there are increasing signs of caution, retail demand in Brazil and Argentina remains at above average levels in 2023, with particular strength in the high horsepower segments. However, weaker commodity prices from strong crop yields and concerns about dry weather are creating concern for some farmers. The combine industry was up 23% in North America and 30% in Western Europe through September versus 2022, due primarily to improving supply chains. Combines in South America declined 20% in the first nine months of 2023 compared to the prior year. Although market conditions continue to soften off the extremely strong conditions over the last couple of years, we remain positive about the underlying ag fundamentals, supporting long-term industry demand for several reasons. First, stock-to-use levels are higher than recent lows, but they remain supportive of profitable commodity prices versus historical levels. Second, as the demand for clean energy grows, the need for solutions like renewable aviation fuel and vegetable oil-based diesel will grow strongly, driving demand for our farmers that will further support commodity prices. And third, input costs, such as fuel and fertilizer, are down from their peaks last year. We expect farm income to be down modestly in 2023 from the record levels of 2022. In aggregate, we believe that it will remain at attractive levels in 2024 and be supportive for industry demand. AGCO's supply chain has improved significantly over the last year. Our suppliers' on-time delivery performance to AGCO's factories has gotten better, and our on-time product delivery to our farmer customers has improved every month since March 2023. Another benefit of this more normalized production environment is lower inventory. We have been able to reduce our raw material and work-in-process inventory by 14% since September 2022. AGCO's 2023 factory production hours are shown on slide five. Our production decreased in quarter three by approximately 2% versus 2022. Recall that last year's third quarter production was exceptionally high as we were recovering from the cyberattack in the second quarter. Given this phasing and our focus on managing 2023 inventories, we are planning for relatively flat production levels in the fourth quarter versus last year, resulting in a 5% increase in production hours for the full year. As of the end of September 2023, demand for our farmer-focused products remains strong, and our order boards remained higher than historical average across all regions. In Europe, tractors have six months of order coverage, taking us into the second quarter of 2024. Dealer inventories are up approximately three quarters of a month versus September of 2022. We're now at our target level of around four months on average, with certain products like Fendt, high horsepower tractors, still below the optimal levels in certain areas. In South America, we have order coverage through December 2023, where we continue to limit our orders to around one quarter in advance, giving ourselves more pricing flexibility. We opened our fourth quarter order boards for all brands in South America, and they filled up within a matter of days. In North America, our orders for tracked tractors, planters, and application equipment are fully booked for model year 2024, as the demand in the big farm market continues to be strong. We continue to limit order intake on some products to improve our on-time delivery rates, though other products are returning to a more normal order bank management. We currently have approximately seven months of order coverage for both large and small ag. Moving to slide six. At our Investor Day on December 2022, we discussed our three high margin growth levers that would help AGCO achieve its margin aspirations and outgrow the industry by 4%-5%. To reiterate, those three levers are globalization and full line product rollout of our Fendt brand, focusing on global parts business and increasing the market share of genuine AGCO parts. The third is growing our Precision Ag business, which supports not only factory fit technology, but also significantly focuses on the mixed fleet retrofit solutions. These three growth engines will help AGCO achieve 12% operating margins at mid-cycle by 2026, and will drive AGCO's growth above the overall industry performance. Slide seven recaps the planned transformational joint venture between AGCO and Trimble that we announced a few weeks ago, in which AGCO will acquire an 85% interest in Trimble's portfolio of agricultural assets and technologies. By layering Trimble Ag on top of our already strong portfolio, we will fast-track AGCO's technology transformation. The joint venture will allow AGCO to be a key player in guidance by offering advanced hardware and correction services. It enables us to automate even more activities for the farmer through Trimble's automated steering system and enable farmers to connect with all of their data via Trimble's farm management software, all of which will be controlled by AGCO. This combination provides a full suite of advanced technologies for farmers everywhere, regardless of the brand. With our combined solutions, we further expand our mixed fleet offerings throughout the entire crop cycle and are able to put technology on more than 10,000 different models from almost any OEM. This JV announcement, combined with our existing Precision Planting business, reinforces our commitment to brand agnostic retrofit solutions and will help position AGCO as the hub of the mixed fleet solutions. Lastly, AGCO's multi-channel distribution approach will drive increased adoption of Trimble's portfolio of technology across the machinery population, allowing farmers more locations to access next generation technology. This multi-channel access is a key lever to doubling the EBITDA in five years. Looking at slide eight, the business combination will create meaningful commercial growth opportunities for AGCO through access to expanded geographies and channels. Through September, AGCO's Precision Ag sales have increased 16% on a year-to-date basis, putting us solidly on track to hit our long-term 15% growth target and taking AGCO's Precision Ag sales to $1 billion by 2025. When we overlay Trimble Ag's 2023 expected revenues, the effective pro forma sales would be approximately $1.3 billion already in 2023. With the combination of revenues from AGCO's Precision Ag and Trimble Ag JV, we expect to deliver over $2 billion in combined Precision Ag revenues by 2028. To conclude, we would likely expect this deal to close in the first half of 2024, subject to regulatory approval and customary closing conditions. With that, I'll hand it over to Damon. Thank you, Eric, and good morning, everyone. I will start on slide nine with an overview of regional net sales performance for the third quarter. Net sales were up approximately 7% in the quarter compared to the third quarter of 2022, when excluding the positive effects of currency translation. Pricing in the quarter, which was in the high single digit range, was the primary contributor to higher sales. As you may recall, the third quarter of 2022 was a very strong quarter, partially due to a catch-up in sales related to the cyber event in the second quarter, which had bigger effect on our European and North American operations. By region, the Europe, Middle East segment reported an increase in third quarter net sales of approximately 9%, excluding the positive effects of currency translation compared to the prior year. The improvement was driven by increased sales of mid- and high-horsepower tractors, strong parts sales, along with favorable pricing. In South America, net sales in the third quarter grew approximately 19% year-over-year, excluding the positive effect of currency translation, driven by the continued strong sales growth in Brazil and Argentina. Higher sales of tractors and Momentum planters, as well as favorable pricing, drove most of the increase. Net sales in North America increased approximately 3% in the quarter, excluding the favorable impact of currency translation compared to the third quarter of 2022. The growth resulted primarily from increased sales of high-horsepower tractors, sprayers, and hay tools, along with the positive effects of pricing that more than offset inflationary cost pressures. On a constant currency basis, net sales in our Asia, Pacific, Africa segment decreased approximately 15%. The most significant declines occurred in Australia, Japan, and China, driven by lower farmer confidence and dry weather. Finally, consolidated replacement parts sales were approximately $468 million for the third quarter, up 10% year-over-year, or 5% excluding the effects of positive currency translation. Turning to Slide 10. The third quarter adjusted operating margin improved by 190 basis points versus 2022. Margins in the quarter benefited from higher sales due to a richer mix and positive net pricing compared to the third quarter of 2022, significantly offsetting high input costs and approximately $35 million of increased engineering expense year-over-year. Price increases in the quarter more than offset material and freight cost inflation on a dollar basis and contributed to the improvement in margins. For the full year, we are still projecting approximately 8% pricing. By region, the Europe, Middle East segment reported an increase of approximately $57 million in operating income compared to the third quarter of 2022, and margins improved 230 basis points. Higher sales due to strong net pricing and a healthy product mix contributed to the improvement. North American operating income for the quarter increased approximately $27 million year-over-year, while margins improved by approximately 250 basis points. Operating income benefited from higher sales due to positive net pricing and a favorable mix based on significant growth in Fendt products year-over-year. Operating margins in South America exceeded our expectations again this quarter and were over 20%, a 200 basis point increase over the same period in 2022. Operating income improved almost $42 million versus the third quarter last year. The improved South American results reflect the benefit of a favorable sales mix. Finally, in our Asia Pacific Africa segment, operating income declined approximately $14 million in the quarter due to lower sales, reflecting much weaker market conditions year-over-year, as well, as well as lower product mix. With the margin expansion in the last two years in our North American and South American regions from our strategy execution and disciplined pricing, we expect AGCO's margin profile to be more balanced across the globe in the years ahead. Slide 11 details our year-to-date free cash flow for 2022 and 2023. As a reminder, free cash flow represents cash used in or provided by operating activities, less purchases of property, plant, and equipment. Free cash flow conversion is defined as free cash flow divided by adjusted net income. Through September year to date, we have used $155 million of cash, approximately $411 million, or 73% less than 2022, despite increasing capital expenditures by almost $90 million year-over-year. This is a result of higher earnings and improved supply chain that enabled us to improve our manufacturing flow and get products into the hands of our farmers more quickly. We typically sell down our inventory over the back half of the year and anticipate a strong fourth quarter to hit our targeted free cash flow range of $900 million-$1.2 billion for 2023. For 2023, although things continue to improve, we still expect our raw material and work-in-process inventory to remain somewhat elevated, given supply chain challenges earlier in the year. But we still expect it to be a modest source of cash versus a use in 2022. We expect our free cash flow conversion to continue to range from 75%-100% of adjusted net income, a significant increase from 2022, consistent with our improved financial outlook. We remain focused on direct returns to investors during 2023, with a regular quarterly dividend that we increased last quarter by 21% to $0.29 per share, and the payment of a special variable dividend of $5 per share in the second quarter. Slide 12 highlights our 2023 retail market forecast for our three major regions. While still at supportive levels, the recent reductions in commodity prices are resulting in slightly softer demand across all regions in 2023 relative to 2022. For North America, we now expect demand to be 2%-3% lower compared to the healthy levels in 2022. The high horsepower row crop equipment segment continues to be strong, but it's offset by softer demand for smaller equipment after several years of robust growth. Current interest rates are expected to continue to slow the smaller equipment segment of the market. In South America, we expect industry sales to now be down 2%-3% in 2023. This is a result of softening demand and higher dealer inventories we have seen emerge last quarter. However, this region remains one of the stronger end markets, especially in Brazil, where the farm footprint is increasing. Although down from 2022 high, we expect healthy farmer profitability in the region, which should continue to drive demand for large ag equipment. For Western Europe, we now expect the industry to also be down 2%-3% compared to 2022. Farm fundamentals in the region are still generally healthy, but sentiment has weakened a bit in the region, and order flow has slowed. Slide 13 highlights a few assumptions underlying our 2023 outlook. In addition to focus on meeting the robust end market demand, we will also make significant investments in the development of new solutions to support our farmer-first strategy. Our sales plan includes market share gains, along with price increases of approximately 8%, aimed at more than offsetting material cost inflation. With the weakening of the euro last quarter, we do not expect currency translation to have effect on sales year-over-year. Engineering expenses are expected to increase by approximately 20%, or approximately $100 million compared to 2022. This increases targeted investment in smart farming and Precision Ag products. Given our strong performance through September, we are raising our full-year operating margin to around 12% versus our prior outlook of 11.7%, driven by the sales mix, favorable pricing net of material costs, and improved factory productivity, partially offset by increased investments in our engineering and digital initiatives, as well as inflationary cost pressures. Other expenses are expected to increase approximately $105 million year over year, most of which has been incurred year to date. Half of this increase is tied to the sales and receivables to AGCO Finance, where we're being affected by higher sales volume and higher interest rates compared to 2022. The other half is related to increased volatility in the Turkish lira and Argentine peso, where we saw additional FX losses in Q3. With more clarity on our full year, we are now updating our effective tax rate to 27% for 2023, which is the low end of our prior estimate of 27%-28%. Turning to slide 14. Despite the slightly weaker currency outlook versus last quarter, we have maintained our full-year net sales outlook of approximately $14.7 billion. We are increasing our earnings per share estimate, which should now be approximately $15.08, or on an adjusted basis, $15.75 in 2023 versus our prior target of $15.25, given the strong year-to-date performance and our confidence in the fourth quarter. We've also increased our CapEx targets to around $450 million to include additional investments in our CVT capacity and to further enable Precision Ag growth. As I mentioned earlier, even with the increased capital expenditure target, free cash flow conversion should be in the range of 75%-100% of adjusted net income, consistent with our long-term target, which, based on our improved outlook, should deliver an additional $60 million-$80 million in Free Cash Flow from our prior outlook. With that, I'll turn the call back to Greg for our Q&A. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you are using your speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to one question and a single follow-up. Our first question is from Seth Weber with Wells Fargo Securities. Please go ahead. Hey, thanks. Good morning, guys. Eric, in your... I think it was Eric, in your prepared remarks, you talked about a potential, you know, risk or trying to have to navigate around the loss of a potential, you know, of a OEM customer from the Trimble JV. I'm wondering if you could just give us a little bit more detail on how you expect to, you know, to offset that, that loss that's likely coming on that, on that side of the JV. Thanks. Yeah, we've got a really solid plan here that is largely in our control in that today, AGCO offers two suppliers or two choices on our navigation systems. One is Trimble and one is another supplier. A majority of the customer sales actually go to the other supplier. And so as we migrate into the, you know, once the JV is official and we migrate into that chapter of existence where we're working together, we can influence sales to move significantly towards a predominantly Trimble offering out of the factory on our new products. And then also, we can continue in the marketplace to help those that have bought Trimble systems in the past, regardless of brand, to continue to have confidence. There's over 100 OEMs that are already partnered with Trimble. We've talked to many of them already, and the feedback has been consistently strong, that they said that under the new arrangement, they still feel very comfortable and want to continue to grow the business. And then there's the retrofit business, retrofit portion of the market that we intend to focus on as well. So retrofit, OEM, from the factory, working on all three of those paths to make sure that plenty of customers can get access to this great technology. That's helpful. Thanks. And then maybe just, you know, appreciate the color on the order boards for next year. Can you just give us any details on how you're handling pricing for 2024 at this point? Yeah, I think, Seth, we haven't given any sort of official outlook for our 2024 pricing yet. But I think if you think about our, our outlook here for the 2023 performance, where we said we're around 8%, and you look at our year to date, we're starting to lap some of those big price increases that we put in place last year. And so we see pricing becoming what I'll call more normalized here in the fourth quarter. And again, we're probably seeing that to be a more reasonable assumption as we move into 2024. The next question is from Nicole DeBlase with Deutsche Bank. Please go ahead. Yeah, thanks. Good morning, guys. Good morning. Can you maybe talk a little bit about what you're seeing in South America with respect to recovery and retail sales, your inventory levels, and also any thoughts on margins for 4Q, given the very extreme strength that persisted again in 3Q? Yeah, Nicole, so I think if we look at the fourth quarter, we're definitely we've seen at the start of the third quarter, as you may recall, the government subsidized funding plans were a little bit delayed in ramp up to the small and medium-sized horsepower type farmers. You know, we saw that improve in the back half of the quarter. You know, as we think about that, you know, what we're seeing is a continued slowdown in that market, especially on the lower end side of the market. As we look at the dealer inventories, they definitely have moved to what I'll call a more normalized level here in the fourth quarter or in at the end of the third quarter, and we expect that to stay here into the fourth quarter. And as we think about, and we've been talking about this for the past couple of quarters, as the dealer inventories level out and the farmers' confidence in their ability to get products start to stabilize, we're expecting to see more of those traditional retail incentives that we would provide to our dealers and our farmers to start to materialize here in the fourth quarter. And what I would tell you is, we looked at the third quarter, we started to see that at the back end of the third quarter. And so as we extrapolate that into the run rate for the fourth quarter, we definitely see the South American margins coming down versus that third quarter. I would probably put them more into the high teens, as we look at the fourth quarter, and that's sort of embedded in our Q4 outlook as we give you that 12% full year versus where we are year to date. Okay, got it. That's really helpful. And then just a higher level question on the implied outlook for 4Q. I think you guys are kind of embedding like EPS, kind of flattish sequentially, but you usually see a pretty material Q-on-Q step up. So what are the big drivers of that divergence from normal seasonality? Thank you. Yeah. So a couple things driving the fourth quarter, Nicole. One is, if you look at the currency outlook that we gave you this quarter versus the prior quarter, you know, last quarter, we said it was gonna be a 2% positive. Now we're saying it's gonna be relatively flat. You know, that influences sales by about $200 million. So the fact that we've kept our number at $14.7 billion is a positive of our Q3 performance and our outlook for Q4. That also translates to around $0.20 of earnings per share. And so when you look at our outlook of $15.75 billion, you know, that's been diluted by about $0.20 of lost FX versus our third quarter outlook. But more importantly, when I think about the year-over-year Q4, if you remember, last year, we had an exceptionally strong fourth quarter as we were recovering from the cyberattack in the second quarter and the supply chain disruptions that we were dealing with. And just to put that in perspective, specifically in Europe, we had that really strong fourth quarter because of supply chain. If you remember, we were talking about the semi-finished inventories at the end of the third quarter last year. This year, they're down about 70%, almost 70% versus where they were a year ago because we've improved the supply chain, because we've been able to get these tractors and combines out of the factories and off to the farmers much more effectively through the course of the year. So we don't expect that big fourth quarter, that massive fourth quarter we saw last year, specifically in Europe, and that's gonna create a year-over-year challenge for us, you know, bringing those numbers down a little bit, relative to what you would have saw last year. Our next question is from Mig Dobre with RW Baird. Please go ahead. Thank you, and good morning. You know, hopefully, I understood this correctly, but, I mean, what I, what I heard from your comments is that inventories, dealer inventories, have largely normalized at this point, and it sounds that demand, maybe is starting to soften a little bit. So I'm kind of curious as to how you're thinking about managing, the channel as you look into 2024. Are you thinking of downward adjustment in production? And if that's the case, is there some context that we should have about the first half versus the second half as we think about next year? Yeah. So, you know, I think, Mig, you're right. The inventory levels that the dealers, generally speaking, have normalized over the last quarter, I would say, with a couple caveats to that. North America, for example, you know, we do know that the dealer inventory is just around 6 months or so. The third quarter is usually the highest level. If I strip out the low at the small ag portion of that, the dealer inventory is actually around about 5 months. So it's still a little bit low, so there's still some opportunity there. If I look at Europe, and Eric, in his opening remarks, talked about the inventory levels being at about four months. Again, that's an overall statement, but there are still a lot of areas where the Fendt high horsepower tractor inventory at the dealers are below the optimal level for us. So we still see some opportunities for some dealer fill there. But generally speaking, I would say inventory levels are normal. As we think about 2024, as we go through our budget planning process, the question is gonna be about our market share and issues and what we think we can gain relative to where we were in 2023, given some of the supply chain constraints. And that's gonna influence our production, especially as we see these markets potentially continuing to soften. So we don't know how the production is gonna shape out just yet. We'll, we'll give you that update, but I would tell you, you should be thinking more about production aligned with overall demand, as we think about 2024. All right, that's helpful. Then I guess my follow-up, your North America margins is, as you talked about already, have been quite good. I'm sort of wondering about the sustainability of that going forward, especially as you talk about Fendt continuing to sort of build momentum. Thank you. Yeah. You know, again, I think, Mig, for us, North America has been a really good margin performance for us, and a lot of that is predicated on that Fendt market share expansions. We've talked about introducing Fendt to North America and South America, adding these Fendt dealers, and really focusing on that Fendt experience. We've talked about being very selective on how fast we roll Fendt out into the dealer networks, who's able to offer it, because they need to deliver on that overall Fendt experience, which includes the Gold Star Warranty, the replacement tractors. So we've seen great growth, great share growth in North America. And again, if I think about that performance year-over-year, a lot of that, or the majority of that, is coming from the Fendt market share growth that we're seeing or the Fendt performance in North America. And as we've said in the past, we still see opportunities. Remember, at our December Investor Day, we said that we are gonna outpace the industry regardless of where we were in the cycle, by 4%-5%. And those three growth vectors were gonna be the Fendt market share, mainly in North America and South America. We remain convinced that that is still an opportunity as we move forward into 2024. Precision Ag growth, which we've said is gonna grow at around 15% per annum, on average, and then our parts growth. So those three are gonna help us outpace the industry by 4%-5%, and I think Fendt North America is sort of showing that, this quarter, and we remain confident in its potential going into next year. Yeah, just one more comment on that. You know, we've grown the Fendt market participation in North America from about 40% market coverage to 70%-75% market coverage with a step-by-step dealer expansion that Damon talked about. We expect to grow that from 75% up to 90%-95% over the next couple of years. Steadily, only when the dealer earns it, but much like we've been doing over the last few years. So there's, you know, more market potential there to be able to experience the full Fendt overall brand promise. Same thing in South America. The next question is from Steve Volkmann with Jefferies. Please go ahead. Great. Good morning, everybody. Eric, I think you talked about farmers becoming more selective in their capital spending. What does that mean exactly? Are you seeing a sort of a mix shift in the types of equipment that they're buying? I don't know if I'd say a mix shift, but I would say that, you know, some of the new applications for financing are cooling off. You know, it's coming back to more of a normal market. We've had such a hot market these last couple of years, but the mix is still oriented towards large ag. The growth is still very much in the Precision Ag retrofit business to make an existing machine more capable and more intelligent. Small ag is still, on a relative basis, weaker than large ag. So I don't think it's much more of a mix shift. It's just a general, a little bit more caution on the farmer's part. Okay, thanks. And then, it sounds like everywhere we turn, people are talking about sort of normalization. Does it make sense to think about 2024 in just really big picture terms as kind of a mid-cycle year for the industry? And you guys may do what you do if you have outgrowth targets, but is mid-cycle the right way to think about 2024 for now? Yeah, we're not giving exact numbers, but, you know, I think that we don't see any dramatic moves in 2024. Let's say it that way. It's a general slight movement into 2024, but we haven't committed to any industry numbers, but wouldn't be shocked with your kind of prediction. The next question is from Kristen Owen with Oppenheimer. Please go ahead. Hi, thank you for taking the question. I'm also gonna ask a normalization type of question, and in particular on the pricing front. As we think about pricing normalizing, can we just double-click on what pricing normalization for AGCO means today? So arguably, you've got a much richer technology mix, a much higher contribution from Fendt. Just how we think about what normal pricing means on a go-forward basis. Yeah, I think, Kristen, you know, the direction when we think about pricing, you know, I would sort of tell you it's 2%-3% has been the historical. Again, when you think about the pricing and you reference Fendt, Fendt is driving more of the margin enhancement. Again, if we're raising prices on a Fendt tractor, it may not be different than what we do with a Massey or a Valtra tractor when we think about that 2%-3%. And to your point, when we think about the Precision Ag, the retrofit, that operates at a slightly different price point, and so the pricing there may be slightly different. But in aggregate, you know, you're probably looking at us being in that more 2%-3%, you know, based on our historical rates. Maybe just another comment. Both your and Steve's question touched on this normalization. It works on... We, we believe it works on both sides of the equation. So although pricing won't be going up as much as in the years past, we also expect that there's gonna be a lot more opportunity for farmer costs to come down and AGCO costs to come down. So farmer costs, in terms of fertilizer and some of their other inputs, and then, and interest rates, we feel like they're probably near peak, or close to it. ... so that has the potential to go more down than up. And then AGCO costs similarly, both at our factories and our supplier factories, we've had a lot of inefficiencies over these last two or three years, and we've not gotten all that out yet. So although we've had a much better performance this year, our plant shortages are down 54% year to date. There's still cost in the system that we intend to take out in 2024. So that's the other half of the normalization discussion. I appreciate this puts and takes for next year and beyond. But so then my follow-up question is related to the Trimble JV. You talked about the fill that needs to occur in order to replace the existing OEM relationship, but the $2 billion in precision revenue implied by 2028, it's about a 15% CAGR off of a much higher base. Just help us dimensionalize the sources of growth in terms of technology solutions and how to think about the cadence to that $2 billion revenue. Thank you. Yeah, Kristen, I, I think for us, again, that 15% CAGR, I think what you're going to see here over the first couple years is actually a decline in some of the OEM revenues coming out of the system, which we knew about, as we were looking at the, the partnership with Trimble. As Eric alluded to in his comments, you know, our plan is to replace that with our OEM fitment opportunities here, and we expect to sort of recover that. But again, from an absolute level, over the first couple of years, you won't see much growth there, but see more of a transformation of the mix of that revenue. And then as we introduce new products, we start to leverage more of the combined channels. So again, bringing the Trimble-type products into Precision Planting, some of our OEM channels, looking at accessing the Vantage channel with Precision Planting. We see significant revenue growth coming there, plus some of the new product introductions that they have in the pipeline that we're excited to bring to all those different channels. And those are the two, sort of the primary drivers that'll help drive that growth over the next several years. The next question is from Larry De Maria with William Blair. Please go ahead. Hi. Thanks. Good morning, everybody. Just want to follow up on this, you know, the Trimble discussion. And with the $170 million in pro forma EBITDA, there's obviously a big portion that you've referenced of CNH and CNH dealer sales and EBITDA. Can you maybe give us some color on, you know, specific numbers on what 2024, that $170 million looks like in 2024, given all the dynamics? Let's say it's a flat market for, you know, what they sell, and you're going to lose some sales in EBITDA, but also gain some. So how would that $170 million translate on a full year basis, given those dynamics? Yeah, I think, Larry, it'd probably be a little premature for us, given that we're still in the midst of closing the transaction right now. I think we're going to defer any comments on 2024 on the JV portion of 2024 until we actually get to closing. And again, what I would tell you, as Eric has alluded to, you know, once we're able to, we're going to start to work with the team there in shifting the receivers and our base offering to Trimble. But we have to work through the process here to ultimately close the transaction. But once we're able to, we'll give you guys more clarity on how we envision and what we see for the joint venture for 2024. Okay. Thank you. And then maybe switching gears. You said, I think in your comments, that track tractors, planters, application equipment in North America are sold out for 2024 or for model year 2024. Can you put some context into that? You know, what percentage of North America is covered by that, and is it—are those sold-out levels higher than the 2023 levels? Just, you know, what does that directionally mean for, for North America? Yeah, I think that's so directionally speaking, it's about 20% of the North American revenue, and it's, I'd say, relatively flat, volumes year-over-year- Yeah In those particular products. Yeah. We, since supply chain has improved, Larry, it probably means we'll produce some, you know, a small amount more than we did the year before, but relatively similar. The next question is from Tami Zakaria with JP Morgan. Please go ahead. Hi, good morning. Thank you so much. So most of my questions have been asked, so just two quick ones. The first one is on fleet age. I think you mentioned it's trending younger. Is it for both tractors and combines that you feel like it's trending younger? And any quantification, like what is the age now versus, let's say, 2-3 years ago? Take this? Yeah. So Tami, I would say, yeah, both categories, tractors and combines, and we've moved down probably from the beginning of the year to where we are at the end of the third quarter to somewhere between a half a year and a year closer to normal. So I think we were, you know, probably a full year ahead of kind of a 10- or 15-year average, 7.5%-- or 7.5 years versus this more normal 6.5. We're probably about halfway back to that 6.5, so probably closer to seven in terms of age of the fleet. Got it. That's helpful. And then I think, going into the third quarter, you were expecting flattish production hours, but it seems like it was down 2%. What drove that disconnect? And, and also related to that, in the fourth quarter now, it seems like you expect production hours up a little bit year-over-year. Again, which regions are driving this up expectation? Right. Tami, most of that, that change in fluctuation related to what happened with the financing program in Brazil. So that program ran out of money, as we've talked about, as the loans began to be processed again. Well, so that led to us cutting production in the third quarter in Brazil. And then as those loans now are being processed, some of that production got shifted into the fourth quarter. So net-net, most of that change related to South America. And just one other thing to think about when you're thinking about the age of the fleet, the other indicator to watch is used inventories. And so, for example, in North America, the tractors 175-300 horsepower, which is kind of right in the middle of the bell curve. We've got, like, 300 units in the industry now versus 6,500 units pre-COVID. So inventory is still low, maintaining good, strong pricing of used inventory. That's a good health barometer for the industry. The next question is from Jerry Revich with Goldman Sachs. Please go ahead. Yes, hi, good morning, everyone. Hi, Jerry. I'm wondering if we could just expand the discussion on the Trimble JV integration. So, you know, one of the compelling points about the acquisition is just how quickly you can transition the receivers and drive that additional upside for the joint venture. So, you know, as we think about the mix of receivers that are going to be Trimble JV, you know, over the course of fourth quarter, first quarter, can you give us a sense? Is it possible for us to be at a healthier run rate from a mix standpoint, you know, exiting the first half of the year than what the run rate of the joint venture is now? Or are we really waiting until we close to, you know, pull that lever, Eric, that you spoke about earlier in the conversation today? Well, so there's two elements to that. One is, is there a technical design work to be done? And the second one is, how big is the order bank? And so on the positive side, there's no technical redesign work to switch over because we're already offering the Trimble receiver on our products. It's just, we offer two versions, and we actually have the other brand in base as the base offering. We would switch that, have Trimble in base and orient the customer toward Trimble. So there's no technical work to be done, but there is an order bank. And so whatever the order bank had been ordered over the last several months is what it is, and we just need to work through that. But we expect the deal to close in the first half of 2024, if regulatory approval happens to go at the pace we anticipate. And that's about the same time—that's about the same size as our order bank. So, we're trying to organize it such that we could get a running start early into the new joint venture with much stronger rates of Trimble take rates. That, that's great. And can I ask on an unrelated question in Brazil? You know, the industry year-to-date retail for 180+ horsepower tractors is down 8%. You know, your, your shipments are up, you know, over 20%. Is that how much share you're gaining, or can you just flesh that out a little bit in terms of your market position now? And, and can you touch on where do you expect the margin rate to be in that region relative to your other regions on your normalized framework, considering, you know, the 20% that you're running at now? Yeah, Jerry, some of that increase in terms of our sales was shipments to our dealers, and we talked about our dealer inventories kind of normalizing. So some of it related to kind of restocking. But you're right, in terms of especially when it comes to the higher horsepower categories for tractors, sprayers, and planters, I would add in there, too, in terms of market share gains. The Fendt brand's done really well in Brazil as we've launched it, and we have aggressive growth targets. And to be honest, we're actually ahead of those growth targets. So a good bit of that's share gain. A little bit of it is also restocking of our channel down there. Yeah, and Jerry, in regard to your margin question, again, South America has done exceptionally well. And again, you've followed us long enough. We were in a money-losing position there years ago. You know, we've taken that business as part of the strategy, mixing up to generate these 20+% margins. Again, a little bit of that is ahead of themselves because they've been very good in pricing and ahead of material costs, and we haven't been giving those dealer incentives. As I said, you know, in the fourth quarter, we expect that to come down more into, I would guess, into that 17%-18% margin range. I think over the long term, and I'll say in a more normalized environment, you know, we would expect the margins in South America to be more in that mid-teens sort of range over the longer term, when we get into what I'll call more of a normal run rate. But for the balance of this year, we still expect it to be above that here as we enter the fourth quarter. The next question is from Chad Dillard with Bernstein. Please go ahead. Hi, good morning, guys. Morning, Chad. So a couple questions for you. First on pricing. So if I look at your year-to-date price and your 8% guide, it looks like 4Q implied it's flat. So just want to confirm that. Second, just would like to get some early color on 2024 farmer profits for the U.S. and Europe. And then finally, just want to get a better sense of where you are versus mid-cycle exiting 2023 on a volumetric basis. Yeah, sure. So for Q4 pricing, Chad, I think directionally, you're in the ballpark. You know, flat to mid- to low-single digits is sort of the range that we would expect to see in the fourth quarter. I'll let Greg handle the 2024 profitability. But as I think about where we are mid-cycle, you know, I'd say we've seen as the markets have weakened here in the back half of the year, you know, directionally, I would expect as total company, you know, we would be exiting the year at around 105% of mid-cycle, would sort of be our current estimate. And we started the year a little bit stronger than that. But, you know, given the weakness we saw in Asia Pacific, some of the weakness we're seeing, especially in the low horsepower South America, probably about 105 as we finish the year. And I'll let Greg touch on the 2024 farmer profit outlook. Right. So we've talked a good bit in our prepared remarks about commodity prices coming down, but still remaining at attractive levels, kind of well above if you look at 10-year averages and stuff. That being said, we've also seen input costs come back, diesel, fertilizer, some of the other input costs. So the outlook, kind of at a high level, would be to see a modest decrease in 2024 in terms of farm income, but certainly still in a very supportive range as we think about farmers' ability to continue to refresh their fleet and invest in new technology. Great. That's helpful. Then the second question, just on R&D intensity. With the integration of, of Trimble, any change in terms of how you're thinking about, that line item? No, I mean, we've, we've raised our R&D or engineering spend 60% since we launched our new strategy. We've invested in six tech companies, including Trimble, JV. All of this is to accelerate our progress on developing the industry-leading smart farming solutions. And we have very minimal overlap between the Trimble teams' projects and the Precision Planting or AGCO teams' projects. Where there are a little bit of overlap, we'll redeploy those on more projects. We've got, like, 150 projects lined up that are not being worked on yet to automate more features on the machines all the way around the crop cycle. So plenty of work left to be done, lots of great people to work on them, and we want to help find max velocity on the overall portfolio. We think there's probably going to be some synergies as just like when we bought the six tech companies, even though the project isn't redundant, if you develop a sensor in one place, you don't have to develop it another. You can just reuse it, and things like that. So we're looking forward to additional traction and velocity by having all these teams work together. The final question today will be from Tim Thein with Citigroup. Please go ahead. All righty. Well, let's combine these. Maybe just, I guess part A is just on the Fendt in Europe, rather. In an environment where, let's just, you know, let's call the market flat to down as a market. What kind of off? You know, to the extent in a flat market, getting inventories back to normal, any way to think about—obviously, that carries a richer mix. So any way to think about kind of a margin range, to the extent there's some channel fill in that category, or in that product line? And then, just on South America and Brazil specifically, I just want to make sure I kind of get the overall message with respect, not on the small side, but just on the high horsepower market. You know, we've seen some of the crop chemical companies have put out some pretty big declines in terms of crop chemicals and other inputs. What, if anything, does that kind of signal to you in terms of, you know, demand profile as we head into 2024? Not on the smaller stuff, but just on your high horsepower market in Brazil. Thanks. So I think, Tim, if we think about Europe, and again, you know, using the commentary about the dealer inventories being at a relatively normal level, as I alluded to in my remarks, you know, the Fendt high horsepower inventory levels are still below in many areas. So again, and you know this, Fendt is a richer mixed product for us. And so to the extent, using your analogy of things staying normal, as that sort of part of the inventory fills up, that would be margin-enhancing for us, all else being equal. You layer on top of that some of the new products, the market share initiatives that we have, also Precision Planting, you know, looking to expand in Europe, you know, we definitely see opportunities. I go back to our December Investor Day, where we said we're going to outpace the industry by 4%-5%, regardless of where we are in the cycle, and that's between Fendt, Precision Ag, and Parts. You know, Europe had an exceptionally strong growth Parts business in the third quarter. So teams doing quite well as they look to continue to maximize those three growth vectors for us. And again, I think we'll see where the overall markets are in 2024. But again, those three items we expect to continue to help us outpace that. On South America- Again, the team has done exceptionally well on the high horsepower segment of the market. You know, the Fendt product portfolio, but even the high horsepower Valtra products, high horsepower Massey products, have done exceptionally well in gaining share there. So again, we see significant white space opportunities in the Mato Grosso region. You again may recall, we have about—we've covered about 70%-75% of the white space there. There are still opportunities to gain share there as we open up incremental dealers. Our existing dealers continue to penetrate that farm. I would tell you, I was in the Mato Grosso region just a couple weeks ago, met with multiple farmers in the region, and they are ecstatic with what they're seeing with the Momentum Planter. The Fendt and Valtra products in the region are performing exceptionally well, and they were very excited about what they saw as there are opportunities for growth as that region continues to expand in arable land, as they continue to becoming more of a global exporter. They were very excited about the long-term process in Mato Grosso and what the Fendt product line, what was offering them, in their overall profitability. So I think over the long term, you know, we feel very good about what we see in that part of Brazil, specifically. This concludes our question and answer session. I would like to turn the conference back over to Eric Hansotia for any closing remarks. Very good. Thank you very much. I'll close today by saying thank you very much for your participation and your support of AGCO. We're really proud of our performance throughout 2023. It is a great third quarter in many ways, and it's setting us up for a trajectory to deliver even another record year, big time. Just to give you some examples, our smart planters, we're expecting those to be up 20% in 2023 versus 2022. IDEAL combines forecast those sales will be up 65% versus 2022, and 118% versus 2021. On sprayers, our smart nozzles be up 75% versus 2022. Those are all just indicators of the value we're generating for farmers through smarter and smarter machines that add not only more productivity, but more sustainability to their operations. Our key to success overall is the continued execution of our farmer-first strategy. Our focus is on growing our margin-rich businesses like Fendt, Parts and Service, and our Precision Ag business that we mentioned several times. We've invested heavily in all of these, and we continue to do that. The announcement of the AGCO Trimble joint venture was in this past quarter, represents the biggest ag tech deal in history and will enable AGCO to further develop farmer-focused solutions that are solving critical problems, many of them with very short paybacks. The large ag markets continue to be higher than historical averages globally, and farm fundamentals are supporting farmers' investments. Over the last few quarters, we've touched on many factors supporting our markets, including growing populations, changing diets, low stock-to-use levels, increased demand for biofuels, and relatively healthy commodity prices. All of these trends give us confidence in the long-term health of our industry. In fact, when you take a look at just renewable diesel, we're seeing that in the U.S., by 2028, or 2025, sorry, renewable diesel demand will grow to about to consume about 40% of the current U.S. soybean acres. That's very similar to what's happened with ethanol consumption of the corn acres. So there's a big demand growth driver right on the horizon here. We look forward to seeing many of you at our Agritechnica meeting on November fourteenth in Hanover. Thank you very much for your participation today, and have a great day. Thank you for joining the AGCO third quarter 2023 earnings call. The call has concluded. Have a nice day.