Good morning, everybody. I think we're going here. Let's kick this off on day two of the Industrials Conference, the Jefferies Global Industrials Conference. Welcome. On behalf of Jefferies, I'm Steve Volkmann. I cover a wide swath of industrial companies now. I guess that's what we do here. We're very pleased to kick off day two by welcoming AGCO to the dais. We have Eric Hansotia, who's the CEO, Indira Agarwal is the CFO, fairly newly minted, so go easy on her today. We're very pleased to welcome them. Greg Peterson is here as well to bat cleanup if necessary. We're going to run this like a fireside chat. We'll have a bit of an interview process here. We would welcome very much any questions from the field here. If anybody has one, I'll come up for air in 10 or 15 minutes and give you an opportunity to chime in. With that, welcome. Thank you guys for coming. Yeah. Thanks, Steve. Thank you. Let's maybe kick it off. There seems to be a general improvement in attitude around agriculture, generally. We had a couple other companies here yesterday. I can't quite remember who they were, but they seem to be fairly upbeat, relative to this sort of cycle bottoming trend. Maybe let's just start off, Eric. What's your view of the cycle and where we are? Yeah. We talked last year even that a lot of the fundamentals were setting themselves up to establish a bottom, and we're actually even expecting a little bit of recovery this year. With the [Iran war], the bottom extended. What do we look at? We look at the age of the existing fleet in farmers' hands. It's as old as it's been. We've got the dealer inventories and used equipment down to target levels, so the pipeline is cleaned out. Now we're starting to see recovery in commodity prices for grains. There was a tension in the system of farmers wanting to buy, but they needed to have some profitability come back into the system. Now that the grain price is recovering, there's profitability. I was just at Farm Progress Show last week talking to several hundred farmers and dealers, and the enthusiasm was like we haven't seen in several years. They were excited to be able to come back into the market, excited about a lot of the new technology that we've got, either on our products of Fendt and Massey Ferguson or our precision technology business, PTx. Now, we also think that it's predominantly a North America situation right now. It's much less positive in Brazil, and Europe is in the middle. Brazil's got some headwinds of high interest rates and an uncertainty around an election coming up with polar opposite candidates and uncertainty who's going to win. Europe's in the middle. We don't have those polar opposites here, so that's not a problem. That's fortunate for the U.S. Maybe digging a little deeper, though, it seems like a lot of the improvement, in crop prices especially, has been driven by lower yields globally, which pose an interesting question, because they're going to get less volume, but they're going to get more price. But you believe the net is a positive outcome in that scenario? Yeah, especially in the U.S. market, just because of the way the financial model works. The government contribution toward farming shows up mostly in subsidized crop insurance. And so most farmers have crop insurance. And that means that if I have a bad crop year, I've got crop insurance as a safety net below me, and I'll have an average or an okay outcome. If someone a little ways away from me has a good year, they're able to recognize the higher prices and good profitability. So a safety net for the losers, essentially, if you want to call it that, and the winners get to participate. So North America, with their high participation rate in crop insurance, really makes the most out of a market like this. Okay. So there's a lot of questions and focus right now on what we might call early order programs or next season ordering, whatever you'd like to call it. Any updates for us relative to what you're seeing there? Very early days on our early order programs, relative to our competition, we do not have as many customers that sign up for early order programs, so it is not as great of an indicator for us. But some of our competitors have spoken about what they are seeing, and our trends are similar. We are seeing stronger early order programs, and we think that is just one more signal that in the U.S. market, there is enthusiasm in the marketplace. Okay. A Purdue index went up just a few days ago as well. Yeah Which is a sentiment index of farmers and view of the future health of the industry. So a lot of indicators are all pointing in the same direction. I am sure you saw the USDA upped the farm income number yesterday, albeit slightly, but at least it is going in the right direction. That is right. There is still the potential for another demand driver from biofuels. E15 all year round would be a really big stimulant. That is in the farm bill. If and when that passes, that could be a big boost or tailwind for farmers. Good. We are webcast here. I just want to give you an opportunity. Anything interesting that has come up since the second quarter call that you would like to call out, or how are we doing on third quarter outlook? Indira, would you like to take that? Yeah. I would say, as Eric alluded, we were at the Farm Progress Show. The positive sentiment in North America, we have not seen it in a couple of years. We had a pre-VIP event. There were 300 people. We closed deals. There is positivity in North America. The optimism is good. Brazil is a wait and watch. Farmers are waiting for that certainty out of the elections. They want to see more on farmer economics. They want to see some trade policy. Europe is in the middle. The grain rally, the timing of the grain rally, and where the European farmers sold their harvest was before the grain rally. There is also a little bit of farmer sentiment, cautious sentiment from the diesel and the fertilizer prices. The way we talked about it in our second quarter earnings call, in terms of Europe being flat, North America large ag being 15% lower, and Brazil 5%-10% lower, is still the right way to think about this. There is optimism in North America region, so it is kind of a mixed bag. Okay. All right, good. I think you alluded to the second quarter, you saw some weakness, I think, specifically in Germany, which maybe you hadn't expected. Has that proved to be sort of temporary, or is there more to it? In the second quarter, we saw Germany industry decline of 15%, even though AGCO, we grew market share. But the third quarter is more mostly a European shutdown for us with the production shutdown, dealers, farmers, it's kind of the Europe market comes to a still. So we'll find more in September, so we'll provide a better update with the third quarter earnings call. Okay. All right, good. So let's maybe zoom out a little bit and talk about some of the things you can control. So you've been focused on a number of growth initiatives that sort of are above and beyond the market, maybe just for this group, if you want to kind of highlight those, and we'll dig in a little bit as you do. Do you want to start? Yep. We've been on a transformation journey with our cost efficiency. From a billion dollars of SG&A, we've been working hard to rewire the business, and the trough was the best time to do it, to take cost out. By the time we exit 2026, we'll be upwards of $200 million in cost efficiency savings. That significantly improves our operating profitability leverage as we navigate and we get prepared for the upcycle. On the other hand, as tariff uncertainties are fluid these days, we are also laser-focused on finding cost actions in terms of our sourcing, in terms of our manufacturing footprint, manufacturing efficiencies, logistics. We are looking forward to all of this. These are all of the controllable actions, and we started ahead, and we are poised right for recovery. That's a lot of hard work on the bottom line. While at the same time, we're doing a lot of hard work on the top line. We've got our three growth levers that we've been talking about for several years, making progress on all three of them. The first one was taking our premium brand, Fendt, which is the best of the best products for the most demanding customers in the market, taking that from a European business to a global business, bringing it largely into North and South America. Gaining a lot of share again in North America this year. Our large ag portfolio is now up to 11%. We didn't even exist in the market five or six years ago. Making good sustainable progress in that growth vector through a few things. Great products. We've got the best products in the marketplace, highest technology, best support. Got the best support package in that we have a three-year bumper-to-bumper warranty, and our distribution model has been redesigned. We call it FarmerCore. Instead of having a brick-and-mortar model where the farmer has to come to a dealership to research their machine, get their parts, get their service, we turn that 180 degrees and say, We're going to remotely monitor all the equipment. We're going to provide digital connectivity in terms of being able to order parts online, service online, research a machine online, things like that. But then anything that we see in the farm, either maintenance or repairs, we proactively call the customer and say, How about we take care of that for you? Next Tuesday, it's going to rain. Let's come out Tuesday. They say, Great. We come out, we do all the work on the farm, and then once we maintain or repair our machine, we ask the farmer, What else can we help you with? And we can do about 85% of the maintenance and repairs on all the competitive equipment on that farm. Instead of the farmer coming to brick-and-mortar, we come to them. Instead of maintaining and repairing the product, we are maintaining and repairing the farm. It's a fundamentally different strategy than our competitors, and our average dealer in North America is already at 65% of their work is done on the farm, not at the shop. Our best dealers are at 75%. We want to keep pushing that, and we've only had this out two years. Those dealers that are on the front edge of this have a Net Promoter Score, which is our customers' feedback on how they like the experience, 4.5 points higher than the others. Our dealers have 1.5 points market share than those that haven't been adopting it as much. Customers like it. Dealers like it. They're adopting it aggressively. I talked about the North American numbers. South America is just the same. From 2024 to 2025, South America service truck adoption went up almost 30%. By the end of 2026, it'll be off that base, it'll be up about 40%. Both dealer organizations are moving forward quickly. The customers, once they experience this whole different way of working, really appreciate it. That's topic number one of growing our Fendt business through products and a different distribution. Number two is our PTx business, Precision Technologies Multiply. We are the largest precision ag business in the world, about $900 million in revenue today. We've had about six acquisitions we've put together. Once again, we're doing this business differently than anybody else. There's a part where we put that technology on our machines, and that's all completed. There's a part where we sell to other OEMs. We have about 100 other OEMs that buy directly from us, the technology, and they put it on their machines. The real difference is on what we call retrofit, where we have a whole separate dealer channel that these dealers don't sell tractors and combines and sprayers. They only sell retrofit technology. What that means is they'll go out to a farmer who's got a five-year-old competitive planter of one brand or a seven-year-old competitive sprayer of another brand, and upgrade that machine with new automated feature and giving that existing machine new life, new capability, ability to do something in a smart way. That whole retrofit business is a payback for the farmer about one to two years. It's a way lower cost way to get the latest technology than buying a new machine. High growth, high margin, and one that is less cyclical. We see that only dropping about a third as much as the regular OEM business. That's number two. Our third one is parts and service business, moving that from a reactive to a proactive business, and anticipating when the customers are going to need through remote monitoring, rapidly growing our e-commerce business and so on. Those three growth drivers are also all hitting nicely and driving a higher margin business where our margins in this business cycle are twice what they were in the last business cycle. Our business at the trough now is performing like the last cycle at the peak, and we've made commitments to get to 14%-15% margins by 2029 through these growth levers and the cost savings that Indira talked about. Great. So maybe let's dig in a little bit to those. When you talk about the FarmerCore project, when we talk about that with some other players in the industry, they say, Well, we have trucks, too. What's the big deal? So what's the big deal? Well, the big deal is what's the priority, what's the focus? All dealers had some remote service fleets, but their predominant asset base was fixed brick-and-mortar assets, and the predominant mode was bringing the customer to the dealership. Our predominant mode is to do all the work on the farm. These are heavy service trucks that can pull an engine, do a transmission, do all the electronic diagnostics. They can do everything. They can weld. They can do everything out on the farm. Our whole mindset is everything gets done on the farm, and the other piece is mixed fleet. Our competitors just do not operate that way. Our technology strategy is mixed fleet, our distribution support strategy is mixed fleet, and our data platform, which we may be able to talk about later, is mixed fleet. The ability to take data off of all these machines from any brand, have the farmer analyze their farm, and then send data back, a task file back to any of the machines, regardless of brand. The whole business is set up in kind of a symbiotic way where we're managing the entire farm regardless of how it's constructed across the mixed fleet, which is fundamentally different than how the rest of the industry operates. Okay. Fair enough. I guess less capital intensity for the dealer as well, right? Way more flexible. A brick-and-mortar operation is very fixed. It is a fixed cost, and it is fixed location. It is fixed everything. Whereas trucks, if the west side of the territory is hot for these couple of years, you focus over there. If the east side then becomes hot later on, you can bias over there. You can flex up and down more easily. The technicians like it because they can operate right out of their home. They do not have to come into the office every day. It is something that customers really like. Dealers like the asset efficiency, and we like it because of the strategic differentiation. Where are we with coverage now? Do you have enough trucks? Do you have enough dealers? Is there still work to do there? Coverage is good. Our large ag coverage in North America is over 80%, same thing in South America. We are really working on penetration. One other thing we did this year is we worked with our biggest dealers and said, You have got to step up your game in terms of performance. We have invested heavily in redesigning all of these products for Fendt, and you have got the best of the best products now. Then we invested over $2 billion in our tech business to give you a data platform that is a mixed fleet and cutting-edge technology that is in place. We have invested in the service parts business where we have got the top performing, better than any other competitor on parts fill rate. When you want a part, it is there for you. All of these investments are done, they are working, and in some of our big dealers, they had still low market share. We said, This is a line in the sand time. You have got to step up your game, and actually, you are going to lose some of your territory. Depending on how you react to this conversation, you are going to lose a little bit or you are going to lose a lot. They all had to come up with a plan about increasing the number of salespeople they had and trucks and parts drop boxes and all these types of things, increase their training, and they all reacted. They said, This is something we do not want to lose. They lost a little bit of their territory. We gave that to the adjacent dealers that were performing better. So it is kind of a we all got to perform higher now that we have been making these investments. We have got to make them pay off. Great. Let us switch to PTx because you mentioned that the aftermarket piece of that business is kind of the sharp end of the spear. Given sort of the weakness in the cycle, what are you seeing specifically there? Well, we are investing right down through the. As this market has been cooling off, we have been going full speed ahead on innovation. We launched 14 products last year, 12 products this year. The innovation engine is really cranking. What you think about first is modules, tech modules that go onto an existing machine to make it have new capability. That is the core of our business. But the other big investment is on data platform. There are two of them, FarmENGAGE for machinery management and Panorama to manage a farmer's agronomic data, like as planted, as sprayed, what their harvest data is, those types of things. Those two data platforms work with any brand of equipment, inbound or outbound data. The innovation engine is going very well. Probably the long pole in the tent is building out this unique channel. We have said that, unlike any other competitor, we are creating this set of dealers that that is all they do is sell retrofit technology, and that takes some time. Because what we inherited was a whole coverage of global dealers for Precision Planting and a whole coverage of global dealers for Trimble. They laid on top of each other, but the puzzles did not line up. You have to go in area by area and have conversations with a few different business people to say, Hey, what can we do in this area? How do we merge you together so that you become what we call a PTx elite dealer? The elite dealer has the full portfolio. Everything that Precision Planting used to have, everything that Trimble used to have, they have it under one roof and selling it all and supporting it all very well. We have got about almost 90 of those in place now. That is about 50% of the global market covered. Our aim by the end of this year is to have about 120 of them established. That will be about 60% of the market covered. We add about another year or two to get that up above in the 80%- 90% of the market covered range. Because we cannot just snap our fingers. We have got to work through step by step, and every situation is different about who wants to grow, who may want to sell, who wants to merge, all that kind of stuff. It will take a little bit of time, but once it is done, we have got this innovation engine that is cranking out solutions to the toughest problems, all the way to full autonomy solutions. Combined with our own tech channel that is unique in the marketplace and a data platform to support it is going to be a very strong moat business that will grow to $2 billion. We have committed to growing this business to $2 billion by 2029. Okay, good. One question I get a lot, we will use the boilerplate from the Form 10-Ks. Some of your competitors are bigger and have more resources than you do. Yeah. How do you stay neck and neck from a technology perspective, and do you feel like you are? Well, if you just take a look over the last 10, 15 years, this question comes up often. You would say, Well, what is the result been? It is not so much what goes in the pipe, it is what comes out the pipe that matters. I would put our innovation team up against any in the industry. I think our team is more. We have committed with our strategy to say we are the most farmer-focused company in the industry. We spend more time right at the farm, understanding the pain points and innovating solutions, whether it be in product or data or in support to solve those solutions. So our mindset is very farmer-focused instead of being product-focused company. If you look at the results in ways of measuring innovations, first of all, we are upgrading, refreshing. We have got the best tractors. We are the planter expert, so our products have stayed fresh. When you look at the innovations, AE50 is the one in North America. We routinely win the most of those each year. We are the leader. Over the last five years, we have got the most awards of AE50. Same thing at Agritechnica. One of the competitors that spends multiples of what we spend has gotten zero to one or two of awards, and we get more like five to eight awards each year. So the industry recognizes the innovation muscle that we have and just the DNA inherent in the company, and that is what gives us so much confidence. We continue to invest. In PTx, we are investing 12% of sales on innovation. It is a tech company, so we are investing in it like a tech company. So I have no concerns about our ability to out-innovate our competitors. Okay And solve the biggest problems. You have a new executive in charge of that business now, with whom most of us are familiar. What are his marching orders here? What is going to delineate success from failure for him? Yeah. If you take a look, Damon Audia, who used to be the CFO, one of the brightest guys I've ever worked with. We've moved him into a business role, and we've been planning to do something like this for quite some time. That's why it was such an easy transition with Indira, because Indira has been getting ready for stepping into this role and is a natural, absolute great fit for being our next CFO. Damon's mission is to deliver on the strategy. There's no hard right or hard left turn. It's accelerating progress. The innovation engine is going well, keep fostering that. The talent we've retained, keep inspiring and firing them up, and then accelerate development on the channel. Grow our OEM partner base, but really make progress on closing out these PTx elite dealer conversions. Okay, good. The bottom line is deliver a high-margin business that's in the mid-20% operating margin. It's over 50% gross margin business, mid to high 20% with a $2 billion top line by 2029. The top line today is? About a little under $900 million. All right. But we are at 85% of the mid cycle. That $2 billion is a mid-cycle number, so we are a little bit apples and oranges there. If we were at mid-cycle with today's business, we would be over $1.1 billion, be $1.1 billion, $1.2 billion. Got it. Okay, good. So let us take a moment here. Does anyone have a question from the field? It is early. All right. Insufficient caffeination, I guess. But, I can keep going. Let us switch, again, a lot of focus on inventory levels, both new and used. Can you just take us around your key markets and let us know what you think the situation is? Go ahead, Indira. Since the start of the year, we've done a lot of work in managing our inventory levels down to our target sequentially. If we look at North America, our target is six, and at the end of second quarter we were below seven. We've made a lot of progress. One thing to highlight is our dealer inventory levels are forward-looking on 12 months of supply. As the industry comes down, we are working harder to make sure the dealer inventory levels are at target. When we talk about Brazil, South America, our target is three months, and we are at about three and a half months. One important thing to note there is when we started the year, the dealer inventory levels were more skewed on aged, older equipment. That was on the non-tractor side, the combines, sprayers, planters. We had to work through the year providing incentive programs that were targeted to help our dealers move that inventory. As we've gone through the year, the dealer inventory levels are getting to the normal level, but as we get closer to our targets, that pricing leverage improves for us because those discounts will start to moderate. We shift to Europe. Europe is where we talked about Germany as well. This is where it was accumulation of dealer sentiment, cautious dealer sentiment, cautious farmer sentiment. Our target is four months. Our dealer inventory level was three and a half months, so we were much below target. That shows that there's a healthy dealer channel level. In a mid to long term, that will help us with improvement, with kind of absorption once the industry is ready, once demand will pull through. Overall, we've done a lot of work. One of the things we want to highlight too is because this is a forward-looking number sequentially, if we look at units, we've made a lot of improvement to units in North America. North America just in second quarter in terms of units, that was a 7% reduction in units and that was largely led by large ag. A lot of work and we continue to stay very disciplined with our dealer inventory. We've grown North America share, we've protected our pricing while normalizing our dealer inventory level. That shows to the strength of that we sell on value, the farmers see value of our offering, and it's not as if we are loading the dealer channels or discounting. We are working our way through, and we've made substantial progress in 2026. What's your current view on production in the end of this year relative to retail demand? Are you back to even there? As we have worked through this year, North America, we were underproducing to retail by approximately 10%. We were underproducing in Brazil by about 15%. As those dealer inventory levels work to those target levels, the idea would be, the plan would be to produce to retail as we start 2027. What do you think the full 2026 underproduction is? I think it will be in the ballpark of the 10%-15% for the full year. If 2027 were flat sequentially, you would have that tailwind. We will have the tailwind. It is just not that industry lifting on us. That producing to retail will give us better volumes, will give us better absorption. With some of the market share gains we have had and protecting pricing and mix, all of this will set us up constructively in a different point for entry into 2027 as compared to when we entered 2026. Even if industry stays flat, there is more upside in terms of leverage for where we are. Great. You mentioned pricing a couple times in that answer, so let us dig in there as well. You have a global footprint and one that is a little different than others. Maybe first just talk about how tariffs are impacting you. Tariffs on a full year gross basis, it is about $115 million is what our tariffs were. In the second quarter, we did get refunds of approximately $20 million on IEEPA, so net fiscal year 2026 was about $95 million was our tariff headwind. Looking forward, I would say given the tariff environment now, we are watching Section 301, we are watching Canadian tariffs. I would say $100 million is still the baseline for us to look forward. One of the things that we do have to remind ourselves is we have done a lot of work on the tariffs. As I mentioned before, we are not looking to pass all of the tariffs to our farmers. That is not the prudent way to do it. This is where we go back to our cost base to say, What are we doing in terms of sourcing and manufacturing efficiency, logistics, supply chain? Layer it all over all of the OpEx efficiency work that we have done. Great. All right, one more chance from the field. Anybody? All right, great. There is a mic, so just hold on one second. I think I can do without. Can everybody hear me? Yeah, just a quick question on competition. How do you view competition from China on the low HP side of things? Is that something you are seeing globally? And is that a threat to your business from a medium to short or long-term standpoint? I'll just repeat it for the webcast. Yeah. The question is, how do you view competition from China, especially at the low end? Yeah. Two different answers. Is it here yet today? Not so strong. Are we paying a lot of attention to it? Absolutely, yes. We feel like Brazil is probably the most likely entry point. If you go down to Brazil and you look around at how many Chinese cars are already there, it's a market that is comfortable with that. And it's a focus area, it feels like, from the Chinese competition. But we're also seeing them trying to get into Europe as well. We're paying a lot of attention to that, looking at what we need to do with our cost structure and our value proposition to make sure that we shore up the position where they're most likely to enter. The typical playbook that we see companies like that using are coming with a much lower cost but not much lower performance. Still has a fair number of feature set. The challenge they're going to have to work through is in farming, it's a high-trust environment. What's the support network? Do you have on-site parts, and those types of things. What we've seen so far is that's their biggest struggle. The product will get there over time. It's the rest of the infrastructure that is, as challenging it is to take our Fendt brand, that is well-known, and bring it into North America and South America and grow. We have a full parts network, a full dealer organization, all of that. To bring a brand-new brand into a new market with no supply base, no parts network, no dealer organization, no support capabilities, it's not automatic. This will take some time, but we're not discounting it either. We're taking it very seriously. Great. Anyone else? All right. We have three minutes left, so this might not be fair, but there's been some change in your ownership structure, and that's allowed you to be more aggressive with share repurchases. I guess the meat of the question is share repurchase versus M&A. How are you thinking about capital allocation? Indira. In the second quarter, we did approximately $345 million in share repurchase. Ownership structure, you're referring to the fang in our neck, which was TAFE, who was also an activist shareholder, a larger shareholder. We've been able to come to an amicable settlement. When we do a share repurchase, they're required to proportionately participate. Out of the $345 million, $50 million was TAFE. When we think about capital allocation, it's always been a balanced framework for us. We want to continue to invest in our business to support that long-term growth and competitiveness. We want to be able to pursue targeted technology capabilities. Investment-grade balance sheet is important for us because it helps us navigate the down cycle while we can strategically invest when the opportunity shows up and return of capital to shareholders. When it comes to M&A, we are more biased towards technology capabilities that'll help us accelerate the PTx roadmap that Eric talked about that help us strengthen the data or the software layer. We look at M&A and share repurchase as not being mutually exclusive. It's the value of the opportunity set, and we'll continue to assess based on cash generation, liquidity, operating needs, and what leverage is. It's balanced, and we'll stay tuned. All right, good. With that, maybe we'll wrap up then. Thank you guys so much. Appreciate the insights, as always, and thanks everyone for your attention. Thanks, Steve. Thank you, Steve. Yeah. Thank you.