Hello, and welcome to the CNH Industrial second quarter call. My name is Judy, and I'll be the coordinator for today's event. Please note that this call is being recorded, and for the duration of the call, your lines will be in listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad at any time. If you require technical assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Noah Weiss, Head of Investor Relations, to begin today's conference. Thank you. Thank you, Judy. Good morning, and good afternoon to everyone. We would like to welcome to the webcast and conference call for CNH Industrial second quarter results for the period ending June 30, 2022. This call is being broadcast live on our website and is copyrighted by CNH Industrial. Any other use, recording, or transmission of any portion of this broadcast without the express written consent of CNH Industrial is strictly prohibited. Hosting today's call are CNH Industrial's CEO, Scott Wine, and CFO, Oddone Incisa. They will use the material available for download from the CNH Industrial website. Please note that any forward-looking statements we might be making during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement included in the presentation material. Additional information pertaining to factors that could cause actual results to differ materially is contained in the company's most recent 20-F and EU annual report, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission and the equivalent authorities in the Netherlands and Italy. The company presentation may include certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP financial measures, is included in the presentation material. I will now turn the call over to Scott. Thank you, Noah, and welcome to everyone joining our call. We finished the first half of 2022 with record second quarter revenues up 17.5% year-over-year in spite of a 3% currency headwind. I am proud of the team's resolute performance in the face of the dynamic and challenging global economic and geopolitical environment. Their efforts exemplify our commitment to meeting our agriculture and construction customers' needs as their customers depend on us to feed and house an ever-growing population. Our solid performance and even our optimistic near-term outlook contrast with the extremely precarious macro environment and a steady stream of recessionary signals. Whether we face a global recession in 2023 is up for debate, but we are preparing for this eventuality. It is worth noting, however, that historically we are more impacted by the Ag cycle than recessions. Soft commodities were down notably in the second quarter but have rebounded of late and remain at or above historic levels. Dealer sentiment and orders also remain positive. We generated an impressive double-digit Industrial Activities margin of almost 12%. Raw material, labor, and freight cost escalations are sadly familiar to us, but we are finally starting to see signs of their impact diminishing. During the second quarter, farmer sentiment deteriorated as increased pressure on the cost and availability of fertilizer and other inputs met an easing of soft commodity prices. The Ag cycle nonetheless still appears to have legs as our order backlog for new equipment continues to grow. We remain compelled to restrict order windows in order to consider future cost and availability issues. Supply chain constraints, while modestly improving, are a complex variable in our forecasting process, and they continued to hamper our production capacity in the second quarter. This elevated factory inventory was the primary driver of our $380 million year-over-year decrease in free cash flow. Thanks to our otherwise strong operating performance, we did generate more than $400 million in cash in the quarter and are confident we will deliver our full- year cash target by reducing plant inventory in the second half. Part of the solid progress we are making with the Raven integration involves completing the divestiture of their non-core divisions, including the sale of Aerostar business which we closed this week. The teams in Sioux Falls and Scottsdale are now completely dedicated to solving great challenges for our farming customers by coupling great technology with our great iron. Momentum remains strong entering the back half of the year, allowing us to reconfirm guidance while tightening up the bottom of the net sales range. Net sales for agriculture business were up 22% year-over-year on a constant currency basis as we sold a better mix of products at higher prices, particularly in North and South America. For the quarter, Derek Neilson and his Ag team drove pricing up 13%, again, more than offsetting rising costs, and we expect this dynamic to continue through the back half of the year. Our plants finished the quarter with far too many tractors and combines waiting for components. Reducing this fleet inventory in the second half will enable us to better serve our customers and improve our cash position. Dealer inventories of new equipment remain very lean, especially in North America for row crop machinery and in Europe, where supply constraints are most critical. While overall Ag demand remains strong, especially with high- horsepower tractors, we did begin to see diminishing demand in the hay and forage sector. Low- horsepower tractor demand is also starting to deteriorate after several strong years as the small hobby farmers who comprise this segment are beginning to plan for a tougher economic environment. Our overall tractor order book was up 5% year-over-year, driven by strong growth in EMEA and Asia- Pacific, and combine backlogs very healthy as well. We waited until the beginning of June to open orders so that we could secure the best pairing of cost and price. We also limited the window for orders only into the first quarter of 2023 for North America, and even shorter for Brazil, as inflation and cost volatility are complicating projections of future machinery pricing. Stefano Pampalone and his construction team continue to execute their impressive turnaround of our construction business. We closed the quarter with net sales at $ 891 million, up 12% on a constant currency basis, mainly driven by pricing, volumes in South America, and the addition of Sampierana in our business. Adjusted EBIT in the quarter was $34 million at a 3.8% margin, a continuous quarter-over-quarter improvement in line with the trajectory we outlined at our Capital Markets Day. The Sampierana acquisition is delivering ahead of plan and is playing a pivotal role in accelerating profitable growth in Europe, where we saw market share gains in all major product categories aside from large excavators. We are currently integrating the dealer networks and will be increasing Sampierana's manufacturing capacity to better support the light end of our excavator range. Order books continue to build up more than 20% year-over-year in both heavy and light, with increases in all regions excluding heavy equipment in APAC. In North America, our 2022 production slots are essentially sold out. On Tuesday, August 2nd, we'll be breaking new ground with the launch of a revolutionary new product that will create its own category within the construction market. All I'm allowed to say for now is that this unique machine combines ripping, dozing, and loading functionality, and we are very excited to deliver it to our customers. While we continue to make substantive progress across all of our five strategic priorities, today I wanna highlight some notable advancements in brand and dealer strength. Scott Harris and Carlo Lambro, global brand leaders for Case IH and New Holland, respectively, are developing joint product and go-to-market plans, which are engendering cooperation and coordination between the two brands. This work is inspired by dealers and employees and also investors, and it is rewarding to see it coming to fruition. Early efforts include complementary product, network, and programming decisions, all designed to strengthen our dealer network and enhance customer support and experience across the company. We are leveraging our broad knowledge base and channel partnerships to improve areas such as service standards, warranty procedures, and performance expectations. The truly meaningful change here is effective cooperation, which is positioning our network, our brands, and ultimately our company to win. Our Net Promoter Score, which has increased over 3% in the first six months of 2022, attests to our progress. All of this is forging a clear path to profitable growth while simultaneously improving dealer engagement and ultimately customer satisfaction. These same benefits accrue from Titan Machinery's recently announced acquisition of Heartland Ag Systems. Heartland is the largest Case IH application equipment distributorship in North America. With customer-inspired innovation accelerating across our sprayer portfolio, this transaction should unlock value for all stakeholders. We made a related acquisition with the acquisition of Specialty Enterprises, North America's largest premium aluminum spray boom manufacturer. Specialty is known for its advanced engineering and high-quality workmanship as a world-class aluminum welding operation. The direct ownership of spray boom production is the latest step in Case IH's strategic roadmap for our industry-leading sprayer production platform. As the company works to enhance its application product offering, the inclusion of longer, lighter booms enables the accelerated development and deployment of new technologies. I will now turn the call over to Oddone to take us through some of the key financial results. Thank you, Scott, and good morning, good afternoon to everyone in the call. Second quarter net sales of Industrial Activities of $5.6 billion were up 17.5% year-over-year, despite FX headwinds of around 3%. Pricing was the main driver for our growth for the top line as volume and mix accounted for around 5%. Adjusted gross profit of $1.2 billion was up $174 million year-over-year as pricing once again helps surmount even increasing production costs. With margin of 22%, only slightly down in the quarter versus 2021, we're at par with last year for the first half of 22.1%. Adjusted EBIT of $654 million, up $82 million from Q2 2021, with a corresponding EBIT margin of 11.7%, down 30 basis points versus record second quarter last year. Free cash flow from Industrial Activities was $404 million and Industrial Activities net debt ended at $1.6 billion, an increase of $438 million from December 31, 2021, largely due to working capital absorption in the first half of the year. Adjusted net income for the quarter was $ 583 million, with adjusted diluted earnings per share of $ 0.43, up $ 0.06 on the back of the better operating performance. At the end of June 2022, our available liquidity stood at $ 8.8 billion, down $ 1.7 billion from December 31, 2021, as we grew our financing portfolios and the euro/dollar exchange played negatively on credit lines denominated in euros. On slide 8, we have the details of Industrial Activities adjusted EBIT performance. In both segments, we see that volume and mix were positive, while the higher pricing, again this quarter, was able to offset the remarkable increase in production costs. The G&A variance reflects increased activity levels and the cost carried by the newly acquired businesses. R&D expenses increase as we are investing more in our Precision Ag portfolio. Agriculture's adjusted EBIT increased by $81 million with a margin of 14%, driven by favorable mix and price realization, in particular from the Americas, partially offset by higher production costs and growing R&D expenses. Gross profit was up $150 million from the same quarter last year, with adjusted gross margin of 23.4%. Construction equipment EBIT was $34 million with a margin of 3.8%, up 80 basis points versus last year, thanks to favorable volume and mix and positive price realization, only partially offset by the higher production cost. Gross margin stood at 13.8%, up 140 basis points despite increased costs in the quarter. For our financial service businesses, net income was $95 million, up $10 million compared to the second quarter last year, mainly as a result of higher recoveries on used equipment sales and higher average portfolio in all regions. These were partially offset by income taxes and higher risk costs, reflecting the growth of the credit portfolio. For the quarter, retail originations were $2.4 billion and the managed portfolio, including JVs at the end of the period, was $21.1 billion, up $1.7 billion at a constant currency basis. Delinquencies were flat year-over-year at 1.5% and remain at historically low level. Next, on slide 10, we have the free cash flow and net financial position performance for our Industrial Activities. Free cash flow of Industrial Activities was $ 404 million on the back of the strong operating performance. Working capital build up is mainly due to inventory growth in our plants, where at the end of June, we continue having elevated levels of components and semi-finished goods as our production is constrained by choppy supply chain. Total gross debt was $ 20.8 billion at June 30, and Industrial Activities net debt position was $ 1.6 billion. Moving to our capital allocation priorities, we continued spending in CapEx and R&D to foster our equipment and digital product pipeline. Gross debt was stable in Q2 compared to last quarter, supported by a sound cash flow from operations and funds from the sales of Raven Engineered Films, offset partially by the payment of our annual dividend. During the quarter, the company returned over $400 million in buybacks and dividends. Share acquisitions continued through the month of July under the share buyback program announced on March 1. The board approved the setup of an additional program for up to $300 million within the shareholders authorization renewed in April to buy back up to 10% of our outstanding shares. In terms of inorganic growth, as Scott mentioned at the outset of the call, we have completed the divestiture of the non-core Raven businesses. In addition, during the quarter, we acquired Specialty Enterprises, North America's largest manufacturer of premium aluminum spray booms, and we continue scouting for opportunities. This concludes my prepared remarks, and I will now turn back to Scott. Thanks, Oddone. While there are plenty of storm clouds on the horizon, we still like to set up for Ag. We expect global industry demand to remain healthy with the supportive backdrop of low soft commodity stock levels, positive grain and oil seed prices, and aging fleets. Row crop commodity prices are down, but they remain volatile and mostly positive compared to the historical mean. There are two notable changes to the 2022 Ag industry demand estimate we issued in May. First, we have reduced our expectation for low- horsepower tractors in North America due to the aforementioned weakness in the end markets following a strong couple of years. We have decreased our projection for EMEA tractor demand because of the impact of the Russia-Ukraine conflict and the currency devaluation in Turkey. Our construction equipment estimates have also been updated to reflect improvement in the rest of the EMEA region, while APAC is now expected to be a bit worse. We are seeing some softness in North America residential, while commercial construction remains strong. In Brazil, election year spending is exceeding expectation, although it's somewhat offset by higher interest rates. While risks are persistent and unlikely to wane, we are confirming our 2022 guidance for Industrial Activities. We have narrowed the bottom end of our range and now expect full- year net sales to grow between 12% and 14%, including currency translation, which has been reset to a less favorable level. We will continue to invest to improve our business, but expect to keep SG&A at or below 7.5% of net sales, one of the leanest ratios in the industry. Free cash flow for Industrial Activities is expected to exceed $1 billion again. R&D and CapEx will be approximately $1.4 billion combined spend for the year. Supply chain and logistics challenges remain the fulcrum on which our short-term results pivot. We managed our urgent freight costs better in the second quarter, and we are starting to see these pressures ease somewhat. There could be more relief in the second half, though raw material costs will continue to restrain profitability. The many ramifications of the war in Ukraine have had many significant impacts on our European operations, but less so on demand. We are working diligently to mitigate energy and supply chain challenges to ensure we can properly serve our dealers and customers. Pricing should be stronger in Europe in the second half, and that, along with improving production, should support better margins in the region. Our order books remain strong and dealer inventories are low. We intend to somewhat replenish our dealer channels over the next 12 months, but the stock levels will be well south of where they were in the last cycle. In early May, the United Auto Workers initiated a strike at our Racine, Wisconsin, and Burlington, Iowa, facilities. We've made a fair and equitable offer to resolve the strike and very much want to have our workers back in our plants for us and for their families. We have consistently maintained our willingness to meet and are pleased that the union has agreed to resume negotiations in mid-August. To support our dealers and customers, we implemented mitigation efforts to keep both facilities operational. We are making good progress and production continues to improve, but our main goal is still to resolve this ongoing dispute as soon as possible. In the second half, we'll be launching our strategic sourcing program at two supplier conventions to be held in Milan and Nashville. These events will invite current and future suppliers to partner with us as we build a more efficient, productive, and responsive supply chain over the next several years. Raven and our precision team are making great strides in helping to drive agriculture's growth. We will highlight some of our new work next month at Farm Progress, and in December, we'll be holding a Tech Day to showcase current and future products and services. That concludes our prepared remarks. We'll now open the line for questions. Judy, please go ahead. Thank you so much. As a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypad. You'll then be advised when you can ask your question. Again, it is star one on your telephone keypad to ask a question. The first question is coming from the line of Michael Feniger from Bank of America. Your line is unmuted, and you may go ahead. Hey, yes, thanks for taking my question. I guess just on the implied second half, if I look, I mean, Ag pricing in Q1 was really strong, 11%, I believe. I think it actually picked up in the second quarter to 13%. You said it should trend well in the second half. How should we think about that with the deceleration in the second half on the growth outlook on a year-over-year basis? Hopefully, you kind of help us frame that. Well, there's a couple of factors that you need to consider. First of all, implied in that is a lower currency rate with the dollar and the euro, which will have a several hundred million dollar impact. That brings a little bit of it down. Pricing will still be double digits, but slightly less than, so that brings a little bit more. You know, then we're still just. I wouldn't say hedging, but we're cautious about what we can get out of our supply chain. I mean, it is still. I mean, I did say, and I meant it. It's improving, but it's precarious. You know, obviously we're being. I would say prudent and understanding what we can do. The primary factors are adjusting for a stronger dollar and slightly less pricing, but still very strong. Okay. Just, you know, with pricing where it is, some of the improvements like you mentioned, obviously on the supply chain. Like, is incremental operating margins on the Ag for next year, at least could we see that normalize in the 20%-25% range? I guess, you know, how much of this pricing do you think is sticky as we enter next year when hopefully some of the supply constraints should be easing and less cost pressure? Thank you. Well, yeah, we think that the margin will be normalizing. Of course, we have been very strong on pricing year-over-year, and also to cover the cost. We still have very lean dealer inventories. There's still strong demand. We will follow very closely what happens there, but we don't plan in giving up our margins. This is one of our key goals for our three-year plan, keeping gross margin up or increasing. Okay, thank you for your question. The next question comes from the line of Steven Fisher from UBS. Your line is unmuted, and you may go ahead. Great, thanks. Good morning, good afternoon. In your comments, you said you're positioning for a recession. I'm curious what that means in practical terms. How do you see a recession affecting your business? What actions are you taking to kind of prepare for that? Yeah. Well, Steven, I said in the remarks that, you know, we were anticipating that, but the business was also much more correlated to the Ag cycle than we are to the recession. We're not, you know, turning out all the lights and everything else. We are being prudent with our hiring practices. Obviously, you know, we're still, you know, in the effort to improve our tech stack, we're still recruiting, you know, engineers as quickly as we possibly can. We're also being, you know, managing somewhat cautiously, you know, how we're spending our SG&A, where we're making our. We're still spending a tremendous amount on research and development, and I don't think there's any environment that's gonna take us off that. We're just not gonna make the discretionary spends, whether it could be travel, but again, mostly it's just being careful with hiring and just overall what we spend as we think about a more difficult environment. Again, the setup near term and probably for the first half of 2023 for the Ag business is still quite good. Okay, that makes sense. One practical question related to the stock in terms of the listing, and I think you've talked in the past about potentially taking actions to kind of move towards filing U.S. statements and, you know, shifting focus to the U.S. listing. Can you give us, you know, your latest thinking there that, you know, the stock's definitely had some perhaps extra volatility this year, related to European trading. Just kind of curious what you're thinking about there now. You know, we're still studying it. You know, obviously with the divestiture or spin-off of the Iveco Group, we know we have a much less of a significant presence. We still have a very large presence. Remember, our revenue still splits essentially 37%-37% between the two regions, North America and Europe. You know, which it is, there's good arguments for it, and there's good arguments against it. We're gonna weigh all of those and make a decision, but no decisions as of yet. Okay. Just lastly, if I can, quick clarification, perhaps for Oddone Incisa. On the overall revenue guidance, I think, Scott, you might have said several hundred million dollars of currency difference. Just kind of trying to figure out what in practical terms this means for, you know, what the overall volume and price is that's embedded in the guidance for this year. Were we thinking before that it was somewhere kind of in the mid-teens and now it's kind of closer to the low 20s area? Is that how we should be thinking about what this currency and guidance change means? We moved in our expectation the euro dollar from 1.10 we had last quarter to 1.05, which basically implies that we are assuming the dollar euro dollar staying at parity from now to year-end. This creates the translation of our European volume in particular to come to a lower level. We expect the headwinds coming from effects for the second part of the year to be between 4% and 5%, probably closer to the 5% to the 4%. Within, as Scott say, we assume continue having double-digit pricing to last year in the second half. The balance of it is a volume assumption, which is somehow softened by risks that we may have, we still have in supply chain. still positive volume overall, I assume. Still positive, yeah. Yep. Yeah. Okay. Thanks very much. You're welcome. Thank you for your question. The next question is coming from the line of Kristen Owen from Oppenheimer. Your line is unmuted, and you may go ahead. Great. Thank you. Good morning. Good afternoon. Wanted to follow up on your comment about building dealer inventories modestly over the next 12 months. Just give us a sense of how much you feel like the supply chain can support in dealer inventory build and how we should think about sort of production cadence moving through the second half of the year. Yeah. Well, you know, that we actually had a reasonable internal debate about what timeframe to put on building dealer inventory because it is uncertain. You know, I mentioned in my prepared remarks that, you know, the supply chain is the fulcrum that manages our results. It really, it's getting better. I hate to say it because it's so brutal. A slight improvement doesn't make it good at all. You know, we're still, you know, mindful and watching that. When I meet with dealers, and I have recently, their biggest request is for more shipments, and that's what they want from us. That's what we're trying to deliver. You know, the third quarter probably won't make any progress with inventories, I don't think. In the fourth quarter, I mean, as we continue to make more progress and we see a little bit easing in the supply chain, you know, we should be able to start towards the end of the year, improving the dealer stocks a little bit, and then we'll see what happens in 2023. That still remains getting product availability and even allocation where we're constraining it is still the biggest concern from our dealer network. A somewhat related question, you know, the cash flow guidance of greater than $1 billion in Industrial Activities, obviously a pretty healthy swing in the second half of the year. Can you just help us understand how much excess inventory you expect to end the year with? Maybe talk about the mix of the inventory as it stands today. What's sort of red tag, what's elevated raw materials? Just any incremental color you can provide there would be helpful. Thank you. Yeah, I would say the majority of our inventory today is in the plants as opposed to finished goods. That's a combination of raw and semi-finished goods, so what we call fleet, which has been built, assembled, but waiting for missing components, and other components, and raw material and work in process. That we expect to recover significantly out of it in the second half of the year, and that what will have the main contribution to the cash flow for the second half, of course, with continued strong generation from the operating performance from the adjusted EBIT. Thank you so much. Thank you for your questions. The next question is coming from the line of David Raso from Evercore ISI. Your line is unmuted, and you may go ahead. Hi. Thank you very much. My question's about the order book for 2023. When do you believe you'll open the order book beyond 1Q23, and what are the key metrics you're looking for to get comfortable to open that up? Thank you. Thanks, David. We are probably gonna open that up. I would say the late part of the third quarter, early part of the fourth quarter. The variables that we're watching is just, you know, this damn inflation was supposed to be transitory, is what they told us, and then, you know, it continued to spike. We are seeing, I think, a peak in inflation. I don't know that that's the case, but, you know, that's what we're watching for now. If that's true, you know, the pricing that we've got should be reasonable. But, you know, we've got to. We can't take the risk to our P&L or to our dealers by getting this wrong. I would just. I think, you know, by the time we get, you know, three months from now and then into the fourth quarter, we'll have a better view. We'll take that timeframe, whether we open it up for the rest of all of 2023 or through the first quarter. I mean, we're just keeping a variable view on this thing just because it remains, while again slightly improving, but remains very volatile. The input costs that do appear to be coming down, when can we expect that to hit your P&L? I'm just curious, anything, you have any hedges you have on or anything regarding logistics? Just so we have a better sense of when we do see the order book open, whatever we hear on pricing, trying to think through what your cost could be relative to that pricing. It takes some time, David, as you can imagine, to flow into the P&L. Of course, I mean, logistics costs, expedite freight, that will come earlier on. The cost of the raw materials will take more time to come in. Actually, we're not seeing yet. Yeah. on the spot. Like, say even the first quarter, like what's already in the backlog that'll ship in the first quarter, some of these orders for first quarter, could they be beneficiaries of some of these costs coming down? I mean, that is still, you know, six to nine months away. I'm just trying to get a sense of that, especially the first quarter and then when you make the decision for beyond. I would assume within six to nine months, some of these lower input costs could flow through by early 2023. Yeah. Is that fair? That's a fair assumption. Last quick question is level set. I know you're not giving the gross margin guidance, right? But can you just give us a sense of how much your gross margin target for 2022 changed in the last three months? It didn't change. It didn't. Okay. Thank you very much. You're welcome. Thank you for your questions. The next question is coming from the line of Dillon Cumming from Morgan Stanley. Your line is now unmuted, and you may go ahead. Great. Good morning. Thanks for the question. Just wanted to check in on the European side of the portfolio. I think, Scott, you mentioned that it, kind of the order trends have been holding up a bit better in the context of all the geopolitical dynamics over there. Just kind of curious if you could reconcile some of the deterioration we've seen and some of the sentiment indices we've seen in recent months, and maybe square that away versus what you've been seeing in your own order book. Yeah. Well, I think, you know, the sentiment is. I'm not even gonna comment on the sentiment because we can all read the newspaper and know exactly what's going on. But I will tell you that, because of the supply constraints, our dealer inventories in Europe are leaner than they are in other regions. You know, the Ag sector continues to do quite well. In fact, you know, even in Ukraine, we've been able to support them to have reasonable farm equipment usage this year. It is the demand side, I think. I actually had this in my prepared remarks. I mean, the demand side has not been as impacted at all, as has the production side and the overall industrial economy. You know, the Ag segment in Europe is reasonably good, and then that's reflected in our order book. Gotcha. That's helpful. Maybe just a longer- term question. You know, in November, you guys are gonna have Raven under your belt for about a year, I think. Just in terms of how you've been integrating that, in terms of like what you're rolling in the new model year kind of product portfolio. Just curious if you can kind of provide an update around, you know, what the levels of uptake are around some of the major technologies, how that integration is going more broadly, and how you've kind of been integrating that portfolio into your base models. Yeah. Well, you know, I would say I can't describe any other than we're just thrilled with what that Raven team is doing for us. You know, it was you know, difficult because you know, they had operated as one business and there was a couple of divisions that you know, certainly are gonna be better off with different owners and you know, we were able to complete those transactions. That was a bit of a distraction. Overall, you know, what Parag Garg and Dan Prestemon and that team are doing to really just inspire customer- focused innovation. You know what? Derek Neilson is really driving them to understand, you know, how can we most quickly and most effectively bring precision and autonomy capability to our farmers and growers. I think, as I said in my remarks, you know, we'll display a little bit of that at Farm Progress. You can see how we're working. We've got a real Tech Day coming up in early December in Arizona where we'll be more forthright. You know, the Raven, the demand we're seeing for the core Raven product, I mean, one of the benefits of the integration is how much we can help them with supply chain to accelerate the output, you know, when the demand for their core products. Really it, as we've tried to communicate, it's about getting the tech stack right. I just can't say enough about how important the Raven team and their ability to solve great challenges is to us helping us do that as quickly as we possibly can. You know, financially and strategically it's ahead of where we need it to be. There's a lot of work to do to capture the value for our customers that we expect. Got it. Great to hear. Thanks for the time. Thank you so much, Dillon, for your question. The next question is coming from the line of Larry DeMaria from William Blair. Your line is unmuted and you may go ahead. Hey, thanks. Good morning. Hey, I just wanna get a clarification on the early order program. Can you just give us a handle on, I know we're selling into one cube, but there's other products and stuff in there. How did that trend from, you know, June to July, and what would that be up year-over-year? 'Cause I don't think that corresponds to the up 5% tractor order book, but maybe it does. Can you just clarify that please? Larry, we didn't hear you very well, but I think you were talking about the order book and the trend in the orders. Yeah, I'm talking about the trend in the order. Yeah. In the early order program. Yeah. The order program is doing very well. The difference to last year is that our order program is limited in time, right? We don't have an open order book, but we allowed our dealers to order with allotment that will cover the production through the first quarter of next year, but in North America, we're not extending it over yet. That makes the growth of the order book less impressive than it has been in previous quarters. Still, we have an order book which is more than three times higher than what it was pre-pandemic. Okay. That's very helpful. Thank you. A second question, if I may. The North America dealer consolidation is ongoing. Obviously you're trying to reduce some channel conflict. Where are we in the reduction of the channel conflict, and how much of a headwind do you think that has been with the inability to bundle product broadly? No, I don't know. We're actually encouraged by our dealer network now. I mean, it's incorrect to assume that there's a massive dealer reduction effort. What there is a very concerted effort to be more strategic and thoughtful about how our dealers interact between the two brands. As I talked about in my prepared remarks, we're really encouraged by what Scott Harris and Carlo Lambro are doing to drive these brands to see how we can serve the communities and farmers better together as opposed to you know. We competed for a long time, and I think our dealer network reflected that competition. Now we're looking at how can we leverage, you know, these two great historic brands to bring more value to, you know, everybody in all of the various stakeholders. You know, we're seeing early signs of that. There's work to do, but the work is not to, you know, take out a bunch of dealers. It's really about to make the experience that we can provide for our dealers better and ultimately, you know, serve our respective customers. The acquisition that Titan made of Heartland Ag was a good example of, you know, how things can be cleaned up. You know, that was a different distributor model than the rest of our network. You know, now I think Titan can make that, you know, with working closely with us, but they can make it, our sprayer business more consistent for all of our customers, and I think that's better for everyone. You'll see us make moves like that, but don't expect a 20% down or 30% down in dealer count. That's not the strategy. Okay. Thank you, Scott. Thank you, Larry, for your questions. The next question is coming from the line of Nicole DeBlase from Deutsche Bank. Your line is unmuted and you may go ahead. Yeah, thanks. Good morning, guys. Morning. Maybe we could start with just margin. I guess maybe we could talk about like the puts and takes into the second half. It feels to me that price cost should be improving if you look at it on a year-on-year basis. There is the impetus for margins to, you know, continue to grow year-on-year, but any thoughts you guys have would be really helpful. Yeah, I mean, we expect margins. As I said, we don't see a change in our margin outlook, compared to what we had before, right? We keep pricing, and we keep having costs coming up, incremental compared to what we had last year. That relationship will still be there. We still want to have pricing at least at the level of the cost increase, and we're confident we can get there. Dollar amount will be higher for sure, and that's how we are working too. Okay. Got it. Thank you. I guess maybe, Scott, could you elaborate a little bit on what you're seeing with the supply chain? I haven't heard a ton of instances of companies saying that things are getting better so far, although it's obviously been really mixed on a company- by- company basis. Is that chips? Would just love to hear a little bit more about what you're seeing. I mean, let me be careful to clarify that. I mean, when we say getting better, it is very, very modestly better, but it's been so much just getting worse consistently, a slight improvement. Again, we're seeing it in, you know, some of the expedited freight costs. Again, as we get better at managing it, but the overall, you know, costs coming down is, we've seen, you know, some oil drop off of late. Really it's just the supply chain in general getting a lot better. I mean, at this time a year ago, we were, I mean, panicked about semiconductors and we're less so now. We still have to manage it, but I would say it's not dramatically better, but we're seeing a little bit of improvement and I'm not saying it's tipping, you know, it's gonna revert back to the mean anytime soon, but it's slightly better than it was. Understood. Thanks. I'll pass it on. Thank you for your question. The next question is coming from the line of Tami Zakaria from JP Morgan. Your line is unmuted, and you may go ahead. Hi. Good morning. Thank you so much for taking my questions. Most of my questions have actually been asked, so I had a couple of quick ones. Input prices like still are coming down, so can you remind us at what lag you expect this to benefit your P&L, assuming prices hold or go down further? We see input price going, stabilizing, I would say, more than going down. We don't expect that to have a huge impact this year. Where we expect to have some tailwinds or some improvement this year compared to last year is on some of the logistics costs and hopefully also on some of the costs in our production costs in our plant, which have been due to reworks and to all of the complications that we have had in recent quarters. You will see the input Got it. Yeah, go ahead. Sorry. I was meaning like when do we expect that to more earnestly flow through? Like, is it more like in the back half or starts early next year? I would say more next year than this year. Not necessarily early next year. Got it. Okay. My second question is, do you have any updates on any upcoming product launches through Raven in the next 12-24 months, if there's any new update at all on that front? No, it's not generally our practice to talk about new product launches, although I did kind of hint at a new, construction equipment, product rolling out next month. You know, if you have a chance to get down to Iowa and see Farm Progress, you'll see a perfect example of how our teams between, you know, Case IH and Raven can work together to bring really good innovation to market. You know, we'll elevate that again, in December with our Tech Day. I think Farm Progress will be a good example of just one type of product where we can really bring, you know, best- in- class innovation to the market. Got it. Perfect. Thank you. Looking forward to seeing you all in Iowa. Thank you. Thank you so much for your question. The final question for today is coming from the line of François Robillard from Intermonte. Your line is unmuted, and you may go ahead. Hi. Good morning. Good afternoon, everyone, and thank you for taking my questions. Most of my questions were asked also, so just a couple of follow-ups on the second quarter numbers. Given the market trends that were broadly negative retail market trend in the second quarter, can you just give us some more color between volume and mix in your second quarter figures and then consequentially also for your second half implicit expectations? Yeah, just clearer split between volume and mix. Thank you. Yeah. I guess we should probably be clear. What’s happening in this market is what we sell from a mix perspective is literally what we can produce. I mean, I wish I could say it was about us managing mix or something else. It’s just what we can get out of our factories. You know, that there’s a lot of variabilities that I think we’ve talked about enough today when that happens. Our mix has been okay, and we expect the second half, you know. Actually, it’s the third quarter. You know, as we get more combine shipments coming out, we should, you know, continue to have reasonable mix. Everything from a mix standpoint is just based on, you know, what we can get out of our factories. Nothing that we're strategically trying to do. Okay. Thank you. Also on the Sampierana acquisition, can you give us just a hint of the Sampierana contribution in the second quarter, first half, and once again, second half of the year? Thank you. Yeah, I don't think we're gonna give you a specific number of what they're contributing, but you know, we've got a profitable construction business in Europe for the first time and you know, that's certainly enhanced by what Sampierana is doing. We're ramping up their capacity quite quickly. You know, their innovation focus is also a huge boost to us. You know, we're encouraged. We're well ahead of our financial forecast we used to acquire the business, and we continue to see a positive outlook there as we ramp up capacity capability. Again, the innovation that they're bringing to that, the mini and midi excavator market for us is quite impressive. You know, all in all, very positive what we're seeing early. You know, we think that light segment is important for us in Europe and just important for our business overall. Thank you very much. Thank you so much for your question. The final question is coming from the line of Daniela Costa from Goldman Sachs. Your line is unmuted, and you may go ahead. Hi. Good afternoon. Thank you for fitting me in. I was having some technical trouble. Two questions, hopefully quick. The first one is regarding sort of all the risks around energy that we are seeing in Europe, and particularly, I guess, because your products use a lot of steel and metal, and energy could impact those suppliers. How are you mitigating for that? How significant is your production in Europe? Does it kind of match your sales? If you could talk about the risks potentially emerging from that or the lack of them. The second question, just regarding, I think in past calls, you have said that like with Raven, you were 80% where you would like to be in terms of Precision Ag to match your larger competitor. Can you talk about sort of M&A outlook from here? You did a few small things. I guess multiples are also coming lower. How much more extra inorganic ideally would you need to close the gaps fully with Deere? Thank you. Well, I will tell you that we are spending a lot of energy on, pardon the pun, energy, trying to understand the impact of gas availability and overall energy availability in Europe. You know, I think we probably mentioned earlier in the year. I mean, we had an almost freak out situation with foundries when the Ukraine situation first became on the market because, you know, foundries were shutting down, and we couldn't get, you know, some of the product out. We took some efforts there. We've learned from that. Importantly, you know, we have significant manufacturing presence in Europe, but none in Germany. I would think, you know, Germany's been the hardest hit of the regions, and Italy's got some impact. You know, what we've found, because we have a little bit of time, is that we're not impacted by Germany, which is the biggest risk. We can mitigate it by moving things around between factories, finding other sources. We've got long-term contracts for some of our electricity sources, so that does help us. Overall, you know, we're watching it closely, but I think, you know, vis-à-vis others, you know, we have less exposure in the markets that are most impacted from that. As far as Raven, you know, again, I'm elated with what that team is doing for us in the short term. It's a journey. I mean, it's not like, you know, we. You know, I talk about plug and play, and there's a lot of plug and play capability here, but there's also just a lot of work to be done. So we've got a couple of years there. You know, you asked the question about whether there's gonna be other acquisitions. You know, I think we're gonna constantly look at the make-or-buy decision on how we improve that tech stack. I'm confident that there will be times where, you know, buying is gonna be the better choice for some reason. You know, we've got a long list of people, and I think others in the industry look at it the same way. You know, I think that's how we've all built capability over time. You know, the big piece of it was Raven. You know, don't forget, you know, we've got a very good relationship with Trimble. You know, what they do to us, for us is extremely beneficial. I think there's still more opportunity for us to leverage that partnership as well. Understood. Thank you very much. Okay. Everyone, thank you for your questions today. There'll be no further questions taken. I'd like to hand it back over to your co-host to conclude today's conference. Thank you very much. Thank you very much, everyone, for connecting on today's call. You may now disconnect your handsets. Host, please stay connected.