Hello, and welcome to the CNH Industrial second quarter earnings conference call. I would now like to hand the call over to Jason Omerza, Head of Investor Relations. Please go ahead. Thank you, Kevin. Good morning, and good afternoon to everyone. We would like to welcome you to the webcast and conference call for CNH Industrial's second quarter results for the period ending June 30th, 2023. 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 that 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 annual report on Form 10-K, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission, and the equivalent reports and filings with authorities in the Netherlands and Italy. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliation 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, Jason. Thanks everyone for joining our call. In the second quarter, we delivered a solid set of results with record margins in both agriculture and construction. The impact of our CNH Business System is accelerating, and we recorded our highest ever level of price over cost, both in dollar and% terms. Profitability was particularly strong in the second quarter, with results exceeding our 2024 margin targets. Our ability to deliver record margins with moderate revenue growth is indicative of the earnings power we are building. In June, our EMEA team delivered record retail sales, providing helpful momentum as we enter the second half. We also achieved our highest production of North American high horsepower tractors since 2015, but are still aggressively working to reduce backlog and restock our dealers in this fundamental product category. Across the business, strong execution and focus on serving customers drove our success. Our lean manufacturing programs are developing more efficient processes across the company. These initiatives are rooted in expanding productivity, improving quality, and eliminating waste, and have become a tenet of our culture. Make it simple is one of my favorite cultural beliefs, and it is helping us streamline our business, and you can see the early results in our earnings strength. Consolidated revenue for the company was $6.6 billion, up 8% over last year's second quarter. Industrial net sales were up 6% year-over-year, reflecting a 19% increase in construction sales and improved shipments of high horsepower tractors in North America. Agriculture saw less robust sales growth in Q2, but we still see solid overall ag fundamentals. Our lighter ag sales in the second quarter were primarily driven by two factors. First, while our team in South America delivered strong retail share performance in the quarter and year to date, much like earlier in the year, the demand environment in the second quarter was shaky. With short-term demand in Brazil slightly lower than expected, we reduced shipments to maintain lean dealer inventories. Second, shipments of our new Patriot sprayer were delayed due to production ramp-up issues and quality considerations. We will get those products to our customers in the second half. In North America, first half combine demand was exceptionally strong. We are proactively working with our dealers to spur retail sales of both new and used combines in the coming quarters to mitigate potential inventory growth. We remain confident in our full-year sales guidance, even with targeted production cuts. Industrial EBIT was up 26% on strong price over costs as we finished the quarter with an EBIT margin of almost 14%. Earnings per share was $0.52 for the quarter and $0.87 for the first half, marking our best ever start to the year. Derek Neilson and his agriculture team set new quarterly records for gross and EBIT margins. This is not just a record second quarter, but a record for any quarter. Their impressive execution across products, brands, and distribution, coupled with a determined elimination of waste from our production processes, enabled us to better serve our dealers and customers. Our construction segment also recorded record results in the second quarter, for the first time generating net sales over $1 billion. Stefano Pampalone and his team introduced a plethora of new products at CONEXPO, they are increasing manufacturing throughput to improve customer delivery. We continue to see solid benefits from our Sampierana acquisition. We started taking orders in North America for model year 2024 products in June, production slots for 2023 are full for most products in most markets. High horsepower tractor production is now fully booked and assigned to retail customers throughout 2023, global demand for this segment remains high. We are taking orders into 2024 now, we see order backlog light pricing normalizing above pre-pandemic levels. Our customers are increasingly asking for our suite of precision technologies. Precision components net sales contribution increased 21% year-over-year in the second quarter, with a steady growth of factory fit elements. We continue to accelerate development and delivery of improved technical solutions for our customers. We launched the New Holland straddle tractors, specifically designed for narrow vineyards that require extreme maneuverability and compact dimensions. These new tractors will bolster our commanding presence in the orchard and vineyard segments when they ship later this year. We also published our 2022 sustainability report during the quarter. The multiple initiatives illustrated that provide proof that our commitment to world-class environmental and stewardship for our company, our communities, and our end customers. The construction team is making impressive progress in their pursuit of profitable growth. Our 2024 construction EBIT margin target of 5.5%-6.5% was a significant stretch from our previous low baseline, but we surpassed that at 6.8% in the second quarter, and we will likely be in that target range for the full year. Sampierana is proving to be the right investment for us. It gives us both mini excavator IP and enhanced electrification capabilities that we are already integrating into other products. We recently opened a new assembly facility in central Italy, expanding our production capacity for mini excavators and the new mini track loaders, both of which we will soon export to North America. Construction continued to benefit from strength in the North American market, especially for light equipment. We are leaning into the customer synergies we have with our ag distribution network to create incremental construction sales opportunities with our New Holland brand. All this, plus much more value we are working to unlock to take margins still higher in years to come, demonstrates why our construction business is an important part of our portfolio. Our company strategy is centered around five key pillars: customer-inspired innovation, technology leadership, brand and dealer strength, operational excellence, and sustainability stewardship. Today, I want to focus on our advances in operational excellence, especially our CNH Business System, or CBS, which is a key contributor to our $550 million+ cost reduction target by 2024. CBS is a set of tools and an aspiration to leverage lean to constantly improve the way we run our business and serve our customers, and a commitment to using Kaizen to engage our employees and drive sustainable improvements. Whenever I travel to our plants around the world, I see consistent use of our daily management system to prioritize and solve systemic issues. Our leadership team uses strategy deployment to ensure rigorous execution of our most important priorities to achieve breakthrough results. The overriding goals of CBS are margin expansion through operational excellence and revenue growth through constantly improving execution and innovation. What does this mean in practical terms? As an example for revenue growth, we are accelerating our time to market by eliminating waste and rework in our new product development processes. For margins, we are improving our modular design concepts, and Friedrich Eichler, our new Chief Technology Officer, brings a wealth of experience to help drive that effort. Across our manufacturing plants, we are empowering our teams to refine processes to improve throughput and quality. I would like to highlight a recent example at our Contagem plant in Brazil, where the team held a Kaizen to improve their production throughput. They addressed logistics bottlenecks and implemented a standard inspection checklist, making the process significantly more efficient. The result was a 58% decrease in fleet inventory buildup, a 14% increase in the daily line rate, and a total annual cost benefit of $2.3 million. This is only one example of the many Kaizens we're doing across the company at more than twice the rate of 2022, and we are starting to see the impact in our results. As CBS continue to expand, our results will as well. I'll now turn the call over to Oddone to take us through the financial results. Thank you, Scott, and good morning. Good afternoon to everyone on the call. Second quarter net sales of industrial activities of almost $6 billion were up 7% year-over-year at constant currency. This was mainly driven by favorable mix and price, and pricing in both equipment businesses, and by higher shipments in construction. Adjusted net income for the quarter was $711 million, with adjusted diluted earnings per share of $0.52, up $0.09 on the back of the ongoing strong operating performance. The effective tax rate was 24% in the quarter, and the full year tax rate will likely be in the 25%-26% range. Free cash flow from industrial activities in the quarter was nearly equal to last year, up $386 million, while the first half cash, cash absorption is about $370 million lower than last year. Looking at the segments, agricultural sales were $4.9 billion, up 5% at constant currency, supported by strong pricing, improved factory deliveries for large equipment and favorable mix. Net sales were up in all regions except South America, whose contribution to global agricultural sales is down to 18% from 20% last year. Gross margin was a record 27%. We are continuing our trajectory of very, very favorable price over cost as we push now more on cost efficiencies and some of last year's inflationary headwinds go away. Although we still experienced unfavorable product costs for higher purchasing economics in EMEA and South America, we have lower freight costs and multiple improvements in our operations as a result of our CBS efforts. High carryover pricing and cost inflation are persisting, but we will see both moderate as the year progresses, with the price-cost relationship remaining positive. Net prices will revert to the historical level, and there is no intention of lowering lease prices. This applies to construction as well. Increases in SG&A are largely driven by labor and co-labor cost inflations, and R&D spend was higher as we invest in the future of our products. Adjusted EBIT in Agriculture increased by $158 million to reach $821 million, with a margin of 60.8%, up to 180 basis points, mostly driven by the gross margin improvement. Since Scott already spent some time covering our main achievements in the construction business, I will focus on the financial KPIs for the last quarter. At over $1 billion, construction net sales were up 20% at constant currency, driven by better volume and mix in North America and APAC, offsetting lower sales in South America. Gross margin was 16%, up to 120 basis points, mainly due to higher volumes and pricing. Adjusted EBIT was $72 million, up 47% year-over-year, with a margin of 6.8%. For our financial service businesses, net income was $94 million, substantially flat compared to the second quarter of 2022. We experienced favorable volumes in all regions, but this was offset by margin compression, higher risk costs, and increased labor costs. We also had a lower tax rate compared to last year. Retail originations were $2.8 billion in the quarter. The management portfolio, including JVs, at the end of the period, was $26 billion. The receivable balance greater than 30 days past due as a percentage of receivables was 1.8%, largely driven by delinquencies in Brazil, where a large concentration of payments is due every May and creates a seasonal spike at the end of the second quarter. We are confident that our collection efforts will bring the past dues back to lower levels in the coming quarters. Our capital allocation priorities continue to be investing in our business, maintaining a healthy balance sheet and credit ratings, and returning money to our shareholders. We completed $98 million of share repurchases during the quarter, which is the highest level ever in one quarter, and we are continuing to buy back shares in the third quarter under our existing $300 million repurchase program started last year. We have already announced that we intend to have an additional share buyback program in connection with the delisting from the Milan Stock Exchange. To this end, we continue to be confident that the regulation changes needed for a simple delisting will come to fruition in a timeframe allowing us to be single listed on the New York Stock Exchange by the end of 2023. More specific details on the Milan delisting and the related stock buyback program will be shared as soon as possible. I will now turn it back to Scott. Thank you, Oddone. For our 2023 industry outlook, most of our estimates remain unchanged, but we have slightly lowered our projections in South America for combines and heavy construction. We also expect heavy construction equipment in APAC to be slightly worse than originally expected. On the other hand, we project slightly better full year industry demand for light construction equipment in both North and South America, and for heavy equipment in Europe. We are reaffirming our previous guidance levels. We are catching up on our order backlog and staying vigilant to ensure that we keep a tight balance on dealer inventory. It naturally varies seasonally, but we are committed to taking the necessary actions to keep our dealers positioned for success this year and every year to come. Where we land in the net sales guidance range will largely depend on retail sales levels, which is why retail sales execution is a primary focus in the second half. As previously announced, we have cut factory production on low horsepower tractors, which will be down about 20% in the second half. We will, of course, continue to build as many high horsepower tractors as possible in North America. We are also reaffirming our SG&A guidance of up 5% or less. Admittedly, we saw a higher increase in the first half, cost of the last two quarters will be in line with or below the cost of the 2022 second half. Last quarter, we said that 2023, we may approach or even meet our 2024 EPS targets from Capital Markets Day of $1.70 per share. With a strong first half behind us, we now have more data to suggest that we will meet or exceed that target in 2023. As we move into the back half of the year, we are encouraged by our results in the agriculture and construction segments. We are well positioned to build off this momentum as we continue to optimize our business. Our new product offerings and tech stack are consistently improving and continuously expanding their contribution to profitable growth. These developments take time, however. Our short-term growth is more reliant upon market share performance and dealer inventory management. We held firm in market share in the first half and expect to gain in the rest of the year. We are confident that we are controlling dealer inventory and stressing retail execution as well as anyone in the industry. We will increase the pace of CBS, strategic sourcing, and SG&A cost reduction programs, which will accelerate into 2024 and beyond. In closing, I would like to thank our entire CNH team for their dedication, hard work, and inspiration. That concludes our prepared remarks, now I'll open the line for questions. If you would like to ask a question, please signal by pressing star one on your telephone keypad. ... Please ensure that the mute function of your telephone is switched off to allow your signal to reach our equipment. Again, it is star one to ask a question. The first question today comes from Nicole DeBlase of Deutsche Bank. Yeah, thanks. Good morning, guys. Good morning. Maybe just starting with, what happened with the North America sprayer production in the quarter. Can we just get a little bit more detail on why the delayed start to production and whether or not you think you can kind of make up for that in the second half? Sure, Nicole. You know, I'm really proud of, of Vilmar Fistarol, who, you know, took over the North American business this year. We did a transition from the old sprayer to the new Patriot sprayer, which we were really, really excited about the features and benefits that it brings. The model year changeovers are, are often challenging. We've had a much higher turnover in our, our Benson factory than we would normally have had, and the transition did not go as well as expected. Rather than take risk on shipping products to our dealers that didn't meet our quality standards, we halted production, ensured that we had everything right. We are now shipping those products. We'll get them all out in the second half, but, really just a, a prudent effort by Vilmar and his team to ensure that we're delivering the highest quality. When you introduce a, a really good new product like that, you wanna make sure that that's what's delivered to our customers, not something that doesn't perhaps meet their standards or ours. But really pleased that those are already starting to be delivered, and, you know, we'll fulfill that in the third and fourth quarter. Okay, understood. Thanks, Scott. Maybe just secondly, on what's going on in South America, are you guys now happy with your current dealer inventory levels there? Or would you say there's more to go with respect to inventory curtailment? No, certainly nothing more we need to do on inventory curtailment there. I mean, we took our medicine in the quarter. We really feel like the... Remember, the fundamentals in Brazil are still quite strong. You know, it's still a strong ag economy. Farmer income was pressured a little bit because of the, the dollar weakening and some soft commodity prices weakening. Overall, the fundamentals for the market are quite solid, and we are very well positioned. We still have company inventory because we didn't ship it to our dealers, so it's not like we are at any risk of losing market share. We had really good market share there in the, in the, the quarter, gained share in combines, held our own in tractors, and, you know, we feel like we're very, very capable of performing better in the second half, as, you know, we've already taken we've leaned out our, our inventories going into the second half. Thanks, Scott. I'll pass it on. Our next question comes from Mig Dobre of Baird. Yes, good morning, everyone. Thanks for taking the question. I, I guess I'm, I'm looking for a little more color, if I may, on how you see demand, in, in, in large ag playing out. Any, any insight into how, how farmers are thinking into 2024 as well? That'd be helpful. Thank you. You know, Mig, what we're seeing in cash crop, really globally, is still continued positive demand signals. You know, as, as we said in our prepared remarks, we're gonna make as many high horsepower tractors as we possibly can. You know, the second half is always better for us in combines. You know, there is, what we've heard from, from dealers, the used inventory, not of our products, but of our competitive products on combines specifically, has gone up and is at a much higher level than it has been previously. You know, we are being careful to make sure we're dialing in the retail programs, not only for new, but for used products as well with our dealers. You know, Oddone's Financial Services business is, is really, capable of and, and, and smart about how we do those things. You know, there's been a little bit of caution, not, not to dealer inventories are in good shape for on our, our combines across, but I think people are just anticipating what can happen as the used inventories start to grow, and we're proactively getting after that. You know, really, the North American market for, for large ag still is very positive for us. You know, we don't, don't see signs of that, that slowing down. Understood. As you mentioned, financial services, pretty sizable increase in a managed portfolio. I guess I'm, I'm sort of curious as to how you see that progressing going forward. Also, revenue as a percentage of the managed portfolio has remained fairly steady despite interest rate increases. I guess the way I'm sort of interpreting that is, you know, you're, you're essentially trying to offer good financing deals for your end customers. Is that a proper interpretation? Are you essentially- Yeah, I mean, yeah. using financial services as a tool? Look, the, the growth of the portfolio is a mix of nominal growth because we have higher prices of the equipment and also some increase in penetration, so we are financing more of the equipment to retail to end customers, right? Also, of course, we had some growth in the dealer inventories over the last 12 months, so we have volume growth in there as well. Of course, we have had interest rates increasing all over the world, as, as we all know. We tend to match our funding with, with our receivables, so we are increasing the price and the cost for customers, unfortunately, of financing, but we're probably not doing at the full pace, and we have had some margin compression. In particular, last year, when we were delaying some of the deliveries by 6 to 9 months of tractors and combines. We have been generally honoring the condition that we had agreed with the customers when they order, the tractor or the combine. We will revert to that. We target a margin of around 2% on assets on Financial Services, and I'm confident we're gonna get back there. Okay, thank you. Our next question comes from Steven Fisher of UBS. Thanks. good morning. Can you just give us a sense for how the pricing was in ag by region? I'm just trying to figure out if the volumes were, were down in, in every one of your regions. I, I know you talked about the sprayers, I guess, in North America and the South American dynamics. I guess I'm just wondering, you know, how, how broadly were the volumes down, in which categories and, and why? In terms of the units, we were marginally down globally. We were up on higher power tractors in North America, up in combines in North America in terms of shipment. We are in terms of nominal sales, so dollar sales, we're down only in South America compared to the second quarter of last year. Okay. Sorry, what was Europe? Was volumes were? Volumes were flat, but there was a lot of pricing in Europe. I mean, unit volume were flattish, but a lot of pricing, so, sales were up in Europe. Just a reminder, in Europe, we had our best June retail performance out. The team did a really nice job of creating, you know, opportunities for a better second half, and then we're, we're pleased about that momentum. Yeah. Okay. Then with such good margins this quarter in ag, but volumes down, I mean, how should we expect operating leverage to look as you actually get volumes growing again more broadly? I mean, to what extent is there even more margin upside in here when you get that positive leverage and more cost benefits? Steve, the second quarter is typically the quarter with the best margin in the year. That wasn't the case on the last year, where we had a stronger third quarter. We think we're gonna revert to the normal seasonality this year. Expect the third quarter to be sequentially lower than the second quarter in terms of margin, but in line or higher than last year. And what would be the, the biggest factor making the third quarter lower? Regional mix. Regional mix. Third quarter, typically, we have European plants down. We sell less in Europe. It's, it's, it's mainly a mix and a, and a sales story. Okay. Thank you very much. All right. Thanks, Steve. Our next question comes from Kristen Owen of Oppenheimer. Hi, good morning. Thank you for the question. A lot of puts and takes on the, the production commentary. I was wondering if you can sort of consolidate that for us, help us understand what the production cadence looks like across, say, high horsepower, low horsepower, combine, and construction for the remainder of the year. If you could, could put that in context of some of the retail execution that you mentioned, how we should think about sort of mix of retail versus wholesale, going into the channel. Thank you. Yeah. Well, for, for North America, we had, you know, Grand Island is, and New Holland are our combine plants, and they're really ran, you know, full for the first half of the year, and I suspect they will continue to do so. you know, with Racine coming back online, and I just couldn't be more proud of the work that they're doing there to, to both improve production and improve quality at the same time. That's encouraging. They also supply our Fargo plant, that's given them an opportunity there. you know, we'll continue to run basically our North American plants, at capacity for the remainder of the year. you know, Brazil, obviously, we've, we've taken a little bit of a slowdown to, to match demand there. You know, across, across all of our regions, there, Derek Neilson and his team have really got good, strong retail execution plans in the second half of the year. With the products that we have introduced, you know, we're very confident in our share positions. We think, we think we'll be able to take advantage of both markets being, you know, still solid and, and better share performance. We're, we're, we're encouraged about where we stand, heading into the second half. Okay. Just to clarify, the mix of retail versus wholesale, I mean, you, you mentioned this focus on retail, but just as we're looking at the order book, you know, has that trended back to normal? Just any color on that. you know, the order book is, is actually. We just started taking orders in June. you know, for, for cash crop, you know, we're kind of, you know, booked out, and we'll start taking orders for 2024 here shortly. No, we've, we've got 6-9 months across the board, so we feel good about, you know, how we are standing from an order perspective. you know, even though there's an order in place, it takes a retail for, for dealers really to have spot for a new one. That's where we're putting a lot of our energy right now, where I think the team's dialed in on that, and we feel good about the performance we had in June and the ability to continue that throughout the rest of the year. Okay, thank you very much. Thank you. Our next question comes from David Raso of Evercore ISI. Hi, thank you very much. First question's on margins. In the first half of the year, your margins were up 170 bips. In the first half, your sales were up around 9.5%, but your SG&A was up 16%. The back half of the year, you're assuming revenue growth the same, around 9.5%, but SG&A down 4%. Just given that notable swing from SG&A up 16% in the first half to now down 4% in the second half, can, can you help us understand a little bit on the margins? We're talking operating margins here. Should we expect a similar margin improvement as we saw in the first half? I know the comps get a little harder, but I'm just trying to understand. Yeah. That notable swing. It's a question of comps. Our SG&A grew a lot last year, and in the second half, we're much higher than they were in the first half. The comps are easier in the second half. Getting to that level of SG&A is not gonna be easier, for sure. I mean, we are looking at different angles of it. We set this target and we're gonna get there in the second half. That's for the SG&A. For the margin, as I said, we expect the second quarter margins to be the highest in the year. We expect EBIT margin to be at the level of, if not, of last year in the third quarter, which was a very good quarter, and then likely higher in the fourth quarter. Is it fair to say the margin for ag is also supposed to reach the 24, the targets this year? Yes. Yes. All right. That's, that's helpful. Then on the pricing cadence, can you help us a little bit? You made a comment, I believe, we do not expect a lower price for 2024. No. Understand? Ever. Please, please forget I ever said you. I don't think I commented on 24. I assume we're talking net pricing. I mean, it could be incentives, lower financing. We're not talking less, we're talking actual realized price. Yeah. The, the way you're approaching the 2024 order books when they open up soon, should we expect a price increase? Just trying to understand a little bit, because, I mean, the price does seem like it's coming down maybe a little faster than people thought. Obviously, you're getting the cost outs. The price cost has been obviously very strong. Just so we literally get a sense of sort of a demand indicator, how you feel about pricing, can you give a little more color? we're thinking on a 2-3% price, pricing power or price increase, which is a mix of list price and discounts, of course. Yeah. Remember, we, we were very aggressive, I mean, price leaders, many of the quarters over the last... Admittedly, prices are moving up from a very high level. I, I think we're, we're certainly not at all thinking about dropping it, but we recognize, you know, with dealers are, are not willing to accept continued double-digit price increases. I think getting back to a normalized price is a good thing for everyone. All right, I appreciate it. Thank you. Our next question comes from Tami Zakaria of J.P. Morgan. Hi, good morning. Thank you so much. I was wondering, could you maybe share some color on how much of the volume decline in ag was due to the delay in sprayer manufacturing versus, let's say, the weakness in South America you saw? It was probably two-thirds South America and a third sprayer production, give or take a little bit. Got it. That's very helpful. Then, can you update us on the, over $550 million, operational excellence savings? Do you still expect one-third realized this year and two-thirds next year? No, I, I think we might have miscommunicated on that. We still expect more of it to happen in 2024. I, I think it'd be more like 20% this year. You know, as we said, we're really encouraged by the, the, the CBS activities that we're getting. Really encouraged about, you know, pushing back on, on logistics costs that have crept in and some of the other costs. You know, really the ramp-up of both CBS activities, our SG&A takeout, and our strategic sourcing starts to really hit the, the road. Most of that hits in 2024. We'll, we'll get it- Got it. Thank you it. Thank you so much. That's very helpful. All right. Thank you. Our next question comes from Gabriele Gambarova of Banca Akros. Yes, thank you, good morning, for taking my questions. The first one is on your, let's say, relative performance in terms of revenues. Over the last couple of quarters, you trailed your competitors, and I was wondering if this has to do with your choices in terms of production, basically, and if this trend is going to possibly revert in the second half of the year. The second one deals with your 2023 free cash flow guidance. Is it possible to understand what is your implied assumption in terms of working capital delta change? Thank you. Well, for the first question on, you know, our revenue cadence visas via our competitors, I think the best place to look is just the second half guidance. You know, our, our guide, because we've kept inventories lean, we still have the opportunity to, you know, ship to demand or, or in some cases, replenish dealer inventory. You know, those competitors that are taking down, you know, if they're having a sequential decrease, it means probably they've got too high dealer inventory and can't ship in as much. I, I think that explains how we got where we are. Tony, you wanna take the. Yeah, on the working capital, I mean, we were barely in a working capital on, on finished good inventories at the end of last year. We're being a little bit more prudent at the end of what we expect to have at the end of this year. Of course, we're taking working capital out of the plans as we are becoming more efficient there. We have some prudence on the overall balance of where we're gonna end up with inventories at the end of the year. Also, depending on where we want the dealer inventories to be. Okay, thank you. Thank you very much. Our next question is from Jamie Cook of Credit Suisse. Hi, good morning. Nice quarter. I guess, just two questions. One, can you just talk to your approach to the order buffer 2024, whether you'll just open the by region, whether you'll just open the order book or open it and close it and manage it throughout the year, specifically within the farm equipment segment? My second question, back on the 550, in 2024, can you just remind me, I think that assumes sort of a flattish type market, and if we have volumes, you know, I'm just trying to think about, could we have above average incrementals in 2024 if the volumes are there, and we're assuming, you know, you get the majority of the 550? Thank you. Just to answer your second question first, because it's easy. Yes, we can absolutely, if we get volume upside, have upside to that number. You know, I think the incrementals that we had in the second quarter kind of demonstrate what we can do. You know, what, what will happen is, you know, we're gonna have a little bit less price, but also a lot less cost. The mix of how we get there could be different, but certainly, the opportunity to overdeliver on the 550 if volume were to be higher is certainly there. For the order books for 2024, you know, we're gonna be. You know, we've gotten to the point where we like maintaining somewhat level of discipline and having, you know, strong visibility. We won't open up the entire year at one point. We'll probably do the first half of the year, and then, you know, go into the second half, because we'll have obviously the model year 25. Pricing, we'll have to think about at that point. You know, I think it's more of a, not, not necessarily quarter by quarter, but it, it certainly won't be wide open as we go into it. You know, as we said, with, with cash crop and, you know, the, the innovative products that we're bringing, you know, we feel, feel good about what, you know, the order demand can be. Thank you. Our next question comes from Daniela Costa of Goldman Sachs. Hi, good afternoon. Thanks for taking my question. Just wanted to ask on 3 things, they're quick. In terms of sort of capital allocation and, and just wondering if you could elaborate on how you're thinking about the buyback and, and going forward once the current one finishes, what, what are the priorities, buyback versus M&A? Maybe comment on that. I'll ask one at a time. Yeah, Daniela, I think we set up this buyback program in July last year for $300 million. We are executing on that. We, we, we, we are coming now pretty close to the end of it. What we have, have in our plan for the year, since we're doing the delisting from Milan and single listing in New York, we expect that there will be some offloading of our shares from European investors. There will be likely higher demand from North American investors. We are prepared, and we discussed with the board last quarter, and we are prepared to have a specific program that will be announced at where we announce, where we are getting the final days of the delisting, and that will be of a considerable size. We're keeping some, some, some, some, some balance sheet available for that. Great. My one of my questions was actually going to be for an update on the timing of the listing, which you've said sort of slightly before end of year last time, if that's still on track based on your. Right. We think, we think that we are, we have all the elements for being online, on track with this end of the year. Okay, thank you. Then a final one, just on the, on delinquencies. I guess the, what you show in the chart is still much longer, much lower, maybe than periods over history, but it has started to creep up. Whether do you think this is in any shape related to demand or interest rate situation, or just as in a normalization, you see back to? Look, it's, it's mainly linked to the Brazilian portfolio. We don't see any increase in, in the others, in the other portfolios. We have some in India, but it's a very small portfolio. It's mainly Brazil. Brazil, we have a concentration of payments in the month of May, and we typically have higher past dues at the end of the second quarter, which would typically, they typically reduce as the quarters move on. We are confident that we're gonna get back to the, to lower levels in the next couple of quarters. There's really on the North American and European portfolio, we don't see, we don't see any creeping up delinquencies. Got it. Thank you very much. The next question today comes from Michael Feniger of Bank of America. Hey, guys. Thanks for taking my question. Scott, can we just frame it? You, you kept the 2023 sales guide, but you highlighted, you know, the sprayer issue in Brazil. Just curious, you would kind of frame how much of an impact that's having on the full year guide? Zero impact on the full year guide. Like I said, in prepared remarks and in some of the follow-on questions, the sprayer issue, it was a short-term issue, done for the right reasons, but we'll make up. We're already shipping those sprayers, and we'll get the full allotment out to customers in the third and probably some into the fourth quarter. That was that. You know, we took our medicine in Brazil in the quarter, so we don't have to take it again. Dealer inventories, it's really about driving retail performance. Rafael and the team down there are really doing a nice job on market share. We've got great plans, I think, to continue to accelerate share gains in the second half. Therefore, with leaner inventories and, and better share, we should also get, you know, better performance. You know, we feel neither one of those would be repeats into the second half. In fact, they're tailwinds actually, for going into the second half. Great. Scott, just it seems like you're taking the proactive approach on inventories. The slide you show with the different equipment categories and your company and dealer inventories, when we get to the fourth quarter, how does that chart look in terms of dealer inventories on a year-over-year level when we think of those equipment categories? We are anticipating that they're kind of at peak levels. Remember, on some of the cash crop, we're still behind. What'll happen is we'll decrease low horsepower inventory, and we'll increase still some high horsepower inventory. But on balance, you know, we're trying to keep... We've seen the benefits of it, right? When we keep our inventories lean, we get, you know, better customer attachment rates on the other side. We get to hold price better. It's just a lot of goodness, lower dealer flooring costs. You know, I mean, part of what we have included in our guidance is continued healthy management or in some cases improved healthy management of dealer inventory. Just to follow up with that, Scott, next year, is production in line with retail sales, you think, next year? Obviously, we'll have to see how retail plays out, but just in terms of how you're thinking of your production for, versus your retail in 2024. That's where we would like to be. You know, it's, it's hard to tell, but, you know, that, that is an efficient way to run the business and how we would like to run it. I mean, obviously, if, if I could, I would just run it on a direct pull system. We can't necessarily just... It's complicated with our, you know, long logistics, lead times and whatnot. You know, that, that would be the aspiration. Thank you. The next question comes from Larry DeMaria of William Blair. Thanks. Good morning, everybody. Morning. Hey, first, hey, morning. Question, are you taking any planter and sprayer orders for next year just yet? Just curious if there's any programs out and how they're looking, if they are out there. Related to that, with this ONE SMART SPRAY collaboration, when is the commercial launch for green-on-green targeted spraying? I think some competitors are out next year with that. Yeah. We are taking into the 1st quarter, probably maybe the 1st, a little bit of 2nd quarter for sprayers. That's good. We are- we have not disclosed, and it's partly because I don't think we know how quickly we're gonna have that ONE SMART SPRAY solution integrated. Just a reminder, though, Raven is an- are experts at sprayer technology, and they had a relationship with Bosch even before us. I, I feel confident that, you know, we will not be delayed in any... We, we don't have a scheduled launch for that yet, but we recognize there's a competitive need to get that in market as quickly as we can. Okay. Thank you. Then, you know, I know you've refreshed your tractor lineup, and then obviously, you had to deal with the strike, and now you're, like you said, you're running kind of full tilt into the year end on, on tractors. Can you talk a little bit about, you know, share and if you think you can regain some of that share, given the interruption, or if that's a multi-year event, or can you just talk about some of the trends there? No, you know, we're already seeing our ability to get, get some of that share back. I mean, we feel really good about the stickiness of our customers there. That, that is not really acceptable to me or anyone, that we just get back to where we were, because we felt like we were under punching our, our weight there. We've, we've seen with the deliveries, the quality improvements, that, that we're getting back to a- I mean, I wouldn't even call it an acceptable share, but we were at, we were at an egregiously low level. We've gained, I think, in the month of June, about, you know, 500 basis points. We, we saw that start to creep up. You know, we believe that we've got the opportunity to, to continue to advance, you know, again, from, from low levels, but, but back to a, a level. Then, you know, we're gonna continue to invest in that product. It's an incredibly important product category for us, so both on the iron side and the technology side, you'll, you'll see us continue to lead in. We, we feel really good about, you know, where we are currently with that Magnum product and then what the team's doing to get more and more of them out to our customers. Okay, thank you. Good luck. Thank you. The next question is from Marta Bruska of Berenberg. Hi, good morning. I would just ask if you could please provide a little bit more color on Europe. With channel indicators and some of your peers that are negative for this year for the region, yet CNH shows still positive or flattish volume development year to date. Is that due to the product mix? If so, the broader market in Europe is rather normalizing this year with potential up, up cycle maybe next year. Would CNH benefit from that, or next year, or just continue with moderate performance over both years, please? I have one more. Yeah, Marta, there's some interruption in the line, I would say, there's mixed picture in Europe. As always, many countries, different, different zones, also we have Middle East and Africa in Europe. Of course we have Ukraine, which is potentially a large market and, unfortunately disrupted. I would say, Southern Europe was more difficult this year. Of course we have a large presence there, so Spain, Italy, some of France, whereas Northern Europe was stronger. We feel that we are doing a good work. We have been doing a good work with our dealers in the second quarter of this year, and we feel encouraged by the results we had, in particular in the month of June. I think it was at the beginning of the prepared remarks from, from Scott. We think that we are really stimulating retail there, and, and, and we will improve our situation significantly. I know. Thank you. Then moving to financial services and, you know, some of the more volatile regions such as Brazil, can you do anything in terms of lease term adjustment to help the farmers realize the investment they probably would still want to make here? And- Sorry, there, there, I think there's somebody in the line that needs to go on mute because we are hearing, at least from, from our side, we are hearing two voices together. You, you were talking about Brazil, Martha, and about the liquid? Yes. No, more, more, more into, you know, kind of, on how do you managing that, and whether you can do something with the lease term adjustments to kind of protect a little bit and stimulate the demand at the same time. Well, you know, we, we, as always, in financial services, we act both with our dealers, with wholesale financing and with our customers, with what we call the retail financing. Brazil retail financing is also influenced by government subsidies. As you know, the programs for government subsidies are becoming smaller and smaller, and they get consumed pretty quickly in the year. We are extremely competitive. We offer very fast service to our customers and to our dealers. We think, you know, that we can... We are a real help in getting, in fetching those subsidies for the customers that are interested in getting them. We see ourself as a, you know, as a service function to our dealers and to our brands to support their sales. Thank you. That's all. Thank you very much. As there are no further questions at this time, that does conclude the CNH Industrial second quarter earnings conference call. We thank you all for your participation, and you may now disconnect.