Earnings call transcript Q2 2023

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Operator

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.

Jason Omerza

Thank you, Kevin. Good morning and good afternoon to everyone. welcome Industrial's the the Second June XXXX. to call and period like XX, CNH for Quarter would you webcast to conference ending We Results for is broadcast our This live is CNH Industrial. being website call and copyrighted by on transmission use CNH of of this any other strictly is prohibited. the Any of written without expressed portion or recording consent Industrial broadcast

that, for subject Hosting harbor any today's website. will use They the CFO, Oddone today's call Incisa. we Industrial presentation that are statements material. call the in risks CNH CNH material forward-looking Industrial's uncertainties download available might CEO, Please during safe the mentioned in included note Scott to Wine; and making and from the statement be the are

materially report Additional most measures. company reports equivalent the Securities information certain filings Exchange pertaining Form factors on and could The U.S. and to as includes and and Netherlands differ contained Commission recent filings is company's financial that other annual cause non-GAAP Italy. presentation as to XX-K with the the well in the authorities periodic in and with results reports actual

including in information, presentation to Additional U.S. directly the material. is measures the GAAP financial comparable reconciliation included most

turn Scott. over call now to will I the

Scott Wine

ever delivered call. record system Thank is In of set of thanks of business CNH and agriculture and over impact joining level our percentage in everyone price in quarter, dollar and we accelerating you, recorded both Jason, with for a margins the and cost our highest our terms. solid second results both construction. we The

our second with exceeding margin strong XXXX targets. the particularly in quarter was Profitability results

building. the indicative moderate with deliver earnings Our revenue record margins ability power are we is of growth to

momentum retail record In enter second June, helpful team the providing our as EMEA we sales delivered half.

backlog since production category. restock American highest and product working our XXXX, our reduce to of tractors North achieved are in dealers fundamental still also this aggressively but horsepower high We

focus strong business execution and drove on success. customers the serving Across our

culture. in rooted the a processes Manufacturing have are These and eliminating waste quality Our and company. more initiatives expanding developing programs of productivity, efficient are become our across improving Lean tenet

last of it you is cultural see in us earnings company it the and favorite business, net up $X.X for reflecting construction quarter. and sales billion, America. year's results XX% the sales improved second streamline in our early high were over increase revenue my X% a horsepower Industrial Make North strength. beliefs X% can simple up Consolidated and year-over-year helping one shipments of was tractors is our in

ag sales growth still Agriculture but in overall solid see robust saw less fundamentals. we QX,

in two team was the ag year lighter shaky. the in primarily in our Our sales earlier like factors: strong the second share environment retail demand by the year-to-date, South quarter second America quarter the first, while delivered in in driven were much and quarter performance

shipments were short-term dealer maintain second, to quality sprayer than considerations. reduced in due With shipments to inventories; expected our demand patriot ramp-up lean production delayed new slightly we Brazil lower of and issues

get to our the will products those second We half. customers in

North In half strong. was exceptionally demand first combined America

remain new targeted even confident in full working with sales used quarters to We potential inventory the to our production retail mitigate coming We in and both guidance are of sales proactively cuts. combines with growth. spur dealers our year

ever was first was half EBIT and year. EBIT an XX%. our margin with start of price XX% the finished quarter the over per quarter Earnings for the Industrial cost $X.XX to as on we up share almost for strong marking $X.XX best the

waste serve Their any to from enable processes new margins. the products his gross not team customers. production for agriculture a record determined our brands and and impressive second our coupled This set and elimination for a records quarter. record and quarterly better distribution us across execution quarter but is with Nielson just Derek dealers EBIT of

Stefano customer billion. his to time first in also throughput they improve quarter, record over and manufacturing segment new generating increasing ConExpo recorded the second the $X a for plethora team are delivery. and Construction net Pampalone at products introduced of results Our sales

see to solid continue our benefits We from Sampierana acquisition.

in production XXXX, production and products full now High high. customers for most are booked We year for for started slots global taking America markets. model in orders segment in for is assigned retail most XXXX XXXX horsepower June, North and to demand products, tractor fully remains and throughout this

now, taking We levels. are order XXXX normalizing backlog like see above orders into and pre-pandemic we pricing

asking customers technologies. suite our for increasingly are precision Our of

a in the Precision growth Components sales contribution elements. increased net with factory-fit of steady second year-over-year XX% quarter,

We of solutions improved technical our continue to delivery and accelerate development for customers.

maneuverability year. in for the stream they our We and launched vineyard narrow orchard compact designed the specifically new Tractor that These ship will vineyards segments, this and later Holland dimensions. require bolster tractors presence New Straddle commanding when

our published also company they The environmental the our multiple provide and to our illustrated our during end-customers. XXXX that proof initiatives quarter. for sustainability our and We commitment world-class report communities stewardship

The making of is construction team impressive their in profitable progress pursuit growth.

but was baseline, for XXXX low at surpassed will of a in full year. we our stretch in range be second target and Our target previous significant that EBIT X.X% from X.X% construction X.X% quarter we likely the the that to margin

us. Sampierana mini integrating IP both other are to enhanced excavator gives the is products. be and proving electrification into capabilities we already right It investment for that us

Central export the will in opened both of and soon America. new North recently many many to We expanding a loaders for new assembly our Italy, excavators capacity track we which facility production

strength in to Equipment. continued the from North benefit American market, especially Light Construction for

Holland ag network opportunities into leaning incremental synergies create sales have our construction distribution the New are our to We customer with with brand. we

demonstrates construction much working our portfolio. to value of an to is our All we're part this, important plus, take higher still to unlock business margins come, years more in why

operational innovation, strategy five centered customer-inspired and sustainability leadership, stewardship. around, brand strength, technology excellence key company pillars: and is dealer Our

focus plus contributor Business to XXXX. advances on CBS our operational excellence, I key want to by which CNH $XXX our reduction Today, or especially is target, million cost our a in System

employees using serve drive of improvements. sustainable our customers, set we and lean and to business aspiration way our constantly the our and to tools CBS' a an leverage engage to commitment and to improve run Kaizen

Whenever issues. I daily world, to and plants around our system the consistent management solve prioritize use I to of see travel our systemic

important to results. deployment of execution priorities rigorous our breakthrough most Our uses ensure achieve leadership strategy to team

goals of expansion execution revenue practical overriding CBS innovation. does improving and mean operational The terms? margin What through growth in excellence constantly through this and are

we our for As growth, market time processes. revenue are by to and new an development accelerating our product example eliminating and waste rework

margins, our of effort. For concepts design Friedrich that our and wealth brings we drive a Chief Technology are to improving Officer help module new experience Eichler,

the we processes improve Across in their plant improve production plants to to held a Kaizen empowering at example teams I highlight recent where and our Contagem throughput. a quality. our to manufacturing to throughput would our like are refine team Brazil,

inventory a logistics implemented They line more XX% million. daily result checklist, inspection of in and the significantly addressed decrease total a increase buildup, efficient. $X.X bottlenecks The XX% and a annual benefit standard process making a rate in fleet cost was the

across of results only impact well. the see to the we're doing the as CBS XXXX expand are Kaizens of starting rate many company is our than in to one more This example results twice as our continues the and and we will

through over financial I to will now the results. turn Oddone the to take call us

Oddone Incisa

on good Scott good you, morning Thank afternoon the to everyone call. and

favorable at year-over-year driven in activities both quarter businesses in sales by $X by mix and equipment up Second currency. and billion of industrial construction. almost was constant This pricing X% higher of were net mainly shipments

of range. share effective $XXX XX% the on diluted likely in in earnings performance. operating to ongoing back of quarter full XX% year $X.XX, the for with income rate net and rate was tax the adjusted up $X.XX be the million per XX% strong quarter tax the was Adjusted The will the

million Free while flow the absorption cash was from to activities is first up the half cash year. equal industrial million about than nearly $XXX year, in $XXX lower quarter last last

to by improved favorable currencies deliveries Net regions large factory segments. Looking at sales XX% pricing equipment mix. the up from Agricultural X% last down were strong $X.X to sales at except in South global agricultural year. billion and is whose XX% were America sales up for all constant contribution supported

Gross away. last of push cost record cost trajectory our we more as of margin our and continuing now was some very we year's a inflationary price efficiencies XX%, on headwinds go favorable of are

costs higher experienced purchasing in still South unfavorable product America. and we Although economics for EMEA

a are cost We inflation have pricing moderates efforts. with and will both progresses see carryover and improvements result operations our positive. freight we costs relationship year in as remaining the price our but cost the of High persisting, as lower CBS multiple

prices increased our Adjusted the driven of products. basis invest lowering R&D driven largely of in $XXX Net agriculture gross intention well. as $XXX reach will future prices. EBIT a lease margin no as higher million revert is are and million to in level by points mostly applies with XXX historical and there cost This construction in inflations XX.X% to spend by up improvement. of was SG&A margin to we the by Increases labor the

for sales our $X America will covering time on business mix some sales at At last the focus the over by quarter. APAC XX% South in were financial up spent the and driven America. achievements already Scott in net construction offsetting construction North and Since better currency, volume KPIs constant main lower I in billion

XXX year-over-year Adjusted up of XX%, was XX% $XX margin volumes basis X.X%. due mainly EBIT up was points, Gross higher pricing. to and margin with million, a

second $XX For higher compared costs, this flat to increased was regions, in costs. volumes compression, million XXXX. income We net substantially offset Service quarter risk our all businesses favorable by the experienced and margin was labor Financial but of

a last lower had We also to tax compared rate year.

May of the billion receivable end $X.X the Brazil concentration due at The were of every the a The due management by driven seasonal in was quarter. and greater at X.X%, of of payments originations the large as a largely is a period was XX including second balance creates million. percentage quarter. where spike JVs receivables portfolio than end Retail in days past delinquencies $XX the

levels confident efforts dues to the are bring the quarters. back lower that past will our coming We collection in

shareholders. $XXX $XX buy balance highest in of Our and to level we quarter maintaining credit money quarter continuing quarter returning during repurchases completed be last in business share program started one which healthy to a our continue ratings year. is repurchase ever back to and sheet We investing existing under the the our in shares capital our the allocation third million are and priorities million

York be an New have simple frame changes New will we delisting intend Milan to have needed program from XXXX. shared continue for and regulation the the possible. announced the More listed related York Stock in a soon to to share specific single in Exchange. additional on buyback Exchange be allowing as a buyback the that time confident We on the with with stock details end delisting concentration the as already the by be event delisting To connection we program Stock that us

Scott. we'll now Now, it turn back to

Scott Wine

Thank Oddone. you,

but heavy and construction. America combines For lowered our projections our estimates for most our South have we slightly unchanged, industry of outlook, remain XXXX in

equipment than expect originally worse also We construction slightly heavy be to in expected. APAC

demand industry for year the project hand, full On heavy light in in equipment other we construction and South equipment North and for America better slightly both Europe.

our reaffirming are We previous guidance levels.

vary are year balance up keep and our we come. tight necessary ensure year inventory. backlog naturally for we but the keep vigilant on every on positioned our and are this dealer to order staying committed to dealers actions It We seasonally, taking catching to success that a to

Where in the second depend net retail retail we levels, land the why range a guidance sales execution half. will is on largely focus sales which is in sales primary

have As the we previously second down tractors be low half. cut factory horsepower about production in which on announced, XX% will

course We as America. tractors to North high will many horsepower in as continue of build possible

last our second X% we in now half the increase $X.XX quarter, Capital half. two in that in or the of less. first be will Day behind share. EPS XXXX. cost below SG&A XXXX cost the or from suggest Last With per meet strong that Admittedly, exceed also we reaffirming or first that with half, even have but target are our of targets a XXXX we approach said we more higher line of may to will quarters up data the Markets XXXX, saw us, of meet or We a guidance we

half As we Agriculture encouraged move by the Construction year, are into the our of and segments. back in we results

we to our continue to this as well build optimize off business. positioned momentum, are We

contribution their growth product is offerings consistently upon are developments our and expanding short-term inventory market and new more tech These Our profitable management. dealer so improving take growth. to reliant time share however, performance stack and continuously

expect inventory controlling we and well the stressing year held the as We industry. half of rest confident dealer anyone as we gain are the market firm first that in in share the retail and are in execution in and to

programs We CBS which will of cost accelerate XXXX and and the reduction into sourcing increase strategic pace SG&A beyond. will

for like the I closing, line work dedication prepared would to team questions. and entire for open I'll our thank In That inspiration. remarks and concludes hard CNH our their

Operator

of DeBlase Deutsche comes [Operator Instructions] question from Bank. The today first Nicole

Nicole DeBlase

Thanks. Yeah. morning, Good guys.

Scott Wine

Good morning.

Nicole DeBlase

production more of Maybe in whether just quarter. a production bit just spur think second with start to or detail starting with the for the North get we up delays on you make little why what the America you kind happened half? Can not in can the that and

Scott Wine

standards. changeovers had the we've products to expected. turnover transition well really a to transition that over the I'm Vilmar quality are it we our The as Benson the as year really, the normally have had Fistarol we American that from challenging, sprayer did year. who model Nicole. North about brings. We of on go features Rather much old often dealers risk take business Sure, factory in proud than a didn't Patriot higher sprayer shipping new than did took our and this benefits excited our which not really and the meet were would

ensured we in production, half, shipping ensure the We'll we're and to a them all those that really you everything introduce just products. quality. product Vilmar now we that. had his now but the a right second good team like prudent highest are When effort they're new that by -- out halted get really We delivering

those that's meet the we'll their to fulfill doesn't and something that what's and standards or hours. be our are to delivered sure that You really customers, make to not want third quarter. But starting in that perhaps already fourth delivered that pleased

Nicole DeBlase

or Scott. with going with maybe you to inventory South on go to levels curtailment? secondly Are happy respect more Thanks, And now Understood. Okay. there's current say on guys you dealer then inventory America. there, in your what's just would

Scott Wine

are No. Certainly strong. still inventory quarter. strong quite took really a need prices mean, little income the was inventory our solid commodity are to didn't of still and nothing medicine economy. weakening bit it weakening. curtailment quite I ag we because in the fundamentals -- like fundamentals We to some more have on dollar But company for very the Brazil do there. well-positioned. are because It's The overall dealers. the our we soft we pressured feel market a still we and remember farmer the in ship We

like out market our gained tractors. half not taken the second the as there losing into share in combines, good of -- any at we've are we're share. our like in had we've it's So really we in the And very, of share market we quarter, already half. the going second We performing held very risk capable feel in own better leaned inventories

Nicole DeBlase

it on. Scott. pass Thanks I’ll

Operator

question comes Baird. next of from Mig Our Dobre

Mig Dobre

little Yes. you large guess, you. how thinking question. be into Thank well are how Any Good everyone. XXXX, Thanks if into more farmers morning, on out. for taking ag the helpful? color may I demand in I'm that looking as would see playing for a insight I

Scott Wine

remarks, horsepower said crop Mig, is signals make globally what we're prepared can. positive really seeing still we to as cash continued many possibly demand in our as high we as we're in going tractors

of competitive than up previously. our products on higher for better not inventory a specifically dealers, always gone it from used is we've but at in is products, has much half been second combine us -- level heard has combines. There the what The our

to good in those inventories -- only caution So and smart we our for in new dialing we a Oddone's dealers. deal little on business our our financial are make dealer being do things. -- as sure the to shape well are for not of how services careful with but of across. been not is retail used combines But capable bit about really products we're there's for programs, And

to the proactively I we're used just after what getting people are and happen start think anticipating as But grow can inventory that.

positive down. American we for of is North for don't and us still slowing signs very the large that really see So market ag

Mig Dobre

Understood.

services, increase financial mentioned sizable in managed you portfolio. the As pretty

guess Are services as guess, is proper I'm a despite trying increases. -- Is offer to portfolio the essentially a revenue that steady end as for you progressing how essentially has a I'm that that you're deals managed way forward. going the I customers. interpretation? of And also your tool? interpreting financing see to curious So interest as I good you percentage fairly rate remained

Oddone Incisa

growth, have Look the equipment prices mix we a and increase portfolio of growth in higher nominal of some also of penetration. because is the the

financing more course, to the of over -- the But to of we the right? we months. dealer XX So inventories equipment also, retail in had some are customers, growth end last

So we well. growth have as volume in there

interest we've We've of increasing had world. course had over rates -- all the

know, As we to all our our receivables. we have match we -- funding tend with

So we're have pace the tractors some that we the but we Unfortunately doing of order we particular not at the are and condition full compression of price customers. were comply. with year and financing, increasing the the of months cost had customers by and generally to had six agreed we we have in last combines they some when the margin for the nine been honoring that when delaying deliveries tractor probably

a revert I'm assets to will to and X% -- that have We get on will services confident margin going back we target we're we there. on around financial and of

Mig Dobre

Thank Okay. you.

Operator

from UBS. question comes next Steven of Fisher Our

Steven Fisher

give was Thanks. figure Can in for talked know But and in every the the about Good just sense which and ag were a if volumes in guess just were us you America out I'm volumes sprayers, the the down to one trying your dynamics. the categories I regions. just how guess of down region? in morning. by South how and wondering American broadly you why? pricing I North I'm I

Oddone Incisa

North units, shipments. in We North America, marginally in on So America of we up were globally. in tractors in down in up of terms terms combined were high-horsepower

we’re dollar compared only year. We in America second last of are -- in terms quarter South of so nominal to down the sales, sales

Steven Fisher

Okay.

And -- was Europe sorry, were? what volumes was

Oddone Incisa

pricing in of Europe. there were Volumes but lot flat a was

were so were a So, sales of in up Europe. I pricing mean but unit lot flattish volume

Scott Wine

Europe a our performance. in best June reminder, had just retail we But

better we're momentum. job and half opportunities for nice about really creating a a did pleased team of second the So that

Steven Fisher

Okay. how that good mean upside with margin actually volumes here And when positive is in quarter margins get get more mean growing but I then, what to leverage as look down, should I more we leverage ag to even you this you there such cost broadly? operating expect more volumes again extent and benefits?

Oddone Incisa

The typically third think wasn't we the in a to the to revert the seasonality We the second That going year the last year. margin on quarter is had we're stronger with quarter. case this where year. best normal the quarter

sequentially than lower quarter in in or I be margin year. last So expect higher quarter second third the than the terms line but to of

Steven Fisher

factor more be what quarter biggest third in making the And would the lower -- production.

Oddone Incisa

mix. Regional

we sell plants We Third quarter typically down. have European in less Europe.

So, it's and a story. a sales mix mainly

Steven Fisher

Okay. Thank very much. you

Oddone Incisa

All you. right. Thank

Operator

Our next question comes from Kristen of Owen Oppenheimer.

Kristen Owen

then Good the question. of the on Hi. sort production across like cadence the And looks takes combine for in put horsepower, and for into construction consolidate think we puts remainder of and versus was production morning. year. of you mix help you of I of if the channel? execution retail lot of the the you. you could retail some wholesale if understand sort commentary, should us for so that that wondering A can Thank say horsepower, low that the how what going Thank context of about you high us mentioned,

Scott Wine

the time there that's same that just the encouraging. them and online work plant, both ran I North half improve and an we quality suspect continue will proud that's for so the first at more also racing to they're New do coming given supply combined to and And they really Holland there. They America, our of our Island full Well I Yes. production improve plants. year opportunity be doing With back so. the of and Fargo they Grand couldn't for had

capacity our at the remainder to continue basically for we'll the So American of plants run year. North

very his with But regions, taken to there. products share and second all And we've positions. that have retail little slowdown Derek of our half a a the year. good of in across match our the confident of demand in strong Brazil, have plans we bit got team obviously, introduced, really Neilson we're execution the the

still we'll think markets able being better we and of solid So, take performance. advantage be both share to

So half. stand encouraged we the where into second about we're heading

Kristen Owen

focus mix we're at retail to mean looking has the And wholesale. of to that? just I on Just that as book, versus retail on mentioned color just this clarify but back any order the Okay. trended you normal?

Scott Wine

just is book orders in we actually The -- started taking order June.

booked for For crop, across out we've start we'll But and six orders XXXX months kind cash here we're no, board. taking the to of got shortly. nine

have are an But order spot feel perspective. from there's new takes a order in retail place, we So we standing even a about dealers for how good it to an one. for though really

we're now. putting energy of that's right lot So where a our

I the we ability the on had think performance the the good feel year. continue is that in of in the we to and dialed team that June, throughout about rest and

Kristen Owen

much. Okay. Thank very you

Scott Wine

you. Thank

Operator

Our next Raso Evercore comes question of David ISI. from

David Raso

much. very you Thank

up half question First XXX first margins were same the SG&A the down around in is revenue year X.X%, bps. up the In on was assuming X%. year back margins. your of your growth but of up but half your the the X.X% sales around half XX%, But were SG&A the first you're

to understand in little just a operating now you So margins to a as given first in swing Should I'm get margin us the first little Can a we're talking half know bit just trying understand the up similar from we saw the second we harder the more. comps the expect in but half. I a on SG&A, X% notable half. help down here. margins XX% little that improvement

Oddone Incisa

question a It's comps. of

a than higher lot grew and were in half second last they SG&A the first in were Our year much half. the

to comps of be SG&A level that are sure. going the we target not we getting of looking in set and in for different So it. angles mean this easier at is I But we've second the to to half. second half, are there get got the easier

So that's for the SG&A.

quarter fourth margins not was highest in of quarter expect year very but the third year be be to quarter. margin we EBIT second the last the if in in good at expect which the quarter higher we said, to I as margin the For a the the then and level, likely

David Raso

XXXX, supposed this year? margin to to the fair it reach targets the Is ag for the is also say

Oddone Incisa

Yes.

David Raso

on financing a we you bit little pricing talking be believe, All comment us I cadence, a actual realized lower lower we're understand then not price it the That's a mean incentives I you And do expect XXXX [indiscernible] made We're help talking list. for right. price. can not could helpful.

thought. Obviously, and you're way the should of you you're a little the open sort XXXX the cost down how has they price getting a get trying little approaching maybe Just we give because feel than so up does bit books us outs people when The mean seem sense price like more obviously expect But I understand it's the cost about soon, very price increase? color? order just a faster to coming little you Can the we strong. been little of a demand indicator, pricing. a

Oddone Incisa

or X% a power to and on is discounts price which pricing price a mix this think price X% course. increase, of of We –

Scott Wine

aggressive leaders quarters last. over were many of price maybe Remember, the we very the

are prices up level. a admittedly, very moving from So high

continued So increases. double-digit about with to I recognize not accept certainly dealers we're think not at driving price are all but thinking willing we it

to getting price So a I thing is everyone. normalized good back for think a

David Raso

you. it. Appreciate right. All Thank

Operator

our And Tami from comes question next JPMorgan. Zakaria of

Tami Zakaria

Hi, so good you thank much. morning,

So wondering say South share America of weakness you could sprayer I the saw? manufacturing in was the due to ag much decline delay how versus some you let's volume on color maybe in the in was

Scott Wine

and take sprayer production, bit. two-thirds was a give It probably South one-third America little or

Tami Zakaria

next year? us update And still Do then realized That's and on $XXX you two-third excellence operational over very you this can the million it. helpful. expect year savings. Got one-third

Scott Wine

No.

happen have expect that that. XXXX. might on in more miscommunicated We still of we think I to

And XX% takeout other as CBS year. logistics really and we said ramp-up of some activities it CBS we're to the road. that by have But our more the back really crept really that encouraged SG&A we're like both be think and starts would our sourcing strategic costs in of the the really getting, on costs. this about pushing encouraged activities I hit

So in most XXXX. of that hits

Tami Zakaria

you Thank That’s much. it. very helpful. so Got

Scott Wine

Thank you. right. All

Operator

from Our Banca Gabriele comes Gambarova next of Akros. question

Gabriele Gambarova

you. Thank -- Good questions. taking Yes. for my morning

say The performance in on of terms first your revenues. relative one is

understand in with couple of Over I to production to assumption wondering the last the of it cash one And delta implied you. of in competitors. to choices your terms change? is second if going has your with your possible capital trend if revert your XXXX free flow terms half deal you possibly basically. the second trade the And year? was guidance. this this is Is quarters in And deals Thank of what working

Scott Wine

is the for I cadence look place just the competitors second our first question half on Well guidance. the revenue our think best to vis-à-vis

we've ship -- can't guidance to because those or still taking competitors in too to decrease in it we if have having sequential inventories dealer and some inventory dealer high probably opportunity that means lean -- kept Our they're inventory are the got they've demand a replenish and cases as ship down much.

So I this? you Oddone, we we are. take explains think do how got that where want to

Oddone Incisa

Yes.

capital On mean, finished on working we the lead were at good of working capital, I very on inventories the end last year.

at at the So we're the we year. this end what to have more of being of expect prudent little bit a end

up we where working we taking with also update on the capital on have going of we more depending to the the inventories be we're with we're out prudence but our plants to overall efficient are end the course, balance year of Of there, where today. at of end inventories as want becoming some --

Gabriele Gambarova

very you Thank you. much. Thank Okay.

Operator

is Our Suisse. of next Credit question from Jamie Cook

Jamie Cook

just I Nice Equipment book open it guess Farm year you'll just book two whether order One just approach you'll talk Hi. you and quarter. open questions. region close it segment? whether the XXXX the the to Good throughout just and within order for open -- morning. specifically the to manage by can your the or

above-average we there if million the we could assumes on I'm And incrementals you. question second and me then have the that get assuming I in market. do we're think type Thank volumes about volumes $XXX remind the just have just the you my trying sort back majority can million? you XXXX, of to And flattish $XXX if of in think XXXX a

Scott Wine

second -- less quarter upside question number. will the to absolutely And we if less incrementals but Yes because price, volume little do. we're answer had is to get in think it's lot going to we we bit happen can can upside first, kind have of have demonstrate the we what your cost. So that just a what easy. that And second also a I

of volume how to different. opportunity $XXX the mix be million the were to So overdeliver certainly on be we there But could is get certainly the there. higher

So gotten the some -- where we'd point to be to the of order going discipline visibility. XXXX level for books we're maintaining and having like strong we've

up think We'll year won't into year we year entire the model So second point. do point. about half half to XXXX have at that we'll of and the one open obviously pricing the first because then the the at have go we'll probably

I But of what not crop go necessarily certainly good a of about we be. But it products order said demand feel that think we as we more be can quarter-by-quarter bringing cash innovative -- the the as with wide open it's it. into and we're but won't

Jamie Cook

Thank you.

Operator

comes next of Costa Our from question Goldman Sachs. Daniela

Daniela Costa

Hi. Good for Thanks question. taking afternoon. my

on three are to ask current the priorities terms Just one quick. finishes capital the wanted just wondering if ask sort Maybe one thinking the buyback of that. a on allocation time. you things what once elaborate comment forward I'll versus you're and how real of M&A? could in and But going about on buyback at

Oddone Incisa

in $XXX have up last July we we for year -- million. Daniela, program buyback Yes, this set

that. We are on executing

we investors shares it. now there of coming What are of will investors. be in and be New are Milan will expect delisting European the in some we our likely end single from North pretty have the York, American plan We since offloading year higher for our demand for there close the we that listing doing to from

that be announced are and get will discussed a the delisting the to days Board we in prepared we be final -- and we with and have of But last program are a where prepared specific considerable announced will size. we the we that what quarter,

keeping available sheet we balance So for are some that.

Daniela Costa

was update an one for be end -- going of of of on timing slightly actually my you've My questions delisting, still Great. said on time last which of to sort year based that's if track on your… before

Oddone Incisa

the we have think elements -- We -- with Right. we on year. track for this all online the of being Right. that are end

Daniela Costa

demand it started And to this in than a longer the track I on see any a history, you show is interest up over related is in you. guess, much situation you think lower much maybe you Thank delinquencies. then to to? shape creep or but do rate one just normalization whether has periods just or chart Okay. -- what still final

Oddone Incisa

of quarters the month second in We -- to it's portfolio. the quarter, portfolio. and Brazil. linked in other It's very the India, we as typically Brazil higher which portfolios. reduce a have payments dues have in had We in mainly end we at but Brazilian the second of May, small mainly of see increase It's move the don't the the past concentration some any would on. typically a

couple see delinquencies. are we portfolio we're get we lower levels back don't American of quarters. But to on any confident is in that the of North creeping and European to next And the really going there

Daniela Costa

Got it. Thank you very much.

Operator

next Bank Michael of the Feniger of comes And question America. from today

Michael Feniger

we issue taking for Thanks the guide, my guys. sprayer the Brazil. Scott, Hey, just kept questions. can frame sales XXXX in but highlighted you you

the year you full curious if could guide? of having an on that's how impact Just frame kind of much

Scott Wine

right sprayers in it the year -- full out into like and issue, get for the and we allotment said short-term the are I shipping questions, to a sprayer reasons, remarks I guide. prepared quarter. the the some probably done follow-on third on was we'll of the we'll but in some mean, that make customers those fourth in the Zero we're full already issue the -- up impact -- and

again. took was have We So in in Brazil medicine that. don't quarter, that we the to take so our it

are a doing on accelerate in second to I market retail plans, job So share team half. continue really to about share. dealer Rafale really gains inventories got it's performance. there the nice We've great and driving down think

leaner inventories share should performance. with get better therefore and better we also So

second of the be in neither those one So half. repeated would feel we

there going are into tailwinds fact the half. second for actually In

Michael Feniger

of seems dealer And approach categories that categories? we chart Great. you year-over-year like terms to taking just slide on when inventories, inventories equipment you're different we and do on does it Scott, dealer show, the equipment the -- a fourth with think we quarter, get company a proactive and those when your of The look inventories. in how level, how

Scott Wine

at of crop kind we're peak they're that Remember, some the on anticipating are of still We levels. cash behind.

better. will attachment seen better lot -- rates it's of we we customer just still we've benefits to inventory. low keep trying on side, of So we and price -- dealer goodness But increase on we'll inventories other a balance, get happen lean, what It's the our whole some inventory it, keep the decrease we're When right? horsepower will high-horsepower flooring the lower get cost. is,

So dealer is continued of we inventory. part mean in management I guidance, included of will healthy or some cases management -- our what we have healthy improved in

Michael Feniger

that a with just follow-up Scott. And

line sales how in production we'll thinking But of retail for -- see retail in retail terms versus your XXXX? how year just plays think year? Next out. next you you're in have your is with production to Obviously, of,

Scott Wine

would is That's -- pull and would our would I efficient to an lead to the But long be a It's could run complicated We that the it. mean we and be. to would we way whatnot. just I business if necessarily where run it's I like logistics, tell, aspiration. that on obviously, run but hard times just how system. direct with can't like to

Michael Feniger

Thank you.

Operator

De Blair. Maria next question Larry comes of from The William

Larry De Maria

Thanks. Good morning, everybody.

Are some yet, question. orders commercial there? this with they spray next if just plan is if looking programs collaboration. When there's how First, next And green the taking for to out just I any that? that, curious Smart year year launch one you are and -- to they're think are on Spray targeted spraying, for and competitors out with green out related any

Scott Wine

Yes.

the quarter, into second partly for maybe quarter we taking a the first -- sprayers. So are first little

So, good. that's

think disclosed, integrated. how not don't have spray know we quickly partly we -- we're and going it's solution one have are I that We to because

in -- Sprayer are reminder a experts technology. Raven is though, at Just

with we delayed in that a Bosch don't we but -- recognize that scheduled be launch market not feel yet, and before that will -- confident in relationship to as had quickly even any a can. us. as have for they we need but we So a competitive I there's get

Larry De Maria

you and strike to refreshed -- you deal And the tilt and lineup, full Okay. the your into year-end then you know you tractors. Thank on now you've I had like talk some you. of that's given multiyear trends then that if a of of obviously. with talk tractor said. you're the if kind some running a But or regain interruption the share? And just about think can about there? you event, or you can bit little you share, can

Scott Wine

back. about like weight because seeing ability were just or mean, our anyone is me, under-punching that we not I were to we the where But really we get get we share to there. some stickiness feel already we really of good No. to felt of our back acceptable that that We're our there. customers

seen an deliveries, level. improvements we're we've acceptable with it even at basis quality but mean a about I -- the points. that the the we June I call low egregiously an in gained -- to were back month of So getting wouldn't but XXX We've share,

start again So that levels got to opportunity us. to saw the And that incredibly from low that to going to we're but believe product And we we've to category we up. an It's in product. then, back to creep invest continue continue advance level. for important

So both technology and on iron the side. side the

customers. Magnum more team our we currently more that them product good about is us what see to really and and lead with to feel of to where are get we continue You'll then the in. doing out But

Larry De Maria

Okay. Thank Good luck. you.

Operator

of Berenberg. from next is Bruska question The Marta

Marta Bruska

a on color just you Hi, good Europe. could bit provide please I more morning. ask if would little

development the And channel that of due Europe next in that continue over year for product this year region moderate if one year I still market benefit for negative shows have So four to maybe upcycle rather can with the with normalizing positive year or or rather Is indicators from mix? is this potential the SG&A and your peers to years performance just please? year-to-date. some the so, flattish And broader then more. volume next

Oddone Incisa

picture many zones Ukraine, But East Europe. and some unfortunately as disrupted. Middle have we in line. we Africa potentially different Europe I in in would which the there's countries and also of is large always Marta, and interruption a course, Yes mixed And have say market this

And was this difficult have course, there. Southern a Europe presence most so, large I would we year. say of And

of we doing But France, stronger. was So Europe Spain, Italy, we work. a good some are whereas feel Northern that

the We of month in second particular in with dealers we feel doing of by year this the a in the June. had quarter have results we good been work our encouraged and

it was think beginning I from Scott. of the the at remarks prepared

will that retail are we So, and our stimulating we there situation we -- significantly. will think we improve really

Marta Bruska

want the year? make anything you. to And you more Financial is to and this Services of help of terms do is to then probably in Thank the investing some realize that still Brazil. volatile Can farmers regions adjustment moving an we

Oddone Incisa

voices hearing mute are somebody I together. we in because to go we that think are from two at line hearing side least our there's the needs

So and... you Brazil, about Marta talking were

Marta Bruska

to demand you protect Yes, more do managing lease the adjustments a that can into stimulate the same how do of whether at with kind you bit the and kind time. little term and of something

Oddone Incisa

smaller financing in with the subsidies. also as in always smaller year. programs know, quickly we financing. by with with and we And we is you retail financing subsidies Well, government what -- act customers for becoming as both are wholesale and influenced dealers our services, financial government our the they with and Brazil consumed the pretty retail call get

our are attractive in for we subsidies to competitive. in real those we help customers think offer We we dealers and the customers that -- had are that getting fetching fast service -- our can to extremely them. We getting very and in a

as sales. see our and a So, dealers brands service function we to their our ourselves to to support

Marta Bruska

Thank Thank That’s helpful. you, much. very you.

Operator

are for thank there Call. further as the questions does may and CNH conclude Second you Industrial Quarter And Conference disconnect. this at all your no participation that Earnings time you now We

CNH Industrial (CNH) 28 Jul 232023 Q2 Earnings call transcript