CNH Industrial NV (CNHI) 2022 Q3 法說會逐字稿

Good day, and welcome to CNH conference call. Today's call is being recorded. At this time, I will now turn the call over to Jason Omerza. Please go ahead, sir.

美好的一天，歡迎來到 CNH 電話會議。今天的通話正在錄音中。現在，我將把電話轉給 Jason Omerza。請繼續，先生。

Thank you, Alan. Good morning, and good afternoon to everyone. We would like to welcome you to the webcast and conference call for CNH Industrial's Third Quarter Results for the period ending September 30, 2022. This call is copyrighted by CNH Industrial and any other use, recording, or transmission of any portion of this broadcast without the expressed 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.

謝謝你，艾倫。大家早上好，下午好。我們歡迎您參加 CNH Industrial 截至 2022 年 9 月 30 日的第三季度業績的網絡直播和電話會議。本次電話會議的版權歸 CNH Industrial 所有，未經授權不得擅自使用、錄製或傳輸本次廣播的任何部分嚴禁 CNH Industrial 明確書面同意。主持今天電話會議的是 CNH Industrial 的首席執行官 Scott Wine；和首席財務官，Oddone Incisa。他們將使用可從 CNH Industrial 網站下載的材料。

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 report 20-F and EU Annual report, as well as other periodic reports and filings with the U.S. Securities and Exchange Commission and the equivalent authorities in the Netherlands and Italy. The company presentation includes certain non-GAAP financial measures. Additional information, including reconciliations to the most directly comparable U.S. GAAP financial measures is included in the presentation material.

請注意，我們在今天的電話會議中可能做出的任何前瞻性陳述都受到演示材料中安全港聲明中提到的風險和不確定性的影響。有關可能導致實際結果出現重大差異的因素的其他信息包含在公司最近的報告 20-F 和歐盟年度報告，以及其他定期報告和向美國證券交易委員會和美國同等當局提交的文件中荷蘭和意大利。公司介紹包括某些非 GAAP 財務措施。演示材料中包含其他信息，包括與最直接可比的美國公認會計原則財務措施的調節。

I will now turn the call over to Scott.

我現在將把電話轉給斯科特。

Thank you, Jason, and thanks, everyone, for joining the call. It's actually better now that I have my mic turned on. It is not lost on me that we are hosting this call on election day in the United States, following similar activities and some appointments in other countries that impact our business. This is relevant to the outstanding results we will discuss this morning and that the CNH team is proving its capabilities to successfully navigate a myriad of complex challenges. We are not immune from the external impact of geopolitical risks, inflation, supply chain constraints and economic downturns, but the strength of both the global Ag markets and our team, technology, products and brands are nice assets to have right now.

謝謝 Jason，也感謝大家加入電話會議。現在我打開麥克風實際上好多了。我並沒有忘記我們在美國選舉日主持這次電話會議，此前其他國家的類似活動和一些任命影響了我們的業務。這與我們今天上午將討論的出色成果相關，CNH 團隊正在證明其成功應對無數複雜挑戰的能力。我們無法免受地緣政治風險、通貨膨脹、供應鏈限制和經濟衰退的外部影響，但全球農業市場和我們團隊、技術、產品和品牌的實力都是目前值得擁有的好資產。

We finished the quarter with record consolidated revenues for any third quarter in the history of our Ag and Construction business of $5.9 billion, up 29% at constant currency. While we are finally seeing some modest improvement in our supply chain, it is our team's depth execution that enables these results in the face of unrelenting inflation and volatile currencies. We are confident in our ability to continue to minimize these disruptions, maintain our momentum and deliver for our customers.

本季度結束時，我們的農業和建築業務歷史上任何第三個季度的綜合收入都創下了 59 億美元的記錄，按固定匯率計算增長了 29%。雖然我們終於看到我們的供應鏈有所改善，但面對無情的通貨膨脹和波動的貨幣，正是我們團隊的深度執行使這些結果得以實現。我們相信我們有能力繼續將這些干擾降到最低，保持我們的勢頭並為我們的客戶提供服務。

Trends still indicate a strong Ag cycle with sustained demand for most products. We are closely watching for any recession-related shifts in purchasing behavior. I will again stress that historically our business performance is driven more by the Ag cycle than by GDP growth or like thereof. In any case, we will be prepared to traverse whatever the macro environment throws at us. Both agriculture and construction generated positive volume and mix and pricing of 16% more than offset the steep increase in production cost. Additionally, gross margins benefited from the operational improvements. It was very encouraging to see our teams using Kaizen [Phonetic] to streamline the sales and operations planning process and reduce expedited freight cost. These drivers and other actions contribute to the Ag segment's record 25% gross margin in the quarter.

趨勢仍然表明對大多數產品的需求持續強勁的 Ag 週期。我們正在密切關注任何與經濟衰退相關的購買行為變化。我要再次強調，從歷史上看，我們的業務績效更多地是由農業周期驅動的，而不是 GDP 增長等。無論如何，我們將準備好應對宏觀環境拋給我們的任何問題。農業和建築業都產生了 16% 的積極數量和組合，並抵消了生產成本的急劇增加。此外，毛利率也受益於運營改善。看到我們的團隊使用 Kaizen [Phonetic] 來簡化銷售和運營計劃流程並降低加急貨運成本，這非常令人鼓舞。這些驅動因素和其他行動促成了本季度 Ag 部門創紀錄的 25% 毛利率。

We generated positive free cash flow, which is notable considering the seasonality, has historically led to cash consumption in the third quarter. We saw modest improvement in the supply chain compared to what we experienced in the first 2 quarters of the year. However, uncertainties about cost structure again forced us to restrict order windows, both to enhance our ability to deliver on time to our dealers and customers and to sustain a balanced price cost equation.

我們產生了正的自由現金流，考慮到季節性，這在歷史上導致了第三季度的現金消耗。與今年前兩個季度相比，我們看到供應鏈略有改善。然而，成本結構的不確定性再次迫使我們限制訂單窗口，這既是為了提高我們按時向經銷商和客戶交貨的能力，也是為了維持一個平衡的價格成本方程。

We introduced the new Trident spreader enabled with Raven Autonomy in August, which I will provide more color on in a minute. With the addition of Raven to our tech stack, we are making tremendous progress marrying our great iron with great technology. Thanks to the strength of our year-to-date performance and what we see for the remainder of the fourth quarter, we are improving our guidance for the full year and renewing our commitment to maintaining expenses at industry-leading levels while investing heavily in our future.

我們在 8 月推出了支持 Raven Autonomy 的新型 Trident 吊具，我將在一分鐘內提供更多顏色。通過將 Raven 添加到我們的技術堆棧中，我們正在將我們的偉大鋼鐵與偉大的技術結合起來取得巨大進步。由於我們年初至今的強勁表現以及我們對第四季度剩餘時間的看法，我們正在改進全年的指導，並重申我們的承諾，即在大力投資於我們的業務的同時，將支出維持在行業領先水平未來。

Derek Neilson and his agriculture team delivered another impressive quarter with net sales up 32% year-over-year at constant currency and year-over-year EBIT margins increasing 320 basis points. This was mainly driven by improving volume and strong price realization, which more than offset raw material and production cost headwinds. Overall, Ag demand remains robust, especially in Latin America and North America regions. Order books for tractors and combines are down versus last year, but that is primarily due to continued allocation of dealer orders and limited order windows.

德里克·尼爾森 (Derek Neilson) 和他的農業團隊又創造了一個令人印象深刻的季度，按固定匯率計算，淨銷售額同比增長 32%，息稅前利潤率同比增長 320 個基點。這主要是由於銷量增加和價格實現強勁，這大大抵消了原材料和生產成本的不利因素。總體而言，銀需求依然強勁，尤其是在拉丁美洲和北美地區。拖拉機和聯合收割機的訂單與去年相比有所下降，但這主要是由於經銷商訂單的持續分配和有限的訂單窗口。

Our strategic focus on technology leadership and customer-inspired innovation was showcased in several of our third quarter agricultural product launches. Demonstrating our integration with Raven at Farm Progress, we launched the Case IH Trident 5550 applicator with Raven autonomy, the industry's first driverless spreader. This best-in-class combination applicator makes Level 4 supervisor autonomy more accessible, bridging the gap between traditional iron and multipurpose driverless power platforms. Parag Gar is doing an excellent job of ensuring that CNH and Raven teams are fully linked in development of cutting-edge solutions to farmer problems. This synergy enabled Raven to take the technology and experience from their omnipower driverless platform and apply it to our traditional equipment lineup. With all elements of our tech stack working in concert, it's fundamentally simpler for our team to develop and support autonomous solutions.

我們在第三季度的幾個農產品發布會上展示了我們對技術領先和受客戶啟發的創新的戰略重點。為了在 Farm Progress 上展示我們與 Raven 的集成，我們推出了具有 Raven 自主功能的 Case IH Trident 5550 塗抹器，這是業界首款無人駕駛吊具。這種一流的組合應用程序使 4 級主管自主權更容易獲得，彌合了傳統鐵和多用途無人駕駛動力平台之間的差距。 Parag Gar 在確保 CNH 和 Raven 團隊在開發針對農民問題的尖端解決方案方面充分聯繫方面做得非常出色。這種協同作用使 Raven 能夠從他們的全能無人駕駛平台中汲取技術和經驗，並將其應用到我們的傳統設備系列中。通過我們技術堆棧的所有元素協同工作，我們的團隊開發和支持自主解決方案從根本上變得更加簡單。

New Holland redesigned its lineup of Guardian front boom sprayers to feature new technological and precision capabilities. These sprayers integrate Raven's advanced precision technologies like guidance and steering, nozzle control and complete operational connectivity with New Holland's trademark high horsepower and large tanks. Our suite of technology accumulates the data and process it through Raven's connected workflow system to increase efficiency through better equipment utilization and more acre spread per day.

New Holland 重新設計了其 Guardian 前噴桿噴霧器系列，以採用新技術和精確功能。這些噴霧器集成了 Raven 的先進精密技術，如引導和轉向、噴嘴控制以及與 New Holland 標誌性的大馬力和大型水箱的完整操作連接。我們的技術套件積累數據並通過 Raven 的連接工作流系統對其進行處理，以通過更好的設備利用率和每天更多的播種面積來提高效率。

On the specialty products side, Case IH launched the Austoft Series 9000 line of sugarcane harvesters with new automated hydraulics, connectivity, high performance and best-in-class efficiency. Having recently been down to visit with farmers and our team in Brazil, I can say firsthand that our harvesting portfolio is second to none.

在特種產品方面，Case IH 推出了 Austoft Series 9000 系列甘蔗收割機，具有全新的自動化液壓系統、連接性、高性能和一流的效率。最近去拜訪了巴西的農民和我們的團隊，我可以直接說我們的收割組合是首屈一指的。

What you see here is the acceleration of our best-in-class precision agriculture capabilities, both in terms of developing a new era of products and improving our ability to expand margins and capture market share. Stefano Pampalone and our construction team continue to perform at elevated level. With sharp focus on customer-inspired innovation, operational excellence and dealer engagement, the team is effectively building a platform for profitable growth.

你在這裡看到的是我們一流的精準農業能力的加速發展，無論是在開發新時代的產品方面，還是在提高我們擴大利潤和占領市場份額的能力方面。 Stefano Pampalone 和我們的施工團隊繼續保持高水平表現。該團隊高度關注以客戶為靈感的創新、卓越運營和經銷商參與，有效地構建了一個實現盈利增長的平台。

In the quarter, net sales increased 20% on a constant currency basis over 2021, with pricing offsetting higher production costs. Adjusted EBIT in the quarter was $24 million with a 2.7% EBIT margin, benefiting from strong sales in North America and considerable contributions from Sampieran aacquisition, which still constrained by -- but it's still constrained by supply chain disruptions. Construction order books are open through the second quarter of 2023 in most markets with robust order coverage, especially in North and South America.

本季度，按固定匯率計算，淨銷售額比 2021 年增長 20%，定價抵消了較高的生產成本。本季度調整後的息稅前利潤為 2400 萬美元，息稅前利潤率為 2.7%，這得益於北美的強勁銷售以及 Sampieran 收購的可觀貢獻，這仍然受到——但它仍然受到供應鏈中斷的製約。在大多數訂單覆蓋面廣的市場，尤其是北美和南美，建築訂單簿開放至 2023 年第二季度。

In the third quarter, we started selling Sampierana mini excavators in Europe under the Case and New Holland brands, and we opened a new assembly line to increase capacity for those products. With this greater throughput, we will begin exporting those products to other regions next year.During last quarter's call, I teased the launch of the Case Minotaur compact dozer loader and that revolutionary new product has been enthusiastically received by our dealers.

第三季度，我們開始在歐洲銷售 Case 和 New Holland 品牌的 Sampierana 小型挖掘機，我們開設了一條新的裝配線以提高這些產品的產能。憑藉更大的吞吐量，我們明年將開始向其他地區出口這些產品。在上個季度的電話會議上，我調侃了 Case Minotaur 緊湊型推土機裝載機的推出，這款革命性的新產品受到了我們經銷商的熱烈歡迎。

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

我現在將把電話轉給 Oddone，讓我們了解一些財務結果。

Thank you, Scott, and good morning and good afternoon to everyone in the call. Third quarter net sales of industrial activities of $5.4 billion were up more than $1 billion or 24% year-over-year despite foreign currency headwinds of around 5%. Effective price realization was the main driver for our top line growth, but volume and mix also accounted for around 13% increase.

謝謝你，斯科特，早上好，下午好。第三季度工業活動淨銷售額為 54 億美元，同比增長超過 10 億美元或 24%，儘管外匯逆風約為 5%。有效價格實現是我們收入增長的主要驅動力，但數量和組合也貢獻了約 13% 的增長。

For our Industrial segment, gross profit was $1.2 billion with a margin of 23%. This $356 million year-over-year increase was a 260 basis points improvement, largely achieved for favorable pricing, which offset a continued escalation in production cost. Adjusted EBIT came in at $670 million, up $250 million from the third quarter of 2021, with a corresponding EBIT margin of 12.4%, up 270 basis points versus third quarter of last year.

對於我們的工業部門，毛利潤為 12 億美元，利潤率為 23%。這 3.56 億美元的同比增長是 260 個基點的增長，主要是由於有利的定價而實現的，這抵消了生產成本的持續上升。調整後的息稅前利潤為 6.7 億美元，比 2021 年第三季度增加 2.5 億美元，相應的息稅前利潤率為 12.4%，比去年第三季度增加 270 個基點。

Free cash flow from industrial activities was $202 million, and industrial activities net debt ended at $1.3 billion, an increase of $146 million compared to December 31, 2021. And this increase in net debt over the 9 months was largely related to seasonal working capital, payment of dividends and share repurchases, partially offset by segment profits. Adjusted net income for the quarter was $557 million with adjusted diluted earnings per share of $0.41, up $0.07 year-over-year on the back of better operating performance. Available liquidity as of September 30, 2022, was $8.6 billion.

來自工業活動的自由現金流為 2.02 億美元，工業活動淨債務為 13 億美元，比 2021 年 12 月 31 日增加了 1.46 億美元。這 9 個月的淨債務增加主要與季節性營運資金有關，支付股息和股份回購，部分被分部利潤抵消。本季度調整後淨收入為 5.57 億美元，調整後攤薄每股收益為 0.41 美元，由於經營業績更好，同比增長 0.07 美元。截至 2022 年 9 月 30 日，可用流動資金為 86 億美元。

On Slide 8, we have the industrial activities adjusted EBIT progression from Q3 2021 to Q3 2022. In both Agriculture & Construction, strong price realization continued to shield us from the steep increase in production cost, while our manufacturing and sales teams managed to improve volumes at the same time.

在幻燈片 8 中，我們將工業活動從 2021 年第三季度調整為 2022 年第三季度的息稅前收益。在農業和建築業，強勁的價格實現繼續保護我們免受生產成本急劇增加的影響，而我們的製造和銷售團隊設法提高了銷量同時。

SG&A and R&D expenses were higher, tied to Precision Act portfolio, investments and costs connected to newly acquired businesses. SG&A as a percentage of sales came in below our 7.5% target as we continue to manage costs wisely in front of increased activity levels. Agricultural's adjusted EBIT was $666 million with a margin of 14.8%. This $251 million increase, a 60% improvement year-over-year was driven by both favorable pricing and higher volumes, partially offset by higher production costs and SG&A, and of course, R&D expenses.

SG&A 和 R&D 費用較高，與 Precision Act 投資組合、投資和與新收購業務相關的成本有關。 SG&A 佔銷售額的百分比低於我們 7.5% 的目標，因為我們在活動水平增加的情況下繼續明智地管理成本。農業的調整後息稅前利潤為 6.66 億美元，利潤率為 14.8%。這 2.51 億美元的增長，同比增長 60%，是由有利的定價和更高的銷量推動的，部分被更高的生產成本和 SG&A，當然還有研發費用所抵消。

Gross profit was up $340 million from the same quarter last year, reaching $1.1 billion for the 3 months to September. The adjusted gross margin of 25% was a quarterly record for agriculture. Construction equipment adjusted EBIT was up $3 million to $24 million with a margin of 2.7%, consistent with last year. Like in agriculture, result in construction equipment were driven by favorable volume and positive price realization, but were offset by the higher production cost and constrained unit production at some plants in North America and South America.

截至 9 月的三個月，毛利潤比去年同期增加 3.4 億美元，達到 11 億美元。調整後的毛利率為 25%，創下了農業的季度記錄。建築設備調整後息稅前利潤增長 300 萬美元至 2400 萬美元，利潤率為 2.7%，與去年持平。與農業一樣，建築設備的業績受到有利的銷量和積極的價格實現的推動，但被較高的生產成本和北美和南美一些工廠的單位產量限制所抵消。

For our Financial Service business, net income was $86 million, down $10 million compared to the third quarter last year, mainly because of lower margins in North America, increased overheads and normalized risk cost. These headwinds were partially offset by robust volumes across all regions as well as higher recoveries on used equipment sales.

對於我們的金融服務業務，淨收入為 8600 萬美元，與去年第三季度相比下降了 1000 萬美元，這主要是因為北美的利潤率較低、管理費用增加以及風險成本正常化。這些不利因素部分被所有地區強勁的銷量以及二手設備銷售的更高回收率所抵消。

Retail originations were $2.5 billion in the quarter and $7.1 billion year-to-date. And the managed portfolio including JVs at the end of the period was $21.2 billion, up $2.4 billion compared to September 30, 2021 on a constant currency basis. Delinquencies were down roughly 6 basis points year-over-year to 1.3% of the portfolio and remain at historically low level.

本季度零售額為 25 億美元，年初至今為 71 億美元。期末包括合資企業在內的管理投資組合為 212 億美元，與 2021 年 9 月 30 日相比按固定匯率計算增加 24 億美元。拖欠率同比下降約 6 個基點至投資組合的 1.3%，並保持在歷史低位。

Free cash flow from industrial activities was $202 million on the back of strong EBIT performance. Finished good inventories buildup is typical on the third quarter but was partially offset by the initial reduction of manufacturing vendoring from the heightened levels at the end of the previous quarter. We still have a substantial amount of semifinished products amid the supply chain constraint, but again, manufacturing inventory is down on a sequential quarter basis. Total gross debt was $20.9 billion at September 30, and industrial activities net debt position was $1.3 billion.

由於強勁的息稅前利潤表現，來自工業活動的自由現金流為 2.02 億美元。成品庫存增加在第三季度很典型，但部分被製造業供應商從上一季度末的高水平開始減少所抵消。在供應鏈受限的情況下，我們仍有大量半成品，但製造業庫存環比下降。截至 9 月 30 日，總債務為 209 億美元，工業活動淨債務頭寸為 13 億美元。

To conclude my remarks, I will review our capital allocation priorities where we continue to invest in our business and our CapEx and R&D expenditures keep increasing year-over-year as forecast. The largest increase in R&D is on digital technologies and we expect this to continue. As part of the Board approved $300 million share repurchase program, the company bought back shares for $76 million in the third quarter and continued doing so in the month of October.

在結束我的發言時，我將回顧我們的資本分配優先事項，我們將繼續投資於我們的業務，我們的資本支出和研發支出如預測的那樣逐年增長。研發增幅最大的是數字技術，我們預計這種情況會持續下去。作為董事會批准的 3 億美元股票回購計劃的一部分，公司在第三季度以 7600 萬美元的價格回購了股票，並在 10 月份繼續這樣做。

Now I will turn it back to Scott.

現在我將把它轉回給斯科特。

Thank you, Oddone. The demand environment remains healthy and we are working diligently to fulfill customer commitments. While soft commodity prices declined in the third quarter, they remained above pre-pandemic and year-end 2021 levels. As commodity prices drop and input cost increase, farm productivity and yield become ever more important, creating a compelling case for our array of precision technology that improves farmer efficiency and profitability.

謝謝你，奧多內。需求環境保持健康，我們正在努力履行客戶承諾。儘管軟商品價格在第三季度有所下降，但仍高於大流行前和 2021 年底的水平。隨著商品價格下降和投入成本增加，農場生產力和產量變得越來越重要，為我們提高農民效率和盈利能力的一系列精密技術創造了令人信服的案例。

In North America, we sustained demand for high horsepower tractors, while industry-wide OEM supply and dealer inventories remain low, and we expect that to continue. Demand in South America continues to be impressively strong. In construction, demand trends are mixed as we expect the residential and commercial market to decline while the housing market adjusts to rising interest rates. However, public construction should fill in many of those gaps as spending from the U.S. infrastructure bill ramps up.

在北美，我們對大馬力拖拉機的需求持續存在，而整個行業的 OEM 供應和經銷商庫存仍然很低，我們預計這種情況將持續下去。南美洲的需求繼續強勁。在建築方面，需求趨勢喜憂參半，因為我們預計住宅和商業市場將下滑，而房地產市場將根據利率上升進行調整。然而，隨著美國基礎設施法案支出的增加，公共建設應該會填補其中的許多缺口。

For our full year guidance, we are raising our industrial net sales range as demand remains strong and price realization is favorable despite lower U.S. dollar conversion of international sales. We are improving our SG&A guidance to under 7.5% of sales and are confirming our combined R&D and CapEx guidance for the year. Our free cash flow guidance is unchanged as we are confident in our ability to improve deliveries to customers and reduce inventories that have escalated due to supply chain constraints.

對於我們的全年指導，我們正在提高我們的工業淨銷售額範圍，因為儘管國際銷售額的美元轉換率較低，但需求依然強勁且價格實現有利。我們正在將我們的 SG&A 指南提高到銷售額的 7.5% 以下，並確認我們今年的綜合研發和資本支出指南。我們的自由現金流指引沒有改變，因為我們有信心改善對客戶的交付並減少因供應鏈限製而增加的庫存。

We are absolutely not reinstating long-term EPS guidance. But with only 2 months left, we can now say that we expect full year adjusted EPS for 2022 to be between $1.43 and $1.45. Despite pessimistic economic outlooks in many of the countries and regions where we do business, we anticipate solid demand next year. Inflation will continue to be a factor in 2023, but we should benefit from high soft grain prices and the outlook for farmer and dealer profitability remains healthy. We expect to again contend with supply chain disruptions, but see them progressively improving, and we think channel inventories will stay tight for most of the year. As mentioned, we have recently opened our order books into Q3 of 2023 in several regions, so are gaining visibility into next year's strong demand.

我們絕對不會恢復長期 EPS 指導。但只剩下 2 個月了，我們現在可以說，我們預計 2022 年全年調整後每股收益將在 1.43 美元至 1.45 美元之間。儘管我們開展業務的許多國家和地區的經濟前景悲觀，但我們預計明年需求強勁。通貨膨脹將在 2023 年繼續成為一個因素，但我們應該受益於高軟糧價格，農民和經銷商的盈利前景依然健康。我們預計將再次應對供應鏈中斷，但看到它們正在逐步改善，我們認為渠道庫存將在今年大部分時間保持緊張。如前所述，我們最近在幾個地區開放了 2023 年第三季度的訂單，因此可以看到明年的強勁需求。

We will continue to invest in our future, both by expanding and augmenting our precision Ag portfolio and boldly creating the next generation of agriculture and construction products. We will maintain a watchful eye for signs of recession and will be prepared to adjust our operations as needed.

我們將繼續投資於我們的未來，既擴大和增強我們的精密 Ag 產品組合，又大膽創造下一代農業和建築產品。我們將密切關注經濟衰退的跡象，並準備根據需要調整我們的運營。

We recently held our first supplier conventions to externally launch our strategic sourcing program. We met with nearly 800 existing and potential suppliers from 37 countries, outlining our new approach to build a stronger and more resilient supply chain that will help us and our suppliers deliver the best total value for the world's farmers and builders. As most everyone is aware, in May, the United Auto Workers Union initiated a strike at our Racine and Burlington facilities. Our goal has always been to get our employees back to work with a contract that is fair and sustainable. And we have been working diligently, but so far unsuccessfully to make that happen. We continue to seek resolution while executing our contingency plans to remain operational and work toward meeting customer commitments. All costs associated with strike and future wage hikes are factored into our guidance.

我們最近舉行了第一次供應商大會，以對外啟動我們的戰略採購計劃。我們會見了來自 37 個國家的近 800 家現有和潛在供應商，概述了我們建立更強大、更具彈性的供應鏈的新方法，這將幫助我們和我們的供應商為世界農民和建築商提供最佳總價值。大多數人都知道，5 月，美國汽車工人聯合會在我們的拉辛和伯靈頓工廠發起了罷工。我們的目標一直是讓我們的員工在一份公平和可持續的合同下重返工作崗位。我們一直在努力工作，但迄今為止未能成功實現這一目標。我們在執行應急計劃的同時繼續尋求解決方案，以保持運營並努力履行客戶承諾。與罷工和未來工資上漲相關的所有成本都已納入我們的指導。

We announced today that we are voluntary transitioning to U.S. periodic reporting disclosures, which means we will start filing 10-Ks and 10-Qs with the Securities and Exchange Commission. After completing the spinoff of the on-highway business into the IVECO Group earlier this year, the company has refocused as an agriculture and construction equipment leader with a highly significant U.S. presence. Reporting according to the standards for U.S. public companies is more consistent with the company's profile and investor base. This change is another step on the journey to be a more straightforward corporate structure and enhanced shareholder value.

我們今天宣布，我們自願過渡到美國定期報告披露，這意味著我們將開始向美國證券交易委員會提交 10-Ks 和 10-Qs。在今年早些時候將公路業務分拆到 IVECO Group 後，該公司已重新定位為農業和建築設備領導者，在美國擁有舉足輕重的地位。根據美國上市公司的標准進行報告更符合公司的概況和投資者基礎。這一變化是朝著更直接的公司結構和更高的股東價值邁出的又一步。

On December 7th, we will be hosting a Tech Day in Arizona to showcase our impressive array of technology offerings and display what the future holds. We have made great strides since our Capital Markets Day in February and look forward to demonstrating our progress.

12 月 7 日，我們將在亞利桑那州舉辦技術日，展示我們令人印象深刻的技術產品系列並展示未來。自 2 月份的資本市場日以來，我們取得了長足的進步，並期待展示我們的進步。

That concludes our prepared remarks, and we will now open the line for questions. Alan, please go ahead.

我們準備好的發言到此結束，現在我們將打開提問熱線。艾倫，請繼續。

[Operator Instructions] we'll take our first question from Steven Fisher from UBS. Your line is open. Please go ahead.

[操作員說明] 我們將從瑞銀的 Steven Fisher 那裡回答我們的第一個問題。你的線路是開放的。請繼續。

Great. Thanks. Good morning. So you mentioned the Ag order book is down year-over-year. It sounds like you're restricting orders because the cost scenario is unclear. Can you just talk about kind of what part of the cost scenario remains the most uncleared? Is it labor? And I would think your material costs are maybe somewhat more estimable at this point, or is it freight? And to what extent do you think this pause in order and backlog is just temporary?

偉大的。謝謝。早上好。所以你提到 Ag 訂單同比下降。聽起來您正在限制訂單，因為成本方案不明確。您能否談談成本方案的哪一部分仍然最不清楚？是勞動嗎？我認為此時您的材料成本可能更容易估算，還是運費？您認為訂單和積壓的這種暫停在多大程度上只是暫時的？

Steve n, there was actually 2 parts to -- I mean, not -- I'm going to answer your question, but I want to just clarify what I tried to communicate. There's 2 issues impacting the order backlog right now. One is, of course, what you just attributed to is us trying to maintain a price cost balance. But the other one, and it's important is, we're still allocating many of our orders. And if I'm having conversations with dealers, it's more about allocation and that's what's really happening to our ability to increase the backlog. So it's both the order book and us continuing to allocate orders, we do that.

Steve n，實際上有兩個部分——我的意思是，不是——我要回答你的問題，但我只想澄清我試圖傳達的內容。目前有 2 個問題影響訂單積壓。當然，一個是您剛才歸因於我們試圖維持價格成本平衡。但另一個重要的是，我們仍在分配許多訂單。如果我與經銷商進行對話，更多的是關於分配，而這正是我們增加積壓的能力所發生的事情。所以這既是訂單簿，也是我們繼續分配訂單，我們這樣做。

What we're seeing in the supply chain is certainly -- and I said it is some improvement sequentially, and we expect that to continue. But as we do see quite frequently, energy prices in Europe are a big issue for us that we've got to understand not just how it affects us because we can certainly manage it. But really it's how it impacts our suppliers. Obviously, currency risk, we've proven our ability to manage it, but we just want to make sure we have all of an understanding of these elements as they're coming in and make sure that we're protected and our customers are protected.

我們在供應鏈中看到的肯定是 - 我說過這是連續的一些改進，我們希望這種情況會繼續下去。但正如我們經常看到的那樣，歐洲的能源價格對我們來說是一個大問題，我們不僅要了解它如何影響我們，因為我們當然可以管理它。但實際上這就是它如何影響我們的供應商。顯然，貨幣風險，我們已經證明了我們管理它的能力，但我們只是想確保我們對這些因素的到來有充分的了解，並確保我們受到保護，我們的客戶也受到保護.

Okay. That's helpful. And then maybe just thinking about the fourth quarter here, if I'm working the math correctly, it looks like going into the fourth quarter maybe your Ag margins might be implied to be down a few hundred basis points. Do I have that correct? And can you just give us some of the puts and takes that bridges from your strong quarter in margins this quarter to what's implied in the fourth quarter?

好的。這很有幫助。然後也許只是在這裡考慮第四季度，如果我計算正確的話，看起來進入第四季度可能意味著您的 Ag 利潤率可能會下降幾百個基點。我說的對嗎？您能否給我們一些看跌期權，並從本季度的強勁利潤率季度到第四季度的隱含利潤率中架起橋樑？

Steve, we don't expect to have Ag margins down compared to last year for sure in the fourth quarter.

史蒂夫，我們預計第四季度的 Ag 利潤率肯定不會比去年下降。

Or sequentially.

或順序。

They may be marginally sequentially down depending on the mix of products that we will have -- but I wouldn't speculate too much on how the margin will evolve in the fourth quarter. I think it's very important to show -- to remark that it constantly increasing margins that we have had and that is part of our plan and what we presented back in February for getting to higher margin levels by 2024, and we are delivering on that.

根據我們將擁有的產品組合，它們可能會略有下降——但我不會過多地推測第四季度利潤率將如何演變。我認為非常重要的是要表明——要指出它不斷增加我們的利潤率，這是我們計劃的一部分，也是我們在 2 月份提出的到 2024 年達到更高利潤率水平的計劃的一部分，我們正在實現這一目標。

Okay. Thank you.

好的。謝謝你。

We'll take our next question from Nicole DeBlase from Deutsche Bank. Your line is open. Please go ahead.

我們將從德意志銀行的 Nicole DeBlase 那裡回答下一個問題。你的線路是開放的。請繼續。

Yes, thanks. Good morning.

對了謝謝。早上好。

Good morning.

早上好。

Can we just talk a little bit more about Europe? Obviously, a lot of concern about potential for demand deterioration in the region. Could you talk a little bit more, Scott, about what you guys saw in the quarter, both within Ag and construction? And any signs of slowdown whatsoever?

我們能多談談歐洲嗎？顯然，很多人擔心該地區需求惡化的可能性。斯科特，你能多談談你們在本季度看到的東西，包括農業和建築業嗎？有任何放緩的跡象嗎？

Yes. We have -- we said it last quarter, and I'll say it again. Where we see weakness is in the lower horsepower tractors. That's been a segment that was extremely strong through the latter parts of the pandemic and we kind of expect that to fill up. That's where we're seeing the most weakness. I just got a note this morning about -- from one of my team and I was in San Francisco on the weekend speaking to the dealers from South America. And there, this is dealer sentiment and the desire for more products heading into '23 is extremely high. So I think for high horsepower tractors and the cash crop business, we still see very strong demand and no signs of slowing down. Obviously, there's pockets in Europe where we are a little bit weaker. That's more of the hay and forage space. And we are managing that very closely. But overall on an aggregate basis, demand remains quite strong.

是的。我們已經 - 我們在上個季度說過，我會再說一遍。我們看到的弱點是低馬力拖拉機。在大流行的後期，這是一個非常強大的部分，我們有點希望它能填滿。這就是我們看到的最大弱點。我今天早上剛收到一張紙條——來自我的一個團隊，週末我在舊金山與來自南美的經銷商交談。這就是經銷商的情緒，對進入 23 世紀的更多產品的渴望非常高。因此，我認為對於大馬力拖拉機和經濟作物業務，我們仍然看到非常強勁的需求，並且沒有放緩的跡象。顯然，在歐洲，我們的實力稍弱一些。那是更多的干草和草料空間。我們正在非常密切地管理它。但總的來說，需求仍然相當強勁。

Got it. Thanks. And then just a follow-up on pricing, still really strong for you guys. I guess, what is the expectation for carryover pricing into 2023? And I suspect that price/cost should be a positive from a margin perspective again next year. Is that correct?

知道了。謝謝。然後只是跟進定價，對你們來說仍然非常強大。我想，到 2023 年結轉定價的預期是什麼？而且我懷疑明年從利潤率的角度來看價格/成本應該再次是積極的。那是對的嗎？

Again, we have been delivering on price costs over the last few quarters. We expect to at least pair cost increase with pricing in the fourth quarter, and we will maintain pricing dividends into 2023.

同樣，我們在過去幾個季度一直在交付價格成本。我們預計至少在第四季度將成本增加與定價相結合，我們將在 2023 年保持定價紅利。

Thanks. I'll pass it on.

謝謝。我會傳下去的。

We'll take our next question from Martino De Ambroggi from Equita. Your line is open. Please go ahead.

我們將從 Equita 的 Martino De Ambroggi 那裡回答下一個問題。你的線路是開放的。請繼續。

Thank you. Good morning, good evening, everybody. The first is on prices, again, sorry, plus 17% in Ag in Q3, if it's not the historical peak we are very close to. So just to understand that you have visibility up to second quarter, you are already collecting orders. So I suppose, but tell me if I'm wrong that price will be able to offset raw mat inflation cost and so on at least for another couple of quarters, if not 3 in a row. First question.

謝謝你。大家早上好，晚上好。首先是價格，再次抱歉，如果不是我們非常接近的歷史峰值，第三季度 Ag 將增加 17%。因此，只要了解您在第二季度之前的可見性，您就已經在收集訂單了。所以我想，但請告訴我，如果我錯了，價格將能夠抵消原始墊的通貨膨脹成本等等，至少在另外幾個季度，如果不是連續三個季度的話。第一個問題。

The second, I know you do not provide any guidance for next year. But based on the -- your comments, I feel that you are confident to maintain, if not improve your margins -- your operating margins next year. I know there are too many moving parts, but am I right in assuming such a message or is too bullish?

第二，我知道你沒有為明年提供任何指導。但基於——你的評論，我覺得你有信心維持，如果不提高你的利潤率的話——你明年的營業利潤率。我知道有太多變動的部分，但我假設這樣的消息是正確的還是太樂觀了？

It is definitely bullish, Martino. But we -- again, we have built in pricing and we have had price increases. So we expect to be able to maintain pricing levels into next year. And -- but then we will see how the market evolves. I mean, it's we're not -- we are facing -- we are competing on a market. We have dealers we're working with, and there's a constant price negotiation there. So we will -- again, we are committed in improving our gross margin and improving our margins overall. We will have also -- we're working on getting better in our production systems. Scott mentioned in the prepared remarks, our business systems, our kaizens and our willingness to get leaner in production and get past most of the issues that we've had in our production facilities to the supply chain disruptions. And that's another source of improvement for next year.

馬蒂諾，這絕對是看漲的。但是我們 - 再一次，我們已經建立了定價並且我們已經提高了價格。因此，我們希望能夠將定價水平維持到明年。而且 - 但我們將看到市場如何發展。我的意思是，我們不是——我們正在面對——我們在市場上競爭。我們有正在與之合作的經銷商，並且那裡經常進行價格談判。因此，我們將再次致力於提高毛利率和整體利潤率。我們還將——我們正在努力改進我們的生產系統。斯科特在準備好的發言中提到，我們的業務系統、我們的改善以及我們願意在生產中變得更精簡，並克服我們在生產設施中遇到的供應鏈中斷的大部分問題。這是明年的另一個改進來源。

Okay. And another question is on net working capital, just to have a flavor of what could be the cash generation in the last quarter of the year, so because it's in excess of $1 billion, but I don't know if you are willing to narrow the reinsure [Phonetic] or what else?

好的。另一個問題是關於淨營運資本，只是想了解一下今年最後一個季度可能產生的現金，因為它超過了 10 億美元，但我不知道你是否願意縮小範圍再保險 [語音] 還是其他什麼？

Yes. So we are guiding to or committing to be in excess of $1 billion for the year. We are still negative over the 3 quarters, so we need to do more than $1 billion in the fourth quarter. We think most of it will come from working capital improvement and most of it will come from inventory depletion. And that's mainly manufacturing inventories where we have still staffing our production systems that needs to be completed and needs to be sold in the fourth quarter.

是的。因此，我們正在指導或承諾今年超過 10 億美元。我們在 3 個季度仍然是負面的，所以我們需要在第四季度做超過 10 億美元的事情。我們認為其中大部分將來自營運資本的改善，而其中大部分將來自庫存消耗。這主要是製造庫存，我們仍在為需要完成並需要在第四季度出售的生產系統配備人員。

And compared to the last call, you see relevant improvement in supply chain or is still struggling as it was in the previous quarter?

與上次電話會議相比，您是否看到供應鏈有相關改善，還是仍像上一季度那樣苦苦掙扎？

It's absolutely improving. We said in the pressed remarks the third quarter was better than the first and second quarter, and we expect that trend of improvement to continue going into '23.

這絕對是在進步。我們在新聞發布會上表示，第三季度比第一季度和第二季度要好，我們預計這種改善趨勢將持續到 23 年。

Okay. Thank you.

好的。謝謝你。

We'll take our next question from Tami Zakaria from J.P. Morgan. Your line is open. Please go ahead.

我們將從 J.P. Morgan 的 Tami Zakaria 那裡回答下一個問題。你的線路是開放的。請繼續。

Hi, good morning. Thank you so much for taking my questions. So my first question is going back to your order trends. I know you mentioned you are intentionally limiting orders and Ag is down 10% year-over-year. But can you give some color on small versus large Ag? Are you limiting orders for both? And let's see if you didn't limit orders, what would have been actual orders of like?

早上好。非常感謝你回答我的問題。所以我的第一個問題是回到你的訂單趨勢。我知道你提到你有意限制訂單，Ag 同比下降 10%。但是你能給小 Ag 和大 Ag 一些顏色嗎？您是否限制兩者的訂單？讓我們看看如果您不限制訂單，實際訂單會是多少？

Well, we did talk about demand slowing for the low horsepower tractors. So obviously, we're not limiting orders there because that's -- the dealers are improving their dealer inventory so they don't need -- even if we open up the order books, there wouldn't be a lot of massive orders when there's a slowdown in demand. But in high horsepower tractors I cannot speculate what they would be. All I can give you is the sentiment that I get when I talk to our dealers and actually often to our own team about the desire to increase output. Certainly, as I mentioned in the prepared remarks, in both the Americas, in North America, Latin America, demand for high horsepower tractors is incredibly strong and inventories are tight. And we think that situation is going to persist through most of 2023.

好吧，我們確實談到了低馬力拖拉機的需求放緩。很明顯，我們並沒有限制那裡的訂單，因為那是——經銷商正在改善他們的經銷商庫存，所以他們不需要——即使我們打開訂單簿，當有需求放緩。但在大馬力拖拉機中，我無法推測它們會是什麼。我能給你的只是當我與我們的經銷商交談時得到的情緒，實際上經常與我們自己的團隊談論增加產量的願望。當然，正如我在準備好的發言中提到的，在美洲、北美和拉丁美洲，對大馬力拖拉機的需求非常強勁，庫存緊張。我們認為這種情況將持續到 2023 年的大部分時間。

Understood. That's very helpful, Scott. And then if I can ask another quick one. It seems like price cost was positive for the Ag segment in the third quarter, but construction seems like probably wasn't price/cost positive yet. So any visibility into when you think that segment will become price/cost positive?

明白了。這很有幫助，斯科特。然後我能不能再問一個快速的問題。似乎第三季度 Ag 部門的價格成本是正的，但建築似乎可能還不是價格/成本正的。那麼您認為該細分市場何時會成為價格/成本正值的任何可見性？

Construction was price/cost positive in the quarter. They just are experiencing more of an impact with only 4 plants operating. They're having a bit more of an impact of some of the labor issues that we've experienced, and that caused them some pressure in the quarter.

本季度建築業的價格/成本為正。他們只是受到了更大的影響，只有 4 家工廠在運營。他們對我們經歷過的一些勞工問題產生了更大的影響，這給他們在本季度帶來了一些壓力。

Got it. Okay. Perfect. Thank you so much and congrats on an excellent quarter.

知道了。好的。完美的。非常感謝並祝賀一個出色的季度。

Thank you.

謝謝你。

We'll take our next question from Kristen Owen from Oppenheimer. Your line is open. Please go ahead.

我們將從奧本海默的克里斯汀歐文那裡接受我們的下一個問題。你的線路是開放的。請繼續。

Hi, good morning. Thank you for taking the questions. I wanted to come back to some of your comments around the new Raven introduction. Not to get too far ahead of the Tech Day, but can you elaborate on what some of those new offerings were? And then to the extent that you're willing to comment how the international expansion of that business is tracking?

早上好。感謝您提出問題。我想回到您對新 Raven 介紹的一些評論。不要在技術日之前走得太遠，但您能否詳細說明其中一些新產品是什麼？然後，您是否願意評論該業務的國際擴張進展如何？

We talked about the spreader that we introduced at at Farm Progress. But really, I mean don't forget, obviously, we're incredibly pleased to have Raven as part of the family. But we've been working with them a long time. So they have been enhancing our ability to make our sprayer technologies and capabilities significantly better for some time. But now that they're an integrated part of it, we're just able to take that extensive product technology reach that they have and spread it across the platform. One of the things we talked about is autonomy. And where they are -- the work that they had done with autonomy really elevated our game, and I wouldn't quite describe it as plug and play, but we really got an efficient way to bridge that across into our product categories. And we're excited to talk about that and many other things with Raven over time. The -- the expansion into Europe is going reasonably well, but we are -- I would say the supply chain challenges are probably impacting Raven a little bit more than the rest of our business. We're helping them. But certainly they would have greater sales in Europe if we weren't supply chain constrained given the access they have -- they now have to our distribution.

我們談到了我們在 Farm Progress 上推出的吊具。但實際上，我的意思是不要忘記，顯然，我們非常高興 Raven 成為這個家庭的一員。但我們已經與他們合作了很長時間。因此，他們一直在增強我們的能力，使我們的噴霧器技術和功能在一段時間內顯著改善。但現在他們是其中的一個組成部分，我們就能夠利用他們擁有的廣泛的產品技術範圍，並將其傳播到整個平台。我們談到的其中一件事是自治。他們在哪裡——他們在自治方面所做的工作確實提升了我們的遊戲水平，我不會將其描述為即插即用，但我們確實找到了一種有效的方式將其融入我們的產品類別。隨著時間的推移，我們很高興與 Raven 談論這個以及許多其他事情。 - 向歐洲的擴張進展順利，但我們 - 我會說供應鏈挑戰可能比我們其他業務對 Raven 的影響更大。我們正在幫助他們。但是，如果我們不受供應鏈的限制，他們肯定會在歐洲有更大的銷售額，因為他們現在擁有我們的分銷渠道。

That's really helpful. And then I noticed some of the moderated outlook for industry volume for the full year, particularly in North America and Europe tractor. You've talked a lot about some of the order book trends. But I'm wondering how much you're seeing that moderation push volume into 2023 versus how much of that is really just a function of that truncated order book?

這真的很有幫助。然後我注意到全年行業銷量前景有所緩和，特別是在北美和歐洲拖拉機。你已經談了很多關於一些訂單簿趨勢的問題。但我想知道你看到 2023 年的適度推動量有多少，而其中有多少實際上只是被截斷的訂單簿的一個功能？

Well, we are showing -- we are talking about industry volumes. So that's an overall industry issue. I think Scott talked extensively about the lower power tractor in North America, but largest power tractor we expect to -- we still have very strong demand. We expect to have strong demand. Europe is -- Continental Europe is affected by some reduction in demand in Ukraine, as you can imagine, but combined demand remains very strong for the year. So I would say with the exception of the lowest power tractor in North America, we still see strong demand overall in the most important markets for us.

好吧，我們正在展示 - 我們正在談論行業數量。所以這是一個整體的行業問題。我認為斯科特廣泛談論了北美的低功率拖拉機，但我們期望最大功率的拖拉機——我們仍然有非常強勁的需求。我們預計會有強勁的需求。歐洲——正如您可以想像的那樣，歐洲大陸受到烏克蘭需求減少的影響，但今年的綜合需求仍然非常強勁。所以我想說，除了北美最低功率的拖拉機外，我們仍然看到最重要市場對我們的總體需求強勁。

Great. Thank you.

偉大的。謝謝你。

We'll take our next question from Michael Feniger from Bank of America. Your line is open. Please go ahead.

我們將從美國銀行的 Michael Feniger 那裡回答下一個問題。你的線路是開放的。請繼續。

Yes. Thank you, guys, for taking my question. In the slide deck, you list priorities, including the transition of the filing of Form 10-K and 10-Q that wasn't in the slide deck in Q2. Just curious how we should think about that as you guys are evolving? And just what should we think about with the pros and cons around the dual listing with Milan. You're clearly operating well. You're lagging your peers. You're trading at a big discount. I'm just curious how management is kind of viewing that dual listing? And if there's a board meeting or a view that needs to occur? Just curious if you can kind of flesh out that dynamic.

是的。伙計們，謝謝你們回答我的問題。在幻燈片中，您列出了優先級，包括 10-K 和 10-Q 表格的提交過渡，這在第二季度的幻燈片中沒有出現。只是好奇我們應該如何考慮你們的發展？我們應該如何考慮與米蘭雙重上市的利弊。你顯然運作良好。你落後於你的同齡人。您正在以很大的折扣進行交易。我只是好奇管理層是如何看待雙重上市的？如果需要召開董事會會議或意見？只是好奇您是否可以充實這種動態。

Well, let me take the reporting question first. So we are starting this quarter in reporting under the U.S. Forbes. I think this is a request we got from many investors and analysts to be more comparable with some of our North American peers. Clearly, after the spin-off of the vehicle, we are and we need to be more comparable and compared with, in particular, the Ag peers, but also the construction peers that are listed in North America. So that's an effort to get into that direction of getting the format, the timing and even the disclosures that our peers have.

好吧，讓我先回答報告問題。因此，我們從本季度開始按照美國福布斯進行報導。我認為這是我們從許多投資者和分析師那裡得到的要求，以便與我們的一些北美同行更具可比性。顯然，在車輛分拆之後，我們需要更具可比性，尤其是與 Ag 同行以及在北美上市的建築同行進行比較。因此，這是朝著獲得我們同行所擁有的格式、時間甚至披露的方向努力。

Yes. And we've been, I don't know, fairly vocal the last several quarters that the dual listing is something that we've been evaluating and discussing with the Board. We had a Board meeting last week. We had a good review of the topic. And I would just -- as I said in the prepared remarks, I think this transition to SEC filing is part of that step in the right direction. And we're just -- we're evaluating if it's the right way to do it and what's the most efficient way for us to do it. And those are the 2 topics that we're evaluating. And I think that as we learn more and we make a decision on the matter, we'll certainly be forthcoming with it.

是的。我不知道，在過去的幾個季度裡，我們一直在相當直言不諱地表示，雙重上市是我們一直在與董事會評估和討論的事情。我們上週召開了董事會會議。我們對該主題進行了很好的審查。我只想——正如我在準備好的發言中所說，我認為向 SEC 備案的過渡是朝著正確方向邁出的一步。我們只是 - 我們正在評估它是否是正確的方法，以及什麼是我們最有效的方法。這些是我們正在評估的兩個主題。而且我認為，隨著我們了解更多並就此事做出決定，我們肯定會坦誠相待。

Appreciate that, Scott. And you guys are going to generate $1 billion of free cash flow, you'd be close to net debt free in 12 months or so. How do you balance with where the stock trades relative to your peers right now that discount with your other capital allocation priorities? How should we kind of think of how you view that relative to the other priorities that you're looking at with your cash flow? Thank you.

對此表示讚賞，斯科特。你們將產生 10 億美元的自由現金流，您將在 12 個月左右的時間內接近淨債務。您如何平衡當前股票相對於同行的交易價格與您的其他資本分配優先事項之間的折讓？我們應該如何看待您如何看待與現金流相關的其他優先事項？謝謝你。

I mean, it only walk through capital allocation priorities, and I think we've been pretty consistent. The first dollar we're going to spend is to drive future profitable growth for the company. We are investing a lot in CapEx and R&D. We'll continue to do that and ultimately driving margin expansion and market share through those investments is really the top priority. As it relates to -- as I've said, we're not going to go on a big acquisition spree, but -- and we've said and we've demonstrated, when we're trading below our intrinsic value, we think buying our own stock is a good investment, and we've leaned into that. We like to be a good dividend player and we like to maintain our debt rating. So we try to balance all of those. And I think you can bet that we'll continue to be diligent in how we do that. But the most important thing, you said it in your remarks, we do generate -- our business model allows us to generate a lot of cash flow, it gives us a choice on how we allocate it.

我的意思是，它只討論了資本分配的優先事項，我認為我們一直非常一致。我們要花的第一塊錢是為了推動公司未來的盈利增長。我們在資本支出和研發方面投入了大量資金。我們將繼續這樣做，最終通過這些投資推動利潤率擴張和市場份額確實是重中之重。正如它所涉及的——正如我所說的，我們不會進行大規模的收購狂潮，但是——我們已經說過並且已經證明，當我們的交易價格低於我們的內在價值時，我們認為購買我們自己的股票是一項很好的投資，我們已經傾向於這一點。我們希望成為一名優秀的股息參與者，我們希望維持我們的債務評級。所以我們試圖平衡所有這些。我認為您可以打賭，我們將繼續努力做到這一點。但最重要的是，你在發言中說過，我們確實產生了——我們的商業模式使我們能夠產生大量現金流，它讓我們可以選擇如何分配它。

Thank you.

謝謝你。

We'll take our next question from David Raso from Evercore ISI. Your line is open. Please go ahead.

我們將從 Evercore ISI 的 David Raso 那裡回答下一個問題。你的線路是開放的。請繼續。

Hi, thank you for the time. Can you just clarify? I think you said EPS for the year $1.44 midpoint. For the year-to-date, are you doing the all-in number, I mean the $1.06 year-to-date or the $1.12 because the implication on the fourth quarter is either $0.32 or $0.38 and either one of the margin seemed down a lot sequentially, but especially if it's $0.32. So can you just clarify that $1.44 -- what are you using for year-to-date EPS? Is it $106...

你好，謝謝你的時間。你能澄清一下嗎？我想你說的是今年每股收益 1.44 美元的中點。對於年初至今，你是在做總計嗎，我的意思是年初至今 1.06 美元或 1.12 美元，因為對第四季度的影響是 0.32 美元或 0.38 美元，其中任何一個利潤率似乎都下降了很多順序，但特別是如果它是 0.32 美元。那麼你能不能澄清一下 1.44 美元——你用什麼來計算年初至今的每股收益？是 106 美元嗎...

Yes. That's the adjusted EPS, Dave. So is the 111 [Phonetic] I believe.

是的。那是調整後的每股收益，戴夫。我相信 111 [語音] 也是如此。

So $0.32 in the fourth quarter with revenue up, I'm just trying to understand, you have like revenues up $243 million, and it looks like you're trying to imply the margins for the fourth quarter, it's something like 8.5%. Or said another way, revenue is up $250-ish sequentially, but earnings down, EBIT almost $200 million [Phonetic]. I'm just trying to think through price/cost from here, is that accurate?

所以第四季度收入增加 0.32 美元，我只是想了解，你的收入增加了 2.43 億美元，看起來你試圖暗示第四季度的利潤率，大概是 8.5%。或者換句話說，收入環比增長 250 美元左右，但收益下降，息稅前利潤接近 2 億美元 [語音]。我只是想從這裡考慮價格/成本，這準確嗎？

No, it's not. Is not, is not [Speech Overlap] margin in the fourth quarter reasonably higher than the margins we had last year in the fourth quarter. So there's something in the math that probably isn't working. But there's -- so we're talking about adjusted EPS. Of course, there's also -- you've seen the tax rate higher this quarter. So I expect the tax rate to affect next quarter as well. We can walk you through the details offline.

不，這不對。不是，第四季度的 [Speech Overlap] 利潤率是否合理地高於我們去年第四季度的利潤率。所以數學中有些東西可能不起作用。但是有——所以我們談論的是調整後的每股收益。當然，還有 - 你已經看到本季度的稅率更高。所以我預計稅率也會影響下個季度。我們可以離線引導您完成詳細信息。

The reason I'm asking is the price/cost, I assume from here, and correct me if I'm wrong. The pricing, I mean, Ag was up over 17%, that maybe pricing on a year-over-year basis is starting to peak, but trying to think through the cost. Do you see as we think about going into the quarters for '23, is there a quarter where you see your cost year-over-year starting to be, let's say, less than they were the year ago quarter? I'm just trying to get a sense of this price cost was pretty constructive, right? It was about 420 bps for the whole company on a margin improvement year-over-year. Do you see that price/cost spread getting stronger over the next couple of quarters regardless of pricing gains slow a little bit versus the third quarter? I'm just trying to get that price/cost assumption as we roll into '23.

我問的原因是價格/成本，我從這裡假設，如果我錯了請糾正我。定價，我的意思是，Ag 上漲了 17% 以上，也許同比定價開始達到頂峰，但要考慮成本。當我們考慮進入 23 年的季度時，您是否看到，是否有一個季度您看到您的成本同比開始低於去年同期？我只是想了解這個價格成本是否具有建設性，對吧？整個公司的利潤率同比提高約 420 個基點。您是否認為未來幾個季度的價格/成本價差會變得更強，而不管定價收益與第三季度相比有所放緩？當我們進入 23 年時，我只是想得到那個價格/成本假設。

I will look also at the cost itself alone, right? We have incredible increase in cost over the last few quarters, right, coming from raw material, coming from transportation, coming from production. And we are still fighting with all of these problems. We try and withold and we managed to get pricing and to get sales at this pricing as well. If we look only at the fourth quarter, we still expect product cost to be higher than what it was last year. And we still expect price to price to continue pricing. We have embedded pricing in there, but it's not a walk in the park.

我也會單獨看成本本身，對嗎？在過去的幾個季度裡，我們的成本出現了令人難以置信的增長，對吧，來自原材料，來自運輸，來自生產。我們仍在與所有這些問題作鬥爭。我們嘗試並拒絕，我們設法獲得定價並以這個定價獲得銷售。如果我們只看第四季度，我們仍然預計產品成本會高於去年。我們仍然希望價格繼續定價。我們在那裡嵌入了定價，但這不是在公園散步。

Yes. But we do expect, obviously, the inflation despite many of the central banks around them, the world trying to bring it under control, it's not yet under control. So -- but we do see logistics costs perhaps coming down a little bit. But I do want to give a shout out to Derek Nielson and what his team is doing is really looking at our cost structure compared to pre-pandemic levels and what it's going to take is we've added a lot of cost to be able to manage through the pandemic, how do we get those costs out. And it's a really good thought process to go almost rebaseline and the work that they're doing, driving lean, driving aggressive oversight to make sure that we're ripping cost out of our own factories and own supply chains, not just waiting on supply chain costs to come down.

是的。但我們確實預計，儘管周圍有許多中央銀行，世界試圖控制通貨膨脹，但通貨膨脹尚未得到控制。所以 - 但我們確實看到物流成本可能會下降一點。但我確實想對 Derek Nielson 大聲疾呼，他的團隊正在做的是與大流行前的水平相比，真正關注我們的成本結構，而我們需要增加很多成本才能通過大流行進行管理，我們如何降低這些成本。這是一個非常好的思考過程，幾乎可以重新設定基準和他們正在做的工作，推動精益，推動積極的監督，以確保我們從我們自己的工廠和供應鏈中削減成本，而不僅僅是等待供應連鎖成本要降下來。

No, I appreciate it. I'm just trying to get a sense of that relationship because what you're implying about the fourth quarter, at least sort of raises an eyebrow about did we just get the biggest price cost benefit already? I'm just trying to make sure we understand that. And then real quick, the order books for Ag, large Ag, when do you expect to expand the order book window. Thank you. That's it from me.

不，我很感激。我只是想了解這種關係，因為你對第四季度的暗示，至少有點讓人懷疑我們是否已經獲得了最大的價格成本效益？我只是想確保我們理解這一點。然後很快，Ag 的訂單簿，大型 Ag，您希望什麼時候擴大訂單窗口。謝謝你。我就是這樣。

Next year.

明年。

[Operator Instructions] We will take our next question from Nicholas Green from Bernstein. Your line is open. Please go ahead.

[操作員說明] 我們將從 Bernstein 的 Nicholas Green 那裡回答下一個問題。你的線路是開放的。請繼續。

Hey, good morning. Thank you. Nick Green from Bernstein. Thanks for taking my questions. Can I return to the net working capital in the flow at Q4, please? You mentioned Oddone that you think it's quite likely it's not a -- it's something you're expecting. It's effectively part of the guidance. Can you talk us through risk factors to you being able to collect that amount of working capital? I'm trying to understand how much of that's within your control? Would you perhaps like to identify any items that may prevent your ability to monetize this inventory in Q4? That's the first one. Thank you.

嗨，早安。謝謝你。來自伯恩斯坦的尼克·格林。感謝您回答我的問題。請問我可以回到第四季度的流量中的淨營運資金嗎？你提到了 Oddone，你認為它很可能不是——這是你所期待的。它實際上是指南的一部分。您能否通過風險因素告訴我們您能夠籌集到那麼多的營運資金？我想了解其中有多少在您的控制範圍內？您是否想找出任何可能妨礙您在第 4 季度通過此庫存獲利的項目？這是第一個。謝謝你。

I'd say the main risk factor is not being able to complete some of the red flag equipment or what we call fleet, that is still in our plans and depends on availability of parts, availability of semiconductor in some cases, availability of labor as well.

我想說主要的風險因素是無法完成一些紅旗設備或我們所說的艦隊，這仍在我們的計劃中並且取決於零件的可用性，在某些情況下半導體的可用性，勞動力的可用性出色地。

But I don't mean generically. I mean, specifically, it sounds like you're comfortable with all of those items because you're comfortable giving the guidance. So are you expecting, I guess, because of your existing order book, maybe you can see the visibility of what you're going to be delivering. Are you fairly comfortable that you will be able to monetize that amount of working capital?

但我的意思不是泛泛而談。我的意思是，具體來說，聽起來你對所有這些項目都很滿意，因為你很樂意提供指導。我想，您是否期望，因為您現有的訂單簿，也許您可以看到您將要交付的產品的可見性。您是否對能夠將那麼多的營運資金貨幣化感到很自在？

It really has nothing at all to do with order books. It has everything with to do with our plants being able to get the parts from suppliers, complete the units and get them shipped within the quarter. And that we've got literally -- if you could see the spreadsheet that we have to manage this process, it would blow your mind. But it's very well because we put it in our guidance, we have that much confidence in our team to be able to execute it, but it's work to do.

它真的與訂單簿毫無關係。它與我們的工廠能夠從供應商處獲得零件、完成設備並在本季度內發貨有關。而且我們從字面上看 - 如果您能看到我們必須管理此流程的電子表格，它會讓您大吃一驚。但這很好，因為我們把它放在我們的指導中，我們對我們的團隊能夠執行它充滿信心，但這是要做的工作。

Okay. I think I'm still not clear how much if we come to when you give us full year results, if you haven't had or not made that amount of inventory incoming, it will be blamed on certain factors that we could have talked about today. So -- but it sounds like you are considering them.

好的。我想我仍然不清楚當你給我們全年業績時我們會達到多少，如果你沒有或沒有收到那麼多的庫存，那將歸咎於我們本可以討論的某些因素今天。所以 - 但聽起來您正在考慮它們。

Let me be clear. What we're talking about is fleet inventory. When we talk about fleet inventory, these are combines, tractors, wheel loaders, everything in our portfolio that we run our factories to continue to meet customer demand, but we can't complete the unit because there's a missing component. Those missing components, we've got a line of sight when we expect those suppliers to come in. And therefore when we complete those and ship those, that's what's embedded in our guidance.

讓我說清楚。我們談論的是車隊庫存。當我們談論車隊庫存時，這些是聯合收割機、拖拉機、輪式裝載機，我們經營工廠以繼續滿足客戶需求的產品組合中的所有產品，但由於缺少組件，我們無法完成該裝置。那些缺失的組件，當我們期望這些供應商進來時，我們就有了視線。因此，當我們完成這些並運送它們時，這就是我們指導中的內容。

Okay. That's very clear. Thank you. And then second question on the construction margin. So in the past this division did suffer operating deleverage each time volumes went down. It's had a number of occasions of negative margin in the past. As you mentioned, you're suffering some of the consequences of the strike at the moment. But looking forward, we would expect probably activity levels to drop as well given construction activities. So can you talk us through what steps you're taking to ensure the cost base of the construction division is correctly sized for a slowdown so that we can hopefully avoid operating deleverage this time around.

好的。這很清楚。謝謝你。然後是關於建築利潤率的第二個問題。因此，在過去，每次銷量下降時，該部門確實會遭受經營去槓桿化。它過去曾多次出現負利潤率。正如你所提到的，你目前正在承受罷工的一些後果。但展望未來，考慮到建築活動，我們預計活動水平可能會下降。那麼，您能否告訴我們您正在採取哪些步驟來確保建築部門的成本基數正確調整以應對經濟放緩，以便我們這次有望避免經營去槓桿化。

Yes. Well, I got -- I said it and I will repeat it. The work that Stefano Pampalone and his team are doing to set a platform for future profitable growth in this business is impressive. It's -- the growth, the growth that they're seeing in the North American market and especially in South America right now is impressive. And they recognize -- we do the modeling, and it's nice to see. They're looking at what happens when this really strong growth model slows down and they're trying to build the system so that we stay positive even in those down markets. Now fortunately we've got a little bit of time, but they're investing in the portfolio. The product lineup is improving. The technology insertion in those is improving. And we're running our plants more efficiently. They're allocating, shifting production where it makes sense. They've done a lot of cleaning up over the last few years, and I think we'll benefit from that going forward.

是的。好吧，我明白了——我說過了，我會重複一遍。 Stefano Pampalone 和他的團隊正在為這項業務的未來盈利增長搭建平台所做的工作令人印象深刻。這是 - 他們現在在北美市場，尤其是南美看到的增長，增長令人印象深刻。他們認識到——我們做了建模，很高興看到。他們正在研究當這種真正強勁的增長模式放緩時會發生什麼，他們正在努力建立這個系統，以便我們即使在那些低迷的市場中也能保持樂觀。現在幸運的是我們有一點時間，但他們正在投資組合。產品陣容不斷完善。這些技術的插入正在改進。我們正在更高效地運營我們的工廠。他們正在合理分配和轉移生產。他們在過去幾年裡做了很多清理工作，我認為我們會從中受益。

So does that suggest that the lower margin this quarter was due to a large extent to the industrial action being taken? Are you able to give us a hint of the margin if the strike haven't been there?

那麼，這是否表明本季度較低的利潤率在很大程度上是由於正在採取的工業行動？如果沒有罷工，你能給我們一點利潤嗎？

Yes. Well, part of what we're doing is looking where it makes sense. So we did make the decision in the quarter to transition some products to other plants and that impacted our ability to deliver. So obviously, it was down a bit because of our decision to transition production during the quarter. But no, no, no, we don't -- obviously, we're not satisfied with the current margins, but we see a very clear path to improvement over the next several quarters.

是的。好吧，我們正在做的部分工作是尋找有意義的地方。因此，我們確實在本季度做出了將某些產品轉移到其他工廠的決定，這影響了我們的交付能力。很明顯，由於我們決定在本季度過渡生產，因此有所下降。但是不，不，不，我們不——顯然，我們對目前的利潤率不滿意，但我們看到了在接下來的幾個季度中有一條非常明確的改善途徑。

Okay. Thank you.

好的。謝謝你。

There are no further questions on the line. Thank you, everyone, for joining today's call. You may now disconnect.

在線沒有其他問題。謝謝大家參加今天的電話會議。您現在可以斷開連接。