CNH Industrial N.V. (CNH) Earnings Call Transcript & Summary

Please welcome Chief Executive Officer, CNH Industrial, Scott Wine.

Well, good morning. I'd actually like to clap for all of you and really thank you for making the trip out to Phoenix to join us for this. But actually I'm going to talk a lot about first. This is our first ever Tech Day, and we're thrilled that you're here to be a part of it. If you came in from Downtown Phoenix, like many of you did, you'll realize how big this city is. I mean one thing about Phoenix, you can go a long ways. So what we've tried to do today is give you the opportunity to see our tech portfolio at its fullest right out here in these fields. It's going to start with a little bit of talk, and I'm going to talk for a very short period of time because that's not the value of today. What the value is, is to see what we're driving from what we told you at Capital Markets Day, and where we're going with our tech stack how that's going to drive and benefit customers. Speaking of customers, I think one of the highlights that you'll hear today. We've got Brady and his father Keen in here, Fahlman to tell you what they've seen using one of our autonomous products and how it works. And that customer-inspired innovation is so important to us, and I think you're going to see that infused throughout the day. We also have the benefit of having our largest and probably most important dealer, Titan Machinery, David Meyer and his whole Board of Directors is here. So if you get a chance to talk to them. A few other people just -- I'll give you the cheat-sheet. If you get a chance to talk to John Preheim, it will be the best time you spend all day. He was really one of the key parts of Raven that came in. Talk to Parag, of course, but really, there's a whole team as you go through these stations that you're going to see really bring to life our technology that we're so excited about. And really, it's the idea of fusing our great iron and great technology. That we talk about breaking new ground, and it's interesting, you realize we're a little bit being agile and adjusting here at 1.7 inches of rain on Sunday, Monday and year-to-date, they've had 4. So put that into perspective of what it means for our equipment. But the team has done a really good job bringing that together. But this corporate purpose we have around the breaking new ground and the words underneath of it are important because we don't say it, but it's customer-inspired innovation is what the first word is. And then we talk about our commitment to sustainability and productivity. And if you've heard it from me once you'll hear it a bunch of times, this whole game for us is around improving productivity and yield for farmers. And I think one of the things you're going to take away from today is how much value we can bring in those 2 areas, productivity and yield for farmers. That's where our investment is going. And no greater example of that was the investment we made almost a year ago exactly when Dan and his team decided to come with us on this journey, and I think there was a lot of questions about Raven. We've had a long-standing relationship with them, but the value unlock that we've seen has been significant. And what's interesting and exciting for me is how much of that value is still yet to come, but the early wins that we're seeing are exciting, and you'll see a lot of that today. It really is infused in almost everything you see the value that we're getting from that acquisition. And the value is important because we are in a difficult world. We've had a darn good year in many respects with financial results. But that's just a really hard work that Derek and his team are driving, but it's brutal out there. I mean think about what we're seeing, we've got tremendous focus on sustainability all over the world. For those of you in from Europe, honestly, I don't think it's possible to be more focused on climate change than the Europeans are. A little bit less so here in the U.S., but tremendous opportunity. And I think you're going to see from us today how we can bring a focus on sustainability and value for our customers at the same time. That value as we think about autonomy and precision, it helps offset some of the concerns we have, all of us about getting the necessary labor. I mean, it's getting a little bit better, but we see inflation all over the place, and we're trying to drive that. We've got solutions that can help people get by with less labor or less skilled labor, and you'll see some of that today. We're working hard to offset inflation. We've got a very aggressive strategic sourcing program we're driving. And unfortunately or fortunately, we're actually pretty darn good at passing on price over cost. And Derek and Oddone will talk about how we're continuing to drive that value for shareholders along the way as well. But at the end of the day, look at that picture on the right, there's so -- we just passed over 8 billion people in the world sometime earlier this year. That's a lot of mouths to feed. There's not much more arable acreage. So our focus on bringing technology to bear to solve those problems is significant, but it's not new. We've been at this for over 180 years. We brought the first Twin Rotor combine. We brought the first quad-track tractor. I mean we know how to bring these innovations to life. And now for the last 25 years, it's been about bringing tech to life as well. So why don't you use today, what you're going to see, I've got a quick video that I'll play for you now to talk about the value that we've built over these 180 years and give you an idea of what's to come. [Presentation]

We are proud of our history, and there have been a lot of first, but the focus that you're going to see today is about what we're bringing to the future. These advanced technologies cover -- and what you'll see, what we've tried to demonstrate is across this farming cycle that the values and the benefits we can bring. Bring it into the farmers so they can see that technology coming to life as they're running their business, making it better and more productive for them. You'll also see today one of the significant investments that we're making in sustainable fuels. I could go on for a long time, so excited about what Derek and the team are driving with our partner, Bennamann, to bring the methane tractor to life. If you think about the -- what we're seeing with fuel prices with energy prices and the idea to drive a negative carbon footprint on a farm, it is really exciting, and it's coming to life very, very quickly and going to be one of the most exciting things you'll see here today. But you're also going to see just tremendous capability and technology. The tech stack is really coming to life and getting born and getting built. The products you'll see, the technology, the benefits, ultimately, what I'd like to -- what the biggest takeaway I want, I mean you can read the words on this slide. Obviously, we got great technology. It's much more market ready. And -- but what I think you're going to see is how much impressive and incredible capability we currently have. Yes, it's about where we're going and what we're doing. But when you see the autonomy, the automation, the way these machines work, the way we bring technology to bear for our customers, that's the exciting part. And if just one of you walks away and says, "Wow, I didn't realize that's what they did, then we win." Thank you for being here. Enjoy the day.

Please welcome Chief Digital Product Officer, Parag Garg.

Good morning, and welcome. I'm Parag Garg, Chief Digital Product Officer at CNH Industrial. And it is great to spend time with you again. We have so much to share with you today. One, we continue to break new ground with customer-focused innovations that are delivering the technology and value our farmers seek. Two, we are fully leveraging the Raven advantage as we accelerate our autonomy programs and enhance our tech stack capabilities and deliver solutions faster. In just over a year, we've already developed and deployed cutting-edge technology to the market that is being scaled across multiple farming operations at an exceptionally fast pace. And three, CNH Industrial is fulfilling our promise to be the best answers to agriculture's biggest challenges as our automation experience, our autonomy technology, enhance our leading brands and elevate farmers' productivity, sustainability and profitability. Let me explain. What I found exciting working at CNH Industrial is how uniquely positioned we are to shape an industry with the growing breadth and depth of choices we offer our customers and to rethink the conventions of how farming gets done. There has never been a time when farmers have had nothing to worry about. Farmers recognize that we are listening and responding to them with automation and autonomy solutions to improve the entire farming cycle. They appreciate how hard we're working to earn the right to be their trusted business partner, and we do this with our boots on the ground approach. In the late 1990s, our brand, Case IH was the first to introduce precision technology into agriculture to provide simple GPS guidance for tractors. This led to an agricultural revolution requiring every practice of farming to be more accurate and controlled. As the team and I have engaged farm operators, we feel the tremendous pride they have in being stewards of their land, making better choices to preserve their farms and be able to carry on their family legacy. Profitability increases when farmers use all their resources more efficiently with less waste of seeds, fertilizers, pesticides and water consumption. Precision farming support sustainability, reducing greenhouse gas emissions and the overall use of fossil fuels. This is truly a case where less is more. Since I started leading digital product technology development over 1.5 years ago, I've seen how our technology impacts farmers processes through incredible precision. And here are some things I've learned along the way. Every farm has its unique challenges. Therefore, we must continue to design and manufacture great iron connected with groundbreaking innovations. This means that everything we produce continues to have unmatched toughness to handle the unpredictable and to adhere to the highest quality of standards. Next, I have learned that the dedication from our employees is unparalleled. Our agile approach to developing technology in the field is important as we see the challenges are farming firsthand. As we work with farmers, the flexibility of our process and our team ensures that we're getting the testing and feedback we need no matter what. And last but not least, I recognize that we're in an enviable position to develop next-generation technology today. When we say we're breaking new ground at CNH Industrial, we mean it. That brings me to today. I'm going to share the progress we're making in 3 key areas: connected platforms, automated solutions and autonomy developments. You'll also hear how our investments and our tech culture will generate a consistent path forward for ag tech development and further position CNH Industrial as an employer of choice, and our customers best answer to agriculture's biggest challenges today and tomorrow. Let me begin by defining a few key terms that make up our suite of precision technology. Connected platforms help seamlessly connect farmers to their machines, fields, teams and partners, so they're able to manage their operations and collect their data from anywhere on any device. Automation, it's when the operator is in charge of the machine but can transfer limited control of a specific function. You're going to hear a lot and see a lot of automation work today in our equipment portfolio throughout the day when you're in the fields. Then there's autonomy where the machine accomplishes all of its tasks with our direct operator interaction. So with that understanding, let's begin with connected platforms. For today's farmers having a digital experience is essential. The connected platform is at the center of how things work and is the heartbeat of the system. As automated and autonomous solutions expanded through a suite of digital tools, we are focused on optimizing equipment productivity and job quality to ultimately improve profitability. We are providing a seamless intuitive comprehensive connected platform, allowing customers to collect, store, visualize and analyze their farm operation data. Our customers want to leverage data. They didn't sign up for a PhD in data analytics. The goal is to ensure that data and software helps them make informed decisions that they can trust and execute. We are continuing to pursue an open digital ecosystem strategy. And we believe in facilitating data flow from our platforms to all leading ag digital platforms, so farmers are able to control who they share their data with. At Capital Markets Day, we shared that we're building a robust and flexible tech stack with ubiquitous farm management capabilities, and we've been taking this even further. Our connected platforms are setting the foundation for our customers' day-to-day operations with automated technology. This involves moving from batch data to real-time data. When you're in the field every minute counts. So it's important to be able to use valuable inputs on tight time lines and even real time. We will continue to make advancements in all of our connected platforms. Most notably, we're giving richer analytics to our customers as they make data-driven decisions to react to future challenges. Next, let's turn our attention to automation. Where the machine operator has full control while being able to engage for specific automated functions. The key message here is currently we are delivering immense customer value across the segment, and we're poised to deliver a lot more value to the marketplace in 2023 and beyond. We are taking advantage of Raven's cutting-edge guidance technology and integrating it with CNH Industrial's existing modular architecture. We're doing this with the goal of taking the flexible and robust tech stack and making it essentially tech-agnostic. Let's dig a little deeper by examining the benefits of our automation technology brings to the full farming cycle. And let's start with tillage. Depth and quality of dirt are critical. With changing conditions throughout the field, it is just too much work to manually reset the Till for each zone. Typically, farmers step their machinery and apply those settings across the entire area. This is problematic because calibration issues are more likely to occur, leading to underperformance. Our tillage automation technology allows the operator to set tillage depth to an accuracy of 1/10 of an inch as our sensor monitors and maintains the depth throughout the entire job leading to the best seed bed while maintaining an average feet of 10 miles an hour. Research has shown that farmers can save 17% on fuel and yield nearly 3 more bushels of soy per acre as a result of automatic adjustments. In total, our tillage prescriptions enable farmers to earn over $36 more per acre. In addition to this, we are in customer testing stages for semiautonomous tillage solutions. Why? Because these are the applications that farmers are most likely to want to automate. Next, on to planting. During the planting season, farmers generally have a 10-day window to get seeds into the ground. And if they miss it, they lose profit. Therefore, they need a reliable solution. Each role on our planter robotically changes the seed rate to put seed in the ground exactly where it needs to be. Our patented speed adjusted vacuum fan, an auxiliary alternator provide the optimal vacuum and power to the planter automatically without operator intervention. This has led to a 17% feed savings for our customers and has increased productivity, giving the operators the ability to drive twice the average speed compared to traditional planting technologies with improved seed depth spacing and seed to soil contact, ensuring early and uniform crop emergence. This leads to yield increases of up to 26%. This is another example of pairing great technology with great iron. Next, we have application, which means sprain crop protection products. This is another example where CNH Industrial has proven to be the best answer to agriculture's biggest challenges. A typical farm can have an upwards of 100 million plants, and Raven's vision guidance system helps operators take care of every one of them, steering the equipment with sub-inch accuracy precisely down the rows. Our automated spares have more than 125 individual microprocessors, controlling up to 109 precision nozzles on 135-foot boom. These microprocessors maintain coverage and prevent crop damage from over and under application at speeds of over 20 miles an hour, which is faster than any comparable solution. This has enabled our customers to experience 15% less idle time, 10% product savings and the ability to cover 20% more acres per day. While lowering machine hours, farmers are also reporting increased confidence and satisfaction and less stress to the operators. You'll see this in action in our demo stations later this afternoon. This brings us to the all-important harvest. Maximizing grain harvest is one of the most critical operations within the farming cycle. Both quality and quantity of grain are crucial in generating revenue for farmers. In Brazil, we had a customer that didn't see the value of our harvest automation system until they turned it on. It saved them $30,000 per year for each machine, reducing fuel costs and allowing them to cover more hectares per hour. Our harvest automation reduces the number of functions that an operator needs to manage from 12 down to 3, generating productivity benefits for both semi-skilled and fully skilled operators. And our technology measures everything from ground speed crop harvest conditions to the quality and quantity of the grain they harvested. The automation system uses sensors, including a multispectral camera with advanced artificial intelligence to optimize performance. Every 20 seconds, our neural network selects the best action out of 280 million possibilities to maximize a farmer's harvest. Overall, the use of harvest automation has generated 33% less grain loss and 25% increased throughput, all as a result of automated technology designed to drive productivity, sustainability and profitability for our farmers. This is another area where we are in customer testing stages for driver-assisted harvest solutions because they could generate greater and consistent success for our farmers. Now let's take a look at cultivation of hay and forage for animal feed, bedding and energy production, which is essential to our energy and food supplies. Operators need to minimize the need for manual intervention to monitor changes in field conditions. Our award-winning technology takes the guesswork out of the process and provides automatic steering and weight controls. The LiDAR system, you will see in action today emits a laser pulse. The pulse has been reflected of the surface of the field and row and the processor then calculates the position and shape of the role and then controls the position and speed of the tractor. The sensors inside the baler chamber measured the crop flow to fine-tune and -- the steering and speed to even further maximize the inside of the baler to achieve high-quality performance. Results have shown a 15% increase in productivity and a 7% reduction in fuel consumption with bailing automation. Again, delivering solutions to farming's biggest challenges. Finally, let's look at orchard vineyard. When working with permanent crops like vineyards and orchards, farmers must not only take care of the individual fruits, but leave the plants unharmed and healthy to produce again and again. Our systems automatically adjust to the varying plant height and ground level and picking speed needed to ensure quality yield and a repeatable crop. Our automatic system scans the harvesting job ahead 33 times per second. It monitors the plants and terrain a full 10 meters ahead of the machine and self steers automatically along the crop canopy, even at high picking speeds. The system is also equipped with infrared technology to work in the -- even in the darkest of nights since the characteristics of the fruit, specifically the sugar content are often at peak overnight. Customers have experienced tremendous sustainability improvements with 10% savings in herbicide and 35% savings of fuel per acre and a 35% reduction in CO2. As farmers continue to reduce their cost and waste and increase yields, they'll see a significant difference in their productivity, sustainability and profitability while recognizing CNH technology has proven to be the best answer to agriculture's biggest challenges. Our last segment is autonomy, which means the machine is able to accomplish all of its tasks without any operator interaction. The automation we're delivering for customers that I just spoke about are the key contributors to the journey to autonomy, and we have plenty going on in the autonomy space. Our investment in Raven gives us a solid jump start and a clear advantage as we are rapidly accelerating integration. We introduced the Case IH Trident 5550 applicator with Raven autonomy earlier this year. It's the industry's first driverless applicator, which is the #1 fertilizer applicator farmers have requested. Later today, you'll hear from our customer, Brady Fahlman from Fahlman Acres, who is one of the early adopters of the product this year. Also, we have Raven's autonomous grain card solution. It allows a combined operator to directly -- the ability to driverlessly call a green card tractor directly to the harvester to offload without a second operator, 2 machines, 1 driver, twice the productivity. There's been an incredible amount of progress this year on autonomy, and I'm excited to spend time within the field to show you exactly what we've been up to. The Raven advantage is playing a major role in accelerating our autonomy program and enhancing our tech stack capabilities and we will continue to scale Raven's capabilities across multiple farming operations. So up until now, I've talked a lot about our technology, and it's great technology, but it means nothing without our talented teams and our tech culture. And I believe it's important to share how our tech-centric culture plays a vital role in our ability to continue to drive results. Precision technology is a top priority and our culture is prepared for the journey. We've embraced this mission model, and we're unified in a customer-centered purpose building technology that breaks new ground for customers. Our bedrock belief is if you start with the customer, understand their problems and make decisions in their best interest, you'll end up in a great place. Throughout the day, you'll meet incredibly talented and passionate people delivering these exceptional technologies. You will see firsthand how our people and our culture have their fingerprints all over the technology we bring to farmers, and how it generates a positive customer experience for folks. With a larger team, we're innovating faster. Over the first 3 quarters, we have added 50% more global employees to our Raven precision technology-focused team. And we're going where the talent is. We will continue to build our pipelines as we increase our investment in our R&D centers and open brand new ones through our robust internship programs, STEM outreach and recruitment campaigns. As a leader in precision, it makes me really happy to see how well the Raven integration has proceeded. It's the people and culture that has made it impossible to know our CNH Industrial ends and the Raven team starts. Our one team philosophy is focused on serving customers. In closing, a few weeks ago, our Chair, Lady Suzanne Heywood, spoke at the Turin Polytechnic University, one of Europe's leading universities for engineering. She said, when used wisely, technology can enhance our humanity. It is no secret connected platforms, automation and autonomy will improve the lives and work of our farmers around the world. And CNH Industrial through our people and culture will continue to partner with farmers on every continent as they serve growing populations. We will continue to lead in shaping the industry and rethinking the conventions of how farming gets done. And CNH Industrial will continue to prove to be the best answer to agriculture's biggest challenges. Now let's hear from some of our engineering leaders in our first panel. They'll explain how we're integrating and implementing this tech culture across our organization and give you a deeper dive into our technology. I look forward to spending time with you the rest of the day. Thank you.

Well, good morning, everyone. It's pleasure to be here, and they really know how to throw a party here in rural Arizona. My name is Cherilyn Jolly-Nagel. I'm a farmer from Saskatchewan, Canada, where it is minus 30 degrees Celsius at home when I left the farm. For those of you doing Fahrenheit math, that is like I carry the one, minus a million degrees Fahrenheit, it is really, really cold at home, but productivity had dropped down the farm just enough that I could get away. So I'm thrilled to be here. I farm with my husband, we are both fourth generation farmers and our families are farming the some of the same lands for more than 120 years. We grow chickpeas and lentils, and we grow dorm, which makes pasta and we grow canola, which is a heart healthy oil. We have 2 children. We're raising 2 tractor driving, gunslinging, dirt bike riding, teenage daughters, and everybody in the Nagel family is having a great time farming, and we're all really excited about the future of agriculture. So it's my absolute pleasure to be here to help celebrate Tech Days and selfishly to help celebrate the innovation that is so important to farmers like me. So with that, please join me in welcoming our panelists for the precision tech panel. We have John Preheim, Vice President of Raven Product Development; Dan Eslinger, Vice President of Precision and Vehicle Electronics and Mukesh Agarwal, Vice President of Precision Software and Cloud Applications. Gentlemen, have a seat. This is the famous John that Scott was referencing this morning. So I get the first chance to visit with them, no pressure, John. So I thought we would start this morning by giving the audience an opportunity to get to know you a little bit. CNH Industrial has a tech culture and that has to start with a tech-focused leadership. So would each of you share your personal technological background and how that's relevant to your role in CNH? Mukesh, we'll start with you.

Okay. Well, thank you, Cherilyn. Good morning. I'm Mukesh Agarwal. Look, at my core, I'm a software engineer. I absolutely love designing, developing, delivering purposeful software. Now if that makes me a geek, I proudly respond to that. I have about 30-plus years of experience at Microsoft, UnitedHealth Group and 3M. And the thing that really, really resonated with me is really the charter that CNH has. And CNH is charter of feeding and building the world really relates to me. But more than even what I personally believe, there's also a great opportunity in agriculture right now. The ag segment has mounds and mounds of data out there, and we're just beginning to scrape the surface of that. And that's the opportunity I see of bringing that data to life and making sure that our ag segment can drive the maximum productivity for their operations.

Great. Dan.

Yes, sure. Thanks. Dan Eslinger, so I grew up not too far away from you, Cherilyn, in Southern Alberta. Grew up around ag from my childhood. As I got out of engineering, I spent 8 years at Deere. So I ended up leading their StarFire and GNSS receiver development before I left, starting as a software engineer there. Took 10-year break from Precision Ag and worked in aerospace, worked in multimedia, public safety and came back in and I'm really excited at this point. So I spent my time at Deere watching the Precision market adoption mature and the technology mature and the robustness. In this 10-year of intervening period, it's really come through that farmers now count on that technology. So it's really come in a integral part of the operation. So I really do think that we're at an inflection point where we're poised to adopt even more operational efficiencies, more autonomy and more automation in particular as we drive more value for our customers in the field.

John?

I have a slightly different background than Dan or Mukesh. I grew up on a small family farm in Eastern South Dakota. We raised livestock, cows and hog primarily, and we farmed crops, primarily corn and soybeans. And I was driving tractor before kindergarten and I loved every minute of it, all the way up through high school as very actively participating, but I also had a very strong love of science and technology. I had a couple of brothers who really wanted to farm, so I decided to go for engineering. And there was no Precision farm -- Precision technology on our farm when we were growing up, kind of in its infancy stages yet. So I want colleges to get an engineering degree and when it came time to start looking at what I was going to do for a career post college, I realized that 30 miles from where I grew up, there was a little company called Raven Industries that focused at least one division primarily on Precision technology for agriculture. So I ended up taking a job there, and I've been there ever since. It's been awesome. It's so easy to find purpose in helping feed the world. It's been awesome being able to continue the -- staying close and connected to ag, watching my family, my wife's family use the technology we produce to help make them more efficient and profitable. It's been really amazing to see the journey from where we started when I got into Precision technology, guidance in steering was a very advanced concept at the time. Now what we're going to see this afternoon with autonomy running out there. So it's just been a fabulous journey.

I too remember the manual days, John. Mukesh, you mentioned mounds of data? How are farmers using this data today? And how is CNH Industrial working to make that a better experience?

Well, thank you. look, farmers use -- farmers that use Precision technologies, they use the data to track their machinery to drive operational efficiencies, but I want to kind of go back a little bit to what Parag said earlier, right? Parag said it best, farmers didn't sign up to become data experts. They didn't sign up to get a PhD in data analytics. So what are farmers trying to do? Farmers want to save cost. They want to save time. They want to increase the yield, they want to increase efficiencies. So that's where we come in. What we want to do is we want to take that mounds and mounds of data and convert it into actionable intelligence for them. What we want to also do is provide them with a connected platform. And as you heard, connected platform is nothing but a suite of tools that allows farmers to connect with their crops, with their field, with their equipment. What we are trying to also do is make sure that decision intelligence is at their fingertips. And then we want to do all of this by providing them an easy-to-use interface. So they don't have to muddle through complex interfaces. And then, of course, we want to make sure that farmers are able to do all of this from any place, any time from any device. That's what excites us.

So Dan, there's certainly a spectrum when it comes to farmers. Some of us are early adopters. Some of us are on the other end, where it takes a little more time to justify the value of it. So how would you communicate the in-cab technology to someone who is unfamiliar with precision agriculture?

Yes. So we find that we have to do that just as we interact and tell our families what we do outside of -- not a lot of people involved in agriculture, not nearly as much as it used to be, but the quick answer to it is that with a short period of time, limited training, you can take somebody off the street almost and put them in a cab and get them to where they're an adequate operator. When you start talking about our automation capabilities that really -- I'd like to refer to them as our superpowers because that really takes somebody who's a rather adequate operator and it makes them an adept operator, meaning we can get the same quality as a very experienced operator out of somebody when they've used our automation capabilities. So I can use a personal example of harvesting millet in Eastern Colorado last harvest. I was out there with one of my colleagues, the farm we were on, the farmer we were visiting. He had an emergency, he had to go into town. And so we took over his harvest operation for that day. And with my colleague, he had a very clean grain bin, and he was very adept at operating machine, and that was part of his skill set. And when I looked at my grain bin, it was not nearly as clean of grain. So there's going to have to be more reprocessing, which is not a great outcome for our customer there for the farmer. But toggle the switch, engage automation and all of a sudden, migraine looks just as good as a very adept operator. So that was really awesome to see and a great outcome for the customer.

Well, Dan, I'm not going to tell my father in law that there's an opportunity that technology will make me a better operator, it won't go well for me at Christmas. John, can you share with us from your perspective how the integration of Raven with CNH Industrial will drive value?

Yes. So Scott mentioned earlier this morning, but we have a long history of partnership. It's a decade-long journey we've been on in it. The partnership was great. We're united with a common purpose. We're helping to improve farming, improve profitability, improve sustainability. We have that common purpose to start with. But now what we get to do when we're bringing the organizations together is really leverage our complementary strengths. Historically, Raven's done very rapid innovations. We introduced new technology in aftermarket, lets us stay with our innovations. You get immediate feedback from customers. We're going to hear from Brady this afternoon or later this morning about that. And then you have CNH with a strong strength in hardening the technology, getting it deployed extremely broad global reach, a huge customer base, a lot of different platforms. And we get to bring those 2 together, and that's why the 3 of us work so well together. What we get to do is really increase the cadence that we can deliver value to the customers.

Mukesh, you had already talked about the connected platform. How is that going to enhance data visualization for farmers?

Yes. Great question. Look, at the end of the day, visualization is the name of the game, right? And really, the center of the universe for the farmers is the connected platform. And what we do is we empower farmers to be able to visualize all their farming operations, things like how do I set up? How do I plan? How do I monitor? How do I analyze? That's what we do. Let me just give you an example. We had a customer who called us and said, "Hey, you know what, you can show me during harvest season, how my combines are operating, right? So great, I can optimize my combines. But can you also talk to me a little about my operator efficiency? And we were able to use the data that we have and provide them that visualization. That drove tremendous value for the customer. So those are the sort of visualizations that really enhance the experience. You all are going to be watching a bunch of demos today. I really encourage you to look at our telligent planting demos where you're going to see how we take this concept of a prescription, and how do we put that onto the machines. Those prescriptions can be easily generated by our systems or other systems. And we can put that there. When you go into the harvest demo, you're going to see that how the setup plan and monitor allowed you to really see the yield from your harvest. So those are the sorts of things that you're going to see as visualizations.

Yes. Looking forward to the demos. Dan, I would say each piece of our equipment today now contains tens of thousands of dollars worth of precision technology. Can you walk us through an example of all the technological components that would reflect that high-cost value?

Yes, happily. And you're going to see some of those this afternoon in our planting station as well. So I'll use the tractor and planter combination that you'll be seeing later today as an example. So with that, the customer value, the farmer values, they can go and plant twice as fast, so they can get through the field twice as fast, saving 17% input cost of seeds. And that also eliminates skips and doubles. For those of you not familiar with the skips and doubles, skips where you miss planting a seed in a piece of earth or double is where you plant 2 seeds. Either way, it's a very poor costly economic outcome if you have either skips or doubles. But in order to accomplish that twice as fast and saving 17% seed, we need 60 computers. So 28 of those live on the tractor. 32 of those live on the planter. 4 of those are precision controllers. And those have a technical stack of Android, Linux, Real-time Operating Systems, Assembly, C++, Java, 3D Graphics Engines. So we really have a complex technical staff, but if you're adept at using a mobile phone today, whether that be Android or iOS, you can get into the cabin via -- that's all hidden from you, and you can be an adequate operator. So lots of complexity made simple.

Well, John, as operators, we come across so many different obstacles in the field. Some of them are permanent like power poles or trees, some of them were temporary, maybe vehicles or animals. Can you share with us how CNH Industrial is going to use artificial intelligence to drive automation and autonomy.

Yes, of course, and as you and I probably know, even good operators sometimes miss those things and my dad discovered, if you start too young, you missed them a lot. Really, automation autonomy, all of it revolves around sensing and acting. Everything you're going to see today is based off that. We've been doing this for years. It's not new. Some of the stuff around perception, for example. Hopefully, we're able to run it the best-in-the-industry vision guidance system that we have going, the LiDAR following for wind rolling. All of those require a lot of data, a lot of processing, but those aren't even using AI yet. We are using AI and some other products that we're going to get to see today. Harvest automation as an example. There's, I think, 280 million different configurations, and they leverage AI to analyze the quality of the grain and make decisions on how to optimize the combine. So there's an example of artificial intelligence being used. But directly to your autonomy question, there's a few autonomy platforms running out there this afternoon that are also going to be leveraging artificial intelligence. And that's really around safety. So as you increase the number of sensors, as you increase the number of decisions they have to get made, the complexity becomes really, really significant and artificial intelligence is getting leveraged today in the field to solve those problems already.

Yes. I'm glad you brought up the safety aspect of that because that's a real challenge for us. Mukesh, why does CNH -- we talked about the connected platform is the center of the universe. Why does CNH use the connected platform as the major pillar for its precision offering?

Yes. No, I love that question, by the way. It's -- look, you heard John and Dan talk about the tech stack, about automation, about autonomy. These are some key investments that we are making. Let me just enhance that with some data. We have, in the month of October, 25 billion with a big B pieces of data that we took from our machines, and we processed it, we analyzed it, we stored it, we made sense of it. That's the scale of work we're doing. We have 63 terabytes of data from the last 3 years that has just telematics information. I was just -- before this, I was checking with my team, there was 3.9 million calls that we made to our integration platforms, that's the sort of stuff that we are investing in. That's what gets me excited. But let's say, I put all of this aside, the investments that we are making today are focused on the customer. We are a customer-first company. We are focusing on customer needs of decision-making. How do I allow -- how do I help my customers make proactive and dynamic decisions on collaboration, how can they maximize their connectivity with their partners and with their advisers. And last but not the least, maximizing the short seasons, 10-day planting season, how do I maximize their uptime so that way I know when the equipment -- where the equipment is, how is it working? And how are we connecting with -- how can the farmer connect with the machines and how can machines connect with each other. Those are the sort of investments that we are making.

Well, Dan, let's talk about the embedded technology then. How is the embedded technology evolving?

Yes. So we're making sure that we have development capability in-house. That allows us to go at a faster pace with higher quality and truly lets us own the customer experience. So we're not a technology for technology's sake company. We go and take those -- that technology and solve the true customer problems with it. And so it's the application of technology that's really exciting for us. So with our modular architecture, John and Mukesh and they are all marching forward to make sure that our aftermarket capabilities are strong as our factory fit and those march together across our portfolio. And so that's the evolution at this point.

John, we'll throw the last question to you. There's certainly no shortage of places for the company to spend their time and energy and resources. So how will CNH Industrial prioritize those pieces of the autonomous puzzle.

Yes. So today, we're going to see 3 autonomous applications out in the field. The first one is the autonomous grain cart. Some of you have probably seen already. The autonomous spreader that got unveiled this year at Farm Progress Show. And then the first peak for anybody, we're unveiling our autonomous tillage platform, assuming it stays sunny and windy, that's not often in winter. I'm hoping it stays sunny and windy, so I can get into the field to do field work that I am today. How we prioritize those. We really focus on what customers are most willing to adopt first and minimum impact to the workflow. As we look at autonomy, we know there's going to be changes to workflows for the customers. Again, I suspect that Brady is going to talk about this today. It's a lot of stuff that we've worked with him on how we can minimize workflow impacts as autonomy becomes prevalent for prioritizing based off that and what the farmer is most comfortable with and our close ties to farmers enable us to make those decisions.

Very good. Well, that is all the time that we have gentlemen join me in thanking our panelists. Thank you for your time. Up next, we welcome Scott Harris, Case IH Brand President to welcome to the stage another Saskatchewan farmer.

Good morning. I'm Scott Harris, Brand President, Case IH & STEYR. And now we're going to change it up a bit. Instead of hearing from us at CNH and has been foreshadowed by Scott and others, we have a unique opportunity to hear directly from a grower who's been using some of our advanced technologies. His insights are really meaningful and will help develop a really clear understanding of exactly how impactful these emerging technologies are, but maybe more importantly, how growers' current operations are impacted and may be modified to really capture the entirety of the value proposition that these new technologies represent. So all the way from Holdfast, Saskatchewan, Canada, Case IH and Raven customer, Brady Fahlman, Brady? There he is. Hi, Brady, have a seat.

Thanks.

Brady is a longtime fifth-generation farmer. Case IH and Raven customers, as I said, and he farms his original family homestead in Holdfast. He and his team are really progressive operators, early adopters of technology, particularly as it relates to addressing some of the labor challenges that are so pervasive in our industry today. So Brady, so happy to have you join us. Thanks for being here.

Yes. Thank you. I also think it's very cold in Saskatchewan. So it's an absolute pleasure to be in Phoenix for 5 days. But yes, like Scott said, I'm the fifth generation of my family farm up at Holdfast. I grew up in Holdfast. Talent of 100 people, had a fairly typical small town upbringing, my mom is a teacher. She taught me kindergarten grade 1 and grade 2. Dad's a farmer. And I pretty much spent my younger years having free rein on the skating rink and riding around with dad in pieces of equipment. So after high school, I attended Lethbridge College for 2 years, and then I came back to farm full time in 2009. So that was kind of the start of our growth period, I guess, for our farm. We picked up 10 quarters of rent of land that year. And then in 2019, we had the opportunity to purchased 13 quarters from a neighboring farm, which was our cousin. And inside that 13 quarters was one of our original family homesteads. So right now, we farm all 3 of our original farm and homesteads. And then this summer, we had the -- we had the opportunity, sorry, to pick up another 22 quarters going into spring of 2023. So that puts us at our current size of about 13,000 acres. And then alongside dad and I, we have 3 full-time guys, Nolan, Kelly and Jason. My girlfriend is part of the team. She does all of our grain marketing and my younger brother Landen, my brother-in-law, Kyle, my uncle, Tim, come and help us out during the busy times.

What a great legacy, Brady. Tell us and share with us a little bit about how you're using automation and precision technologies today and how they impact your operations?

Yes. So using precision technologies are really any of the latest tech products is not something that's new to us. It's something that I learned from my dad by watching him through his farming career and he kind of instilled that in us. So across our fleet, Patriot sprayers, AIM Command FLEX, Viper4 monitors and field hubs to get the data out of the sprayers and into our office. We have two 580 Quadtracs that just hit our dealership actually up in Davidson. So we're looking forward to getting those into our operation. And then 50 series combines with Harvest Command. And the Harvest Command is something that had a real immediate impact on our farm. As I kind of said before, my brother in law likes to come out and help us for harvest and he doesn't come from a farming background at all. So he's a very inexperienced operator, we'll say. But having that Harvest Command there, we had the confidence to know that throughout the day, the combine was going to adjust the quality of the grain is going to stay right where we wanted it. And it made it easier for Kyle, too because it was one less thing for him to worry about. All he really had to do is worry about driving it and trying not to hit anything. So it got him comfortable very quick, and then we could teach them more after that. And then we use AFS Connect to bring it all together. It doesn't matter how much data all of our pieces of equipment produce in the field. If we have nowhere to put it, so we can look at it, analyze it and use it to drive our management decisions. It all doesn't really matter. So we use AFS Connect. And then for us, the next natural step is autonomy.

Awesome. Well, let's dig a little deeper into autonomy. And what does it look like for you today? And maybe more importantly, tell us a little bit about the process of implementing it on your farm.

For sure. So autonomy is something we've sat around, talked about, discussed how it would work in our operation and something we've been very, very excited about and have been waiting for to get it out. So when we had the opportunity this year to demo the Trident with the Raven autonomy, we were very excited. So for us, a lot of the conversation around autonomy is focused on labor, and it's true. Seasonal labor for us is hard to find. And when you throw in tight weather windows and tight application windows, it's even harder to have that labor ready when we actually need it. So autonomy is -- to us is just a necessary next step to improve the efficiencies of our farms. So if we can get guys out of the cabs and we can use our labor that we have already more efficiently by supporting this equipment and just feeding the equipment, sprayers with chemical and water getting the grain off of the fields fast enough to make sure our combines run efficiently. That's really what we're looking for and where we see autonomy fit in our firm.

Yes. Excellent. So there are implications to the support operations to implement autonomy effectively.

Yes, absolutely. One of the bigger -- as the equipment has gotten so good and gotten so big, we are more focused on logistics and support of that equipment. So when you take a guy and tie him up in a cab for 12 hours, we're just not using the labor that we have efficiently. So that's one reason -- a big reason of why we want it on our on farm.

Really clear. So in our last couple of minutes here, what is your outlook on the future of automation and autonomy on the farm.

So I've been asked this question a few times about the future of autonomy. And to me, I was able to sit this fall in the driver seat of my half ton and click play on the GCS. And I watch that Trident go up with nobody in the cab and drive up and down the field, and it was the best moment that I've had in my short farming career to see something that we've talked about and actually get it onto our farms. So to me, the future is now, I don't want to look at stuff anymore. I want it now. And what you guys are going to see out there, dad and I, had the opportunity to go out there yesterday and look at all the different stations out there and Harvest assist and we're seeing sprayers that are doing precision spot sprain and over the tillage and we're talking with all those guys and everybody out there about the different ways we can implement this in our farm and different uses. And it's just incredibly exciting, but what I can say is everybody is excited. My dad who's farmed for ever to our youngest guy Nolan, who is 29 years old, we're all excited about the future, and we're ready to go, though. We're ready to get this autonomy. We're ready to get the tech, we want it on our farms. Everything out there, we can see the benefits and how it's going to help us, and we just want it really as fast as we can get it and as much as you guys will give us.

Yes. Very good. Outstanding. Thank you, Brady. Tell us just briefly, how would your -- and maybe your dad might be better to answer this question, but how would your operation look differently today, if you did -- without the technology? How did it look before and compared to what you've got today?

Yes. So for me, that is a tough question to answer because I've actually never run a piece of equipment without auto steer in my life. But dad and I talk quite a bit about it, about he was saying this morning, about dragging a tire in the field on his first sprayer and that's how they lined it up or using the full markers, and they turn around at the end of the field and it would be blown away. So we talk a lot about where we've come from and how much more manual labor there was, how much more work there was, how much more tax than it was on them. And we've got it pretty easy right now with the line of equipment, I guess. But it's just -- we wouldn't be capable of doing the amount of acres and the efficiency of what we're doing right now. But to take the next step and not even for growth, but even to do a better job of what we're doing right now. Autonomy and all this tech is -- to us, it's necessary for us to be better. And like I said, everything out there brings value and it just gets me very excited.

Yes. Right on. Thank you, Brady. Speaking of automation, our next panel of speakers is going to dive deeper into automation, talking about building smarter iron. So stick with us, and you'll find out how we're applying precision to all stages of the crop cycle. Thank you, Brady.

Well, thank you to Brady for a great introduction to this next panel. It is technological advancements that are inspiring CNH Industrial's proven iron platform. In the early days, the driver, farmers would have to manually be responsible for the setting of each piece of equipment. I know my grandpa, my dad and even me, I'm clearly older than Brady because I do remember the time having to manually set all of those adjustments, get in and out of the cab to detect and determine the problem and manually make all of those adjustments. So today, we are going to welcome our panelists and we're going to talk about the operation efficiencies that have been gained through this type of technology and how important it is to us, join us on stage gentlemen. We have Darin Krantz, Head of Precision Technology and Business; Monte Weller, Product Line Director, Global crop production and Hay & Forage, Case IH; and Lars Sorensen, Global Product Manager for Combines & Headers, New Holland Agriculture. So thanks, everyone, for being here. Lars is our combined expert. So we'll start with you. And we're going to talk a lot today about the future of technology and equipment, but CNH Industrial has a history in the harvesting space that is worth noting. Do you want to comment on that?

Yes, sure. I mean CNH Industrial has pioneered many game-changing technologies through time. We were the first to introduce Twin Rotor technology, and we did that as early as 1974. We were also the first to introduce Single Rotor technology already in 1977, and we have been leading both segments ever since. And today, I'm proud to say that our combined portfolio offers farmers more choices than any other OM can do out there from very, very record -- big capacity record vacant combines to small conventional TCs.

So that's a bit about the combined history. Darin, could you share with us how CNH has participated in the tractor segment and how that has evolved with the integration of technology?

Yes. Similar to Combines, Lars, CNH has a long history of tractor leadership, dating back over 150 years to the days of steam-powered tractors. And in addition...

I don't remember those days.

In addition, CNH has a long history of precision technology leadership dating back over 25 years ago to when the first precision technology division was formed. And I think it's important to understand, I think, historically, people have thought of those things as two totally separate items, tractors and precision technology. And today, when our equipment leaves our factory, we ship fully integrated solutions. And what I mean by that is, for example, you see this Case IH Quadtrac tractor behind me here, when we shift that tractor from our factories, it leaves with a fully integrated display capable of not only machine functions, but precision technology functions, a GPS receiver capable of 7-inch repeatable accuracy, a telematic system for full connectivity and a tractor automation system that optimizes the engine and transmission for maximum efficiency and fuel savings. So in summary, the lines of technology and equipment are blurring.

It truly is unbelievable when you take a look at the picture that you were referencing and think about sub-inch accuracy to really think about that when you're going through the demo days. Monte from a corruption standpoint, applications of fertilizer, herbicides and pesticides, those are some of the most important ways that farmers likely can improve our yields. How is CNH precision technology integrated with Raven to make those processes more efficient?

Thanks, Cherilyn. Our newest sprayers have integrated with Raven Technology to make spraying and spreading easier. What you're going to see today out in the demo is how this technology of the Raven Technologies integrated onto our sprayer platforms. But it really starts with the most precise nozzle control systems in the industry. And our customers that have utilized this advanced frame technology has told us that they have seen up to 10% products savings in their operations. And what that means today is really is that, that savings with record high input cost to date is dollars back to their bottom line. And our innovative camera-based that have vision guidance and automated in the row turning technology that we have embedded on to our sprayers to date, not only reduces crop damage as the sprayer travels down through the field, but also probably more important is reduces the driver fatigueness after hours and hours of spending, you heard Brady that spend many hours in a cab, this really reduces the drivers of fatigue. And finally, we've also heard that sprayers accumulate a machine and agronomic data via our real-time connected portal. But then we also know that when you ask, and we're seeing customers demand for having multiple vehicles in the same field running at the same time, this technology suite, not only now is bringing much more productivity gains of having two or more machines running in the field and up to 20% gain in productivity and 15% less time you've heard idle time. That means more acres per hour, more acres per day, more acres per season, productivity.

I'm -- Monte, I'm really glad that you brought up the driver and operator fatigue, Labor shortage is a real issue on our farms today. And so the operators of those high-speed machines are going for hours and hours on end. And it can be a real marathon as we come up against weather conditions. So those efficiencies really cannot be underestimated from my perspective. Lars, let's go back to the harvesting capabilities. How is CNH leveraging technology to further augment the harvesting capabilities, specifically when it comes to Combines?

Sure. Sure. I mean, again here, CNH was first with the first intuitive and proactive harvest automation system. And in the other panels, the other speakers have been talking a lot about technical background on harvest automation. I'm going to try and give a little bit of a customer perspective here. When you set up a Combine, there is 280 million ways of doing it. And as crops, terrain, weather varies through the day, ideally, you should be changing your settings all the time, no one does that. It's too stressful, no one can keep up with it. So what we have done with Harvest Automation, we've taken all that away from the operator. So now the Combines are being fed data about what goes on inside the machine and it's making adjustments every 20 seconds. That optimizes productivity, of course, efficiency, fuel use per tonne, losses out back to Combine, the quality of the product, everything related to harvest. And this makes even an experienced operator, less stressful. It's less stressful to run a Combine that's automated than it was before. But the big advantage is really you can put anyone into a Combine today, and they could be as productive within 10 to 20 minutes of instruction as an experienced operator. That's a big breakthrough. Another area we're pushing forward in is data collection. We have introduced Near-Infrared Sensor technology in our Combines now. So we are actually measuring the quality of the crop, not only the quantity, and that gives us the ability to -- with this data to write very accurate prescription maps for the fertilizer systems coming after the Combine.

Well there are -- we have a highly competitive farm family. And so to be able to compare those efficiencies might be a really fun game at harvest, if we're not stressed out enough. Darin, how does connectivity and digital services transform the role of CNH equipment in our operations?

Yes. Let me try to take that question in 2 different parts. Let me talk about connectivity for positioning and connectivity for machine monitoring. First off, connectivity for positioning. Our GPS receivers that I referred to earlier, communicate with over 120 satellites across 4 different constellations to give you accuracy within a couple of meters. We further refined that accuracy down to the sub-inch level with CNH's own RTK+ network consisting of over 1,700 ground reference stations covering over 1 billion acres. This is the largest agricultural network of its kind, not rivaled by any other OEM. Secondly, connectivity for machine monitoring. Fundamentally, what we're talking about here is the ability to send data wirelessly to and from the machine. Gone are the days of manual data transfer where I have to take a USB stick or compact flash card and literally drive it many miles to the machine and back to get and receive data. Now that our machines are connected to the cloud that allows us to access that data anywhere at any time with any device.

Very good. So Monte, we've talked about spraying applications. We've talked about combining applications. Let's go back in the season and talk about planting. And can you share with us some of the new technology involved in the planting piece of that puzzle.

Certainly. Planters are a great example of how we're leveraging our exclusive partnership with other industry leaders, developing their capabilities of their components to work seamlessly with our in-cab display for an exceptional customer experience straight from the factory. Our customers often tell us they want one display to be able to manage all their tasks and their all operations from a fingertip control standpoint. So this really speaks to our open customer-centric, tech culture really bringing our customers that the most beneficial smartest agronomic planters in that demand because we know farmers have a very tight window of opportunity in the spraying to put their crop and they have one chance to get it right.

That's correct. In fact, I would argue that Mother Nature is one of our business partners, and she's not always very nice to us. I had sent her many text messages that she has not responded to and we are up against a really tight time frame for each one of those particular seasons that all have to earn perfectly. Darin, there's a lot of trends in agriculture. What trends are you seeing that can be solved with Precision Technology?

Yes. I'd say there's three fundamental trends that we're seeing today: farm consolidation, larger farms, lack of skilled labor as well as rising input costs. And I'm proud to say we have technology solutions in production today to address all three of those areas. You'll be hearing more about that this morning, seeing those solutions out in the field this afternoon.

Very good. Lars, how will harvest automation continue to evolve going forward?

Yes, sure. I mean we're working on several fronts, but let me share two of them here with you today. We have harvested everything that goes on inside the Combine. And of course, the primary function of a Combine is to collect crop. But the Combine is also spreading biomass behind it. It's getting rid of all the materials we don't want in the tank. And to make sure that this is spread evenly, our operator today has to be on top of that all the time because, again, conditions are changing. Crops are changing, weather is changing, the wind is changing. So it's fair to say today, it's done suboptimal. So what we have done is build a system that fully automates the residue management. By putting radars on the back of the Combine, we can now monitor the biomass that's thrown out at the back of the Combine. If we see an uneven load on one side or the other side, the Combine will start making adjustments immediately. This system is so innovative that we were awarded a silver medal in Technicality in 2022.

Congratulations.

So we're very proud of this progress here. And again, we're first in the industry to be doing this. The other area that's very exciting for us in terms of automating or making it autonomous is, of course, the technology coming from Raven. I mean Raven has really filled a gap for us on the Combine side with the autonomous grain cart. And we're very, very excited to have that as part of our future development into more autonomy and more automation in the Combine. And I hope everyone will be as excited as I am when you see it out here would be running. The Combine will call in the grain cart. They'll start the unloading. Unfortunately, we won't be in the field because of the conditions. But you can see how it works. And when the Combine is empty, another partner is pushed and the grain cart will leave and go to a predesignated area to unload. So that's a very exciting technology, and we're happy to have it here.

Monte, Lars has alluded to residue management. And this is the terminology we use in the industry, but it makes residue makes it sound like this is something we don't want. What it really -- it's a nutrient management. We highly value what comes out of the back of the Combine. It provides essential nutrients for the soil. And it's important for us as farmers to have a beautiful seedbed come the next season that we plant. So residue management, the higher the yields, the bigger the crop, the more management we have to do around that residue. So it has become an increasing challenge for us as farmers. And once the harvest season is over, there are farmers who start shifting their focus towards tillage as a management skill set. How is automation going to make that process easier for farmers?

Obviously, you heard from some others today. But Case IH offers a tillage automation that enables the operator to easily set up, control and monitor their tillage equipment from the cab of their tractor like they've never been able to before and really manage those tough residue conditions. But tillage, as said, is -- can be automatically adjusted on the go for the optimal agronomic performance, and what this has done is really open a whole complete new paradigm and precision farming arena called prescription tillage. And you're going to see this firsthand today out at demo's and our on-farm research has showed that it's a positively with prescription tillage really increase their productivity by up to 10% when it comes to acreage, that means more acres per hour, more acres per day, but also we've seen fuel savings by up to 17%. And improved yields and return on investment from up to $36 per acre. So this is a real new technology, and we're happy to really and extremely excited in the field today to give you a first-hand look and sneak peak of this technology, not only this automated technology, but the first what we're going to show you with autonomy and tillage and what it means for us in the future. So we're -- you do not want to miss this demo today.

Thanks, Monte. I think even our nonfarmers in the audience can relate to fuel efficiency as being a pretty big efficiency gain for us. So that is all the time that we have today. We are going to turn the stage over for a discussion on sustainability.

Good morning. Good morning to everybody. It's definitely great to be here for me. I'm Stefano Fiorati, Head of the Zero Emission and Advanced Drivetrain. And before starting, I want to introduce you the two colleagues with me today: Mario De Amicis and Kelly Manley, sorry. Okay, I'm going to start talking about alternative fuels. Alternative fuels are critically important to unlocking a nonfarmer circular economy. They give farmer the possibility to turn traditionally farm waste into fuel. They provide them enough power to run their equipment, their room and in general, their operation. And they unlock new revenue streams where basically the farmer can sell excess of fuel or power to other farmers or even to the power grid. Now with emission-free, net zero impact tractors, farmer will improve definitely the quality of the product they produce and ultimately, the food that we all eat. With our partner, Bennamann, we have created an end-to-end solution for farmers to make fuel grade methane right on their farm by converting waste. For livestock farmers and dairy farmers, in particularly, [indiscernible] can be used to create methane. And now I'm really, really excited and proud to announce the final step that makes this a circular process for farming. It's a major milestone in our clean energy journey, and I'd like to announce today, for the first time, the New Holland T7 methane Power, the first-ever liquid methane power tractor. And now I'd like to show you the benefit it delivers. [Presentation]

Wow, wow. That's, that's amazing. This is a T7 with 270-horsepower tractor that deliver same power, same torque and same capabilities as a diesel machine without the need for any extra tank. Now let me give you some numbers. Methane generate 80% less overall emissions when compared to diesel and when compared to the limits allowed by the European Stage V emission regulation. The level of nonmethane hydrocarbon is reduced by 90%, the particulate matter by 98%, the carbon -- the NO2 sorry, by 62%, and the CO2 by 11%. The T7 tractor builds on our existing T6 methane power, which is something a product that you can buy already today. The T7 liquefied natural gas tank can hold 4 more times fuel with respect to the natural gas -- the compression natural gas tractor, meaning that our customer can run any mission including the most power-intensive operation without the need to stop and refill. One of the challenges with methane is the very, very low boiling point for the liquid natural gas. And to keep the gas -- the full gas tank cooler, our jointly developed cryogenic tank technology keeps the liquid methane cooler, even when not being used. The technology in this tank normally is more often found in spacecraft than in farming. So we can all say it is out of this world. To get you all closer to this story, I want to introduce you to Kevin and Kathy from Tregonhawke farm in Cornwall England. They are tenant farmers and are facing increased regulation, energy and fertilizer cost. Together with Bennamann, we have implemented our process here. So Kevin and Katherine are converting their slurry into methane and fertilizer. And they are using the generator powered by their methane gas to generate enough grid farm. This has all radically reduced their energy cost, satisfying 84% of their raised electricity demand. And the test delivered 787 tonne per year CO2 benefit, that, in other words, this system has prevented the same amount of CO2 as keeping into the atmosphere as data generated by some 100 Western households in a year. This tractor means that Kevin and Kathy can and definitely will take full advantage of the circular farm economy, creating a more profitable and sustainable business for them. And both of the tractor, the T6 and T7 can be fitted with the latest precision tech to drive further productivity benefit. While I'm primarily talking about machine today, we continue to explore multiple avenues. We are also investing in R&D on hydrogen, ethanol and other alternatives. As the accessibility for alternative fuel grows, we will provide equipment that can run on them. Not only giving farmer choice, but adding value for them and making their work even more sustainable. Thank you all, and then give the floor to Mario.

Thanks, Stefano. Good morning, everyone. As Stefano just said, our farmers are looking for sustainable energy solutions that provide a strong return on investment. And all of our customers need to ready themselves to comply with emerging regulation. Those are -- which either been introduced or plan in line with the Kyoto Protocol, Paris agreement and COP27. To cope with this market demand, our rectification road map will offer a range of products from e-Power generators up to fully electric vehicles. Our vision for a net zero future includes electrified vehicle technologies that also represent the next step in the company's decarbonization strategy. We don't just consider electrification as an alternative. It means to further improve the performance, efficiency and sustainability of internal combustion engine. We are developing our technology to offer different features for different mission in both agriculture and construction. In agriculture, the key customer needs are higher productivity and higher output. Through electrification, we provide higher productivity through reduced operating cost and lower risk of soil and crop contamination. Electrification has proven benefits. It provides sophisticated vehicle controls that are ideal for autonomy and other intelligent solutions. We are innovating three directions: Light electrification, onboard electric power generation connected to an internal combustion engine and these can also be used to electrified implements. Medium electrification, hybrid electric propulsion system that use an internal combustion engine and electrified driveline, which delivers higher driveline efficiency and better traction on top of the advantage of light electrification. And then the last one, full electrification, battery electric tractor with no internal combustion engine, deliver all the benefits of medium electrification alongside the zero emission. We are really proud of two key developments in this space for agriculture. First, e-Source, an external generator that provides energy to power electrified implements. I'm referring to sprayer, trimers and many others. A tractor equipped with e-Source can handle both standard and the electric implements. In field operation, it implements, deliver 3% reduction in fuel consumption in CO2 and 45% lower noise. Additional benefits include less oil contamination in the field, improved machine control, and safer operation versus the equivalent mechanical hydraulic implements. And today, we are really excited to share with you a world premiere. The new T4 electric power utility tractor, which you will see here today, really nice, right? And there are many benefits. It's a full electric tractor with no internal combustion engine. So that means battery-powered incredible responsiveness, amazing drivability with smoother shuttling gear shift, reduced noise and operating costs up to 90%. It has the same tractor fill but thanks to better drivability and enhanced comfort, it reduce strain during repetitive operation, such as loader work. As I mentioned before, this technology enables autonomy. And we will love electrification technology combined with autonomous feature through our investment partnership with Monarch. Monarch autonomy on our new online electric power will improve our customer productivity through autonomous moving transport and spring to name but tasks. It will leave the strain of farmwork thanks to following mode and just to control. The operator can control certain truck function while standing on the ground, for example, moving the tractor forward and to reverse. -- as well as raising and lowering the fronter real linkage. We also have mobile first digit application, enabling broader control, vehicle status and fleet management. In the future, this solution we all work in harmony. For low-power demand application, electrification is likely to best suit for highest power demand hybrid power trains running with renewable fuels are the best solution. The development of this combined portfolio of technology is a key element in our zero carbon commitment. For this to succeed, we need to carry on innovating for our customers. These solutions can only work if our customers decide to use them. So our partnership with them is key to making all this a success. Thank you, everyone. Now I'll leave the floor to Kelly.

Thank you, Mario. Thanks, Stefano. As you've just heard now and in all the presentations and panels this morning, sustainability is a big part of our legacy and essential to our future. When we think in sustainably at CNH Industrial, we're doing so in a way to address circularity and continue to reach the highest environmental, social and governance levels of our suppliers, our employees, investors, the wider community and, of course, our customers. As mentioned at Capital Markets Day, we're aligning with the science-based targets initiative, which expands our goals and ambitions and increases the focus of our sustainability strategy on reducing carbon emissions in three key areas: our operations, our products and with our customers. Stefano and Mario did a great job highlighting our company's opportunities for alternative fuels and electrification. These innovations and the sustainable solutions they deliver for our customers cannot be understated. We're aiming to reduce the average lifetime emissions of our equipment dramatically. And we're doing so in a way that deliberately delivers our customers a variety of solutions that meet their needs without sacrificing any of the performance they depend on. As Mario described, our path forward on electrification is an exciting one. Beyond electrification, and as demonstrated earlier today, all our products are evolving in ways that improve performance fuel costs and efficiency, and that will result in reducing the carbon footprint and related impacts of our products. The dramatic advances in automation and machine guidance the continuous improvement in machine optimizations and the future incorporation of alternative fuels are all significant improvements that add up to real results for our customers. All these innovations combined to deliver significant emission savings across our fleet and more importantly, these solutions will deliver customers with the choice they need with emerging technology while also reducing their footprint. Yet, in our industry, our greatest opportunity for limiting carbon emissions is related to our customers' work and how they grow their business. That means there's a much greater 10x in fact, opportunity beyond the use of our products to support our customers and the balance of carbon and emissions in our environment. I'm most excited about the precision and autonomy solutions that you've been hearing about throughout the morning, whether it's automation, connected platforms, autonomous tillage, precision spring, precision seating, or other developments in the works, each innovation translates into real life benefits for our farmers, their yields, lower emissions, less wastage of fertilizer and crop protection products and ultimately, a more sustainable outcome for everyone. And mentioned earlier, at CNH Industrial, we strongly believe in a vision of circularity for sustainability. And to briefly touch on Stefano's comments with regards to vitamin, we see a new way forward for sustainable agriculture and for our customers that is naturally self-sustaining and delivers wins on multiple fronts in multiple ways. We are in the business of breaking new ground, delivering the power of choice to our customers and leading by example in our operations through our products and with our customers. Now I'd like to leave the stage to my colleague, Derek Neilsen and Oddone Incisa to talk about the business impact driving all of this. Thank you.

Good morning, everyone. Last presentation before we go in the field, so we'll try and make it quick. So I think at this stage, you've already gained a lot of the insight into the groundbreaking technologies. We have in the marketplace and the strength of our agricultural business. So Oddone and I would like to close this morning's session by sharing with all of you how this all comes together and how it reflects in our overall business. Now we believe what really sets us apart is how we are focused on using all of this technology to unlock value for our customers, which in turn has a positive impact on our dealers and our stakeholders everywhere. Now our growth potential is tied directly to several key factors. To begin with, our global presence is one of our greatest strengths. We are always close to our customers, supporting them directly in 180 markets through 6,500 sales and service points with 29 manufacturing facilities and 18 research and development centers and with more than 100 technology partners. Following on from this, every firm, as you've heard today, has its own unique challenges making our customer base very diverse in terms of fan type, farm size and technology requirements. And for that, we have a complete and competitive portfolio, providing real choice for a wide range of farmers. And finally, as Scott alluded to earlier, our organization is fortified by our culture that enables our people to be truly customer-focused. For instance, when we are supporting our Brazilian farmers, we have a local expert in that region with our dealers to best understand their business needs, be it soil, crops, climate or whatever farming practice they choose to use. And by understanding this, we can really bring the best solution for our farmers, which, in Brazil, is clearly evident when you look at the customer Net Promoter Scores, which are truly best in the industry. And in turn, all of this is reflected in our market performance. And again, this is just one of many examples of how our scale and global reach really can deliver tangible results. Now let's talk technology. At Capital Markets Day in February of this year, we shared that the addressable market for the agricultural equipment machines and related person service is over $100 billion. However, as our Precision Tech solutions continue to increase efficiencies and reduce waste in farmers' operations, we will start to take advantage of other profit pools. For example, if we look at the U.S. alone, Farmers total expense according to the USDA is estimated to be several hundreds of billions of dollars in 2022. So by truly focusing on reducing these significant expenses, we are confident that we can grow our business further and what we expect to be a growing addressable market for us going forward. Now with regards to speed of transition, if I look at our recent McKinsey study of more than 1,300 U.S. farmers, we can find some additional data points. Amongst those growers interviewed, almost 1/4, say they will purchase precision technology in the next 2 years. So this research confirms that the demand for technology is growing and will drive replacement demand for agricultural equipment. And when all this rolls up within our ag revenues for this year 2022, we estimate that our precision technology will account for over $900 million. And we expect that to continue to grow at between 10% and 15% annually. And looking in the near term, we expect to deliver in excess of $1 billion in 2023. So to give a little more color on some of these numbers, I will pass you over to Oddone, who can take us through with some more detail.

Sure, Derek. So well, let me start with where we are today, and I like the work that we have or Derek and his team to be fair, have done so far. And clearly, we are coming from a place of strength. We have -- if we look at the first 9 months of 2022 for ag segment alone, so for agriculture, we have continued delivering solid year-over-year growth in net sales as well as strong year-over-year growth in our EBIT margin. And this year, actually, we have reached the highest profitability ever for our agricultural business. And this has been achieved by a combination of product mix, volume, of course, price realization across all the regions, and we plan to grow further also with a higher proportion of technology solutions. And when we look at this growth path, we focus on gross margin, because we think that our products with the technology that we're adding to them are delivering greater and greater value to our customers, and we're able to capture that value by offering more premium priced equipment. We have consistently grown on these Tech related revenues over the last 10 years, first through Retrofit and now more and more through factory-fit solutions. Now let me be clear, the $900 million -- maybe will be a little bit more than $900 million that Derek mentioned as revenue components for 2022 comes exclusively from precision tech components. So we are including in this number factory-fit components that are used for precision applications. We are including aftermarket components that are retrofitted to existing machines by our dealers. We are including technology that is sold by raising to third-parties OEMs or to independent dealers. And we are including fees paid by customers for unlocking or enabling some of the premium features that we are providing with apology. What we are not including in this number is the revenue that comes from the sales of the number of equipment be tractor combined or other equipment that nowadays probably will be hardly sellable without the technology in them. And on that note, over the last 2 years, we have nearly doubled the estimated net sales contribution from Precision Tech. And going forward, are excited, we expect to grow it between 0% and 10% and 15% annually. Now to support this growth, of course, we have stepped up our CapEx and R&D expenses. We said at the Capital Market Day, and we are confirming today, we intend that we are committed to invest around $4 billion in the next 3 years or in this 3-year period of the Capital Market Day of the strategic plan, which is double what we have been investing in 3 years prior to 2021. And this year, as of September, we have invested $750 million on agricultural alone and we are well on track to meet our commitments on R&D. Of course, we have advanced this with the Raven acquisition. And there, as we said today, and Scott said before, we have been acquiring knowledge, and we have acquiring experienced resources. And over the last 9 months, we have added more than 50% employees to the Raven Precision Technology team. And if you heard today, you will see in the field, we are really excited to cultivate more and more of that talent because we need it for our growth. Now growth in the margins with technology and the increased investments that I was talking about before, are fully reflected in our plan that we presented back in February of getting to 14.5% to 15.5% EBIT margin by 2024. And I would say that with the 2022 numbers, we are demonstrating that we are delivering on that plan. So on that, back to you there.

Thanks, Oddone. So I think from the numbers that I've only shared with you, clearly, our ongoing efforts to fully integrate our great iron and our great technology are truly paying off. And this is really driving growth in new equipment purchases, but also in replacement demand. Now installing precision technology before equipment leaves the factory, is clearly a strategic advantage that only OEMs possess. However, many farmers cannot afford to buy new equipment every year. So to grow the adoption of precision technology, we have to continue to offer retrofit solutions. And this, in turn, allows us significantly to improve the capabilities of existing machines and help farmers do more without having to always purchase new equipment. And again, this is another example where we will be sure to do business in a way that is not only profitable for us, but also fair for our farmers. And when you roll up at the end of the day, I mean, we're laser focused on one really important thing for our customers. And that is to ensure they have the freedom to farm their way. And speaking with farmers around the world, we know many of them want to own the technology and our customer-centric approach will ensure those right choices are made. In parallel to this, enhancing the digital capabilities of our dealers is one of our key of our strategic plan that we presented previously as we support customers in the field every day. And if you look at our dealers, most have already installed control rooms their premises and then adding data analysts and service personnel dedicated to support precision technology. And these -- I mean, the increase in the connectivity of this technology also opens up new opportunities for additional service revenues, especially through retrofitting the capability to the older machines and creating and securing loyalty in our parts and service business. But humbly, as we know, like every business, we are not experts in every area. And that's why we continue to look outside for solutions also. And again, Oddone will give us an insight and exactly how we're structured and doing that within the group.

Yes. So one of the way we intend to maintain our competitive edge is through our strategic investment arm, CNH Industrial Ventures, which we have established with the goal of accelerating new technology adoption and capitalize on the many start-ups and the many disruptive innovations that we have in the market. We understand that the sustainable development of agriculture requires a broader ecosystem, so not just us, not just equipment. And we are building on a broader network of partners. So far, we have invested in alternative propulsion, in digital, in autonomy in robotics, in artificial intelligence. And today, we have a portfolio with a few company. This includes more tractors, and we have their funders here today on the electrified agricultural tractors. And Bennamann, we talked about it before on the fugitive gas solutions. And both of them, you will see application in the field. Our latest partner, which I'm pleased to announce today is Stout which is a U.S.-based startup, focused on smart implements, which is powered by artificial intelligence. So our cooperation with these partners and their existing platform will help accelerating our development and their development of further solution that allow farmers to do more with less and more sustainably.

So in closing, we are committed to expanding our already formidable portfolio by continuing to automate across each step of the crop cycle that you saw today. And like we've referred to many times during the morning session, you'll see much of that in the field later today. We will then sell these innovations through an increasingly tech-savvy dealer network. And I say before, I say it again, is a pioneer in agriculture, dedicated to serving our customers. We will continue to deliver on our purpose. That is what you read all around you here today, breaking new ground with technology. Thank you. So at this point, in proceedings, again, initially I like to thank you for your attention today. I know it's been a relatively long morning. I'd also like to thank our team. I think they are passionate and commitment to the journey that we're on comes through in bundles. So again, I really appreciate the efforts and energy that they've put into today's event. And at this point, we'll hand over to Jason Omerza, who's Head of our Investor Relations. And we'll open up a short question-and-answer session because we really want to get to the field. At this point, I'll also invent some of the speakers from earlier.

Well, good morning, everybody. It's great to see you all here. And as mentioned, we're going to have a short Q&A session because we really want to get you out on the field. And remember that we'll have some time at lunch and at dinner to ask additional questions. [Operator Instructions] We have a couple of handheld mics in the audience and [indiscernible]

Stick with the Investor Relations.

[Operator Instructions] Kristen, let's start with our first question.

Kristen Owen from Oppenheimer. If we look at the four buckets that you've highlighted that are included in that $900 million of Precision Technology today and how you're thinking about the 10% to 15% growth rate over the coming years, what buckets would you highlight as being those with the greatest opportunity where maybe outsized growth relative to that 10% to 15%? And if I could ask you to double-click on some of the unique business models that you could see in those buckets?

Well, I mean, obviously, we think we can grow all four pretty significantly. The near-term opportunity is the aftermarket. Raven was so good at that. We know how to do it. We've got a broad geographical distribution, as Derek talked about. So that is really good. But as Tony and I talked about when we first acquired Raven, the real value unlock is when we fully embed their autonomy capabilities across our platform. And that's going to be a couple of years from now, but that is a nonentertainment. Derek, why don't you just talk about what you're most excited about?

Yes. I mean, generally, I'm excited about all of the opportunities. I mean, we don't -- we're not prioritizing our focus on one of them, the huge park out there of used equipment that we can take a real significant advantage of. The vast majority of our heavy equipment leaving the plants today is 100% enabling precision technology. So there really is a huge breadth of opportunity across all of them. And again, we're betting on all of those and expect to grow significantly in all of those going forward. The 10% to 15%, again, will be something that will grow for sure through the next year. So we're confident in that as a minimum.

Just a follow-up on the 10% to 15%. It seems like it starts off at maybe the lower end for 2023 to get to that $1 billion from the $900 million plus and then accelerates over the next couple of years after that. Can you just talk about what drives that acceleration over the next couple of years? And yes, I guess, let's just start with that.

Well, remember, this journey that we're on and then Parag started -- I mean, it's about taking our tech stack, which I wouldn't call it may be fragmented. Is fragmented the right word, Parag? Somewhat fragmented.

Diverse. I would say [indiscernible]

Diverse, somewhat fragmented. And really taking that and making it really, really good. That doesn't happen overnight. And trust me, I think it happened faster, Derek would have made it happen fast because I'm asking every single day, how do we go faster? How do we do more? But is that tech stack comes together it unlocks tremendous value it unlocks value with automation, with autonomy, with better precision capability, just better solutions across the portfolio, but it's -- we just can't get there overnight. So therefore, that's when the real value unlock comes '24 and beyond when that really comes brings to bear on for our customers.

Got it. So the follow-up on that is how do you juxtapose that with the farm cycle, given that it's a really robust time right now for farm income? And how do you think about that accelerating spend in farmers trying to -- wanting to spend more 2, 3 years out when it may not be as robust?

Yes. I mean let me just go back to the initial question for a few seconds. We said 900 plus, we've still got 24 days to go in the year, and we expect it to be a last plus. We can tell you the fact that all of this good technology and good stuff is happening and still a very complicated business environment. Supply chain is still constraining a lot of our plants to shut machines. And again, we are actively resolving that. And we've got a huge portfolio of front there as well. So one could argue we could go above $1 billion this year if we could get enough products, any customers' hands because they need there as well. So again, the technology will naturally be constrained by some other factors, we're confident as we get those products in the hands of our customers and farmers that will grow well in excess of the billing. The growth within itself in terms of the U.S. -- we're very customer-centric so you can bluff what you're going to give the customer and all the fantastic things you do. If they don't appreciate real value, they're not going to pay for it. And the value they pay is based on the return they get as well. So we are laser-focused on prioritizing the right things to bring the right solutions for our customers across the globe. And we're confident with that approach. Oddone said earlier, we've increased our revenues by 50% in the last couple of years by taint. I don't think we have to change path or do anything significantly different. We just need to keep on that path to keep religious in that path to keep executing the plan that we presented to use guys and girls back in February this year. And again, the results are there, and we're confident will come even more significant in the future.

Yes, I would just add that you're going to get the opportunity to see the value of the automation we give to our customers today. we're giving them a tremendous amount. You'll get to see that firsthand. And then you'll get to see the progressive on what that journey towards autonomy looks like, and you'll see that in some of the stations. So the upside is there, the opportunity is there, but we deliver an incredible amount of value to our customers across the farming cycle today, and we're going to just see more features and opportunities for unlock for them.

David Raso, Evercore. The balance sheet, assuming you have a big cash flow number for the fourth quarter, but assuming you hit that, any update on that would be great. But the balance sheet a little net debt on it at the end of the year if you hit those numbers. You mentioned some of the investment opportunities. They seem small. I was just curious if you're getting any purchase options with those investments? And how should we really think about utilizing that balance sheet if we do indeed start next year with very little net debt?

Yes. I mean, we say we can be opportunistic in acquisitions if we have the right case and the right opportunity. We don't have anything large in sight or anything of the size of Raven, but we have continuous discussion with the company we invest with on and we had an investment coming up to line. You said [indiscernible] for the time being, but they kind of move.

But I would add to that as well, we have some phenomenal products. Again, we said in February in terms of our product road map with indicated technology and precision, we have some phenomenal products come in the next 2 or 3 years. So again, we're looking for opportunities outside and how we can spend some of that cash, but we are really focused on bringing those products to market. That's going to be the core of success going forward.

If there's nothing large on the horizon right now and you're doing $2.5 billion, $3 billion of EBITDA, even one turn of EBITDA is a sizable number. So can you state a little bit if there are no large acquisitions on the horizon? Are you going to let the balance sheet sit the way it is? Or are there other things that we could do?

We've been pretty clear. If you go back to Capital Markets Day about how we intend to use our capital, we're going to be -- first, invest in growth, profitable growth for our customers and for us. We're going to pay a solid dividend. We're going to maintain our equity, how we're viewed from the debt markets, and we're going to return cash to shareholders. But acquisitions are part of our growth story. And where we -- and I -- we've not been bashful to date, and we won't be bashful going forward about buying something with really accelerates our ability to deliver value for customers. That is -- and our Board has been really supportive of that. I mean, we're not trying to protect. We're just trying to deliver more profitable growth and more value for customers, and we think they're very synergistic. And we talked about our investments to date, and we'll continue to do that, but I don't lay -- wake at night worried about where I'm going to how much cash is on the balance sheet because I'm very confident we're going to put it to use.

And quickly, I just want to make sure for the targets for '24, are some of the R&D expense increases from the last 3 years? Just on -- is that incremental news that is more of an expense than original number?

The number we talk about today are the numbers that we had in the plan, and we are working on that ballpark.

This is Tami Zakaria from JPMorgan. I'm curious, what's the margin profile of the $900 million Precision Ag revenues? And do you expect it to grow as the base scales?

No, no, no. It's funny. We had a healthy discussion about how we were going to answer this question? And I was just kind of looking at which one of these guys can answer because I think we came up with a very eloquent -- go ahead.

I'm optimistic, he's pessimistic. So I'll let pessimistic go first.

So it's -- I mean as you can expect, the margin profile of that $900 million is higher than the average margin profile that we have [indiscernible] to a factor of -- and we came with a formal yesterday of 1.5% -- 1.5x.

Not 1.5%.

Times and so that's what we are seeing. And then depending on the components, right, we have different components there. We have factory fit. We have aftermarket. We have other components that have different margins. But roughly, we can -- ballpark, we can work with that. Of course, as I said in the present, we have -- once we have more technology to our equipment, that the overall equipment becomes more valuable for the customer, and we can get a higher pricing. We are not putting that part of increased revenues, if you want, on the base equipment into that number. And that's debate that we're having -- we have been having over time. It's the first time we talk about a number for technology because it's always a bit uncertain how you measure it. So we wanted to be very clear on what we put inside and what we -- what is [indiscernible].

And again, just to complement that, use guys and Girls are going to sit in a $150,000 piece of equipment today and drive connects pert. And you're going to run at 30% more effectively and efficiently than people drove it to 3 years ago as well. If you can really unlock that amount of value for customers, they'll pay a minimum 30% plus for those type of solutions. So again, if you're getting very niche, very small, very particular savings, then you can command margins accordingly. If you can really unlock these huge value builds, the margins are really, really, really positive. So can be well in excess of 30%. But again, we know what we debate it 31, 32, 33. Honestly, our attention is focused on unlocking value for our customers, and then the margin for sure will come thereafter.

Got it. Super helpful. And one more question. You've had relationships with other companies in the past for your precision ag solutions. Now that you have Raven [indiscernible] are there any immediate offerings you can bring in-house? Or are you trying to stay with the existing relationships and build new stuff with even in your portfolio?

We have had and continue to have a great relationship with [indiscernible], with that's your question? So I mean let's just get that out there. Rob [indiscernible] and I have regular conversations. They're an important part of our business. They're important to our customers. But with Raven, we have a lot of dissimilar capabilities, and we have to kind of manage through that. But I mean it's a key part of both are a key part of our future growth.

So we only have time for one more, and we'll take that from the call. .

We'll take two more. Come on, [indiscernible] Jason. Otherwise, we're going to get just hassled when we're already lunch.

Nicole DeBlase from Deutsche Bank. Can you just clarify on the Raven aftermarket solutions? If that can be applied across the entire installed base. So all different brands of equipment. And secondly, when you think about the $900 million and the trajectory for the future, how much of that today is -- would you classify as recurring revenue? And is there a target for recurring revenue over the medium or long term?

So I'll do the first part. Yes, the answer is simply, yes. I mean we can take solutions and put them on any piece of equipment to no value for customers, then we'll do that. We're not in the business of restricting only for our products. and trying to penalize farmers the usual 10 of requirement. Again, if you look at many farmers today, they have mixed fleets. Again, there's farmers that go very specific in one brand, but there's many, many, many farmers that mix fleet. I think it would be a shame if we restricted our technology to only the products that we paint and our towers, we want to give them the best in space. So again, that is an opportunity for sure. I'll have the recurring revenue and then I don't know pattern me off. I mean, honestly, the everyone measures it differently. Everyone measure but to run upside down and out and comes with a different penetration numbers. The simple fact is it's a huge pot of opportunity, like I said, hundreds of billions. So again, we try not to lose time in trying to calculate this mythical recurring revenue, what's in or out to 3 decimal points. We focus on value for customers, profitability for our business and growth for both parties, including our dealers as well. And if we keep doing that path, we'll take full advantage of that opportunity. So with us, and I've seen an amount of time in trying to calculate what's in, what's shake all about?

Yes. I mean I think what you've seen is tech companies make a big pronouncement about their annual recurring revenue because everybody thinks it's safe. Well, when you're in our business, if you have a parts contract with a customer that you're going to -- that's annual recurring revenue. Is it have anything to do with [indiscernible]? No. What Oddone has built over many, many years in financial services is we have the ability to get paid on some any way they want. If they want to pay us on a subscription basis, we can do it. We want another recurring revenue contract. But as Derek pointed out, all of our focus is at eye to the customer. We're not going to tell them how they want to pay us. What farmers want is productivity and yield. And you make productivity harder to get if you start making them pay on a per acre basis. So we're just trying to make sure we can unlock that value better than anybody else in the industry and let them pay us how they want to pay us. .

I mean a good example is the [indiscernible] in your [indiscernible]. 10 years ago, you plugged the [indiscernible]. If somebody said back then you're going to pay recurring revenues in the time, you would look back and say and say it's now integrated in every vehicle we drive today. A lot of this technology is going to go each with the same pace so I'm sure it will be an endless debate.

You're right, Jason, no one more question. Thank you all very much -- oh is there one more?

Larry De Maria, William Blair. Talk about [indiscernible] fleets and all the connected software. I mean, growers now using JD Ops. They're using FieldView do you need to gravitate growers connected software for farm management in order to win? And how are you going to do that?

It's all about providing the best solution. I mean the work that Parag and his team are doing and then, I mean, it's ongoing regular work is how do we give the most value to customers. We talked about open architecture, and we are committed to an open [indiscernible] environment. We want to make it as easy as anybody else. If they want to use a Case IH combine in their JD Ops, let's make it easy for if they want to bring in a John [indiscernible] tractor into our system, we'll make sure that it works. But we are trying to make it as easy as possible for our customers to unlock value from whatever equipment they have and I think that's where you'll see our solutions going.

And again, if there is a restriction that it's not coming from our side. Like Scott said, I mean, we want to allow our farmers to fund their way with choice. We don't want to pay to farmers how they should farm. I mean you're ready up here today. I mean fourth-generation farmer, then high fat, they don't need us in this stage, they tell them how far. So we are -- I mean, if you look at our hesitating heritage, we put the best of all heads together and give that best solution to the customers. That's not going to change. If there's some restrictions on how we can access that data. It certainly won't come from us.

Yes. And I think you'll see it in the field today on all of the different stations. But like we from tillage to harvest, we offer great digital solutions to ensure that our farmers have the digital tools they need to combine with the iron. And to your point, like if they want a farm in a mixed fleet or a different environment, we give them all the tools necessary to support those worlds, too. So like we're not locking people in, and we're ensuring that they have the best quality products and the best continental to are the way they want to farm.

Okay. Thanks, everybody, for your questions. I know that you're anxious to get out in the field or anxious to have you get out there.