Kristen Owen

Kristen Owen asked for the 2025 outlook on the nitrogen cost curve amid market tightness and potential geopolitical resolutions, and also inquired about any Q1 production impacts from recent weather events.

Answer

EVP Bert Frost described a tight global market with strong demand and a high marginal cost of production set by Europe and Asia. CEO W. Will added that a peace resolution in Ukraine would not immediately impact supply. EVP & COO Christopher Bohn confirmed that Q1 operations have been strong with no significant weather disruptions, maintaining the 10 million-ton gross ammonia outlook for 2025.

Kristen Owen asked about any shifts in the retail business from Q2 to Q3 due to weather issues, and the growth opportunity for proprietary products, particularly in light of a large customer's restructuring.

Answer

Jeff Tarsi, EVP and President, Nutrien, confirmed no material shifts in the retail business from Q2 to Q3. He highlighted proprietary products as a strategic growth driver, noting significant margin increases in nutritionals and biologicals, as well as an uplift in crop protection margins during Q3. He mentioned a strong proprietary product portfolio, including seed, crop protection, and nutritionals/biologicals, with plans to introduce over 30 new products globally in 2026.

Kristen Owen asked about any shifts in the retail business performance between Q2 and Q3 due to weather, and the growth opportunity for proprietary products, especially with a large customer undergoing restructuring.

Answer

Ken Seitz, President and CEO, indicated no material shifts between Q2 and Q3. Jeff Tarsi, EVP and President of Nutrien, confirmed strong Q3 performance for proprietary products, with significant margin increases in nutritionals, biologicals, and crop protection. He highlighted a robust portfolio and plans to introduce over 30 new products globally in 2026, independent of any specific customer restructuring.

Kristen Owen from Oppenheimer & Co. Inc. requested a deeper look into the retail EBITDA bridge for the second half of the year, asking if any factors that were headwinds in the first half could become tailwinds.

Answer

EVP & President - Global Retail Jeff Tarsi outlined several positive drivers for the second half. He highlighted a continued heavy focus on expense reduction, an opportunity to increase sales of high-margin foliar nutritionals, and an improved outlook for the Australian business following recent rains, which should boost proprietary product sales.

Kristen Owen requested a deeper look into the retail outlook, specifically asking about the assumptions for the crop protection chemical (CPC) and seed businesses within the 2025 guidance.

Answer

CEO Kenneth Seitz deferred to CFO Mark Thompson, who detailed the retail guidance bridge. Thompson explained that the midpoint of the guidance ($1.75B) assumes underlying EBITDA growth of about $125 million after accounting for FX headwinds and non-recurring items. This assumes continued growth in proprietary products, higher crop nutrient volumes, and recovery in Brazil. Specifically for crop protection, the midpoint assumes margins at historical average levels. Upside would come from stronger ag fundamentals and above-average CPC margins.

Kristen Owen inquired about the integration of Corteva's digital assets (e.g., Carl, Granular) between the seed and crop protection businesses, and whether additional investments in digital infrastructure are needed over the next 6-9 months to support the standalone businesses post-split.

Answer

CEO Chuck Magro confirmed that Corteva's digital support systems are currently integrated and that a portion of the $80 million-$100 million synergy costs will be allocated to carefully separate these businesses. This ensures both standalone seed and crop protection companies retain the necessary AI and digital support to continue their strategic journeys, leveraging past investments in this area for productivity, cost reduction, and innovation speed.

Kristen Owen inquired about Corteva's digital assets, including internally built platforms like Granular and acquired assets, asking about their integration between the seed and crop protection businesses and whether new investments in digital infrastructure are needed to support the standalone businesses post-separation.

Answer

CEO Chuck Magro confirmed that Corteva's digital support systems are currently integrated. He stated that a portion of the $80 million-$100 million synergy costs for separation will be allocated to carefully separate these digital assets, ensuring both seed and crop protection businesses have the necessary AI and digital support. Magro emphasized that strategic investments in this area have been crucial for driving productivity, cost reduction, and innovation speed, and the company is confident in maintaining these capabilities for both entities.

Kristen Owen of Oppenheimer & Co. Inc. inquired about second-half seed assumptions, particularly the velocity of the order book in Brazil and the dynamics behind seed pricing expectations for the region.

Answer

EVP Judd O’Connor reported that the Brazil order book is "unusually well ahead of pace," with 90% of summer crop and 40% of safrinha orders already in hand. He confirmed that low-single-digit price growth is the right expectation for the competitive Latin American market, where acreage is expected to increase.

Kristen Owen asked for a reminder of Corteva's currency hedging practices, including the typical duration of hedges, given the significant FX swing factor in the 2025 outlook.

Answer

CFO David Johnson explained that Corteva's strategy is to hedge currencies within the year, for the year, aiming for consistency between quarters rather than mitigating year-over-year impacts. He noted the Brazilian Real (BRL) is the largest exposure (~40% of the total impact) and that the company's currency exposure is more weighted to the second half of the year.

Kristen Owen asked for elaboration on the new wins cited in both taste and scent, given the challenging volume backdrop, and what contributed to these successes.

Answer

CEO Erik Fyrwald explained that despite economic challenges, IFF's focus on strengthening commercial and innovation pipelines, customer focus, and increasing win rates across segments and geographies contributed to wins. He provided examples: the EnviroCaps scent encapsulation technology commercialized in laundry with a major CPG company, and a Miu Miu by L'Oréal fine fragrance win by master perfumer Dominique Ropion.

Kristen Owen asked for elaboration on the new wins cited in both the Taste and Scent segments, given the challenging volume backdrop, and what contributed to these successes.

Answer

CEO Erik Fyrwald highlighted IFF's strong focus on strengthening its commercial and innovation pipelines, leading to an increased win rate across segments, businesses, and geographies. He provided examples, including the commercialization of IFF's ENVIROCAP scent encapsulation technology in laundry with a major CPG company, and winning a Miu Miu by L'Oréal fine fragrance with master perfumer Dominique Ropion.

Kristen Owen asked for a two-to-three-year outlook on what the recent board refresh will help IFF accomplish as it moves into its next strategic phase.

Answer

CEO J. Erik Fyrwald stated the goal is to become a world-class leader in innovation. He described the board as being at 'full strength,' highlighting new members like Kevin O'Byrne (Chairman), Mehmood Khan (R&D), Jesus Montas (Digital/AI), and Cindy Jamieson (CFO experience), who bring critical expertise to guide strategy and execution.

Kristen Owen of Oppenheimer inquired about IFF's capital allocation philosophy following the completion of the pharma sale, specifically how it will balance further deleveraging with redeploying capital for growth.

Answer

CFO Michael DeVeau outlined a clear sequence of priorities. First is completing the debt tender to achieve a leverage ratio below 3x net debt to EBITDA. The top priority thereafter is reinvesting in CapEx to support core businesses. Following that, the company will evaluate small, bolt-on acquisitions and consider capital returns to shareholders through its dividend and a potential share buyback program.

Kristen Owen asked for elaboration on the sources of the 1% to 4% volume growth expected in 2025, questioning whether it stems from new business wins or underlying demand, especially as CPGs report that volume is becoming harder to secure.

Answer

CEO Jon Erik Fyrwald explained that the 2025 volume growth forecast of 1-4% is a normalized rate, following 2024's 6% growth which was partially inflated by the absence of destocking. He attributed the expected growth primarily to strong commercial pipelines and high win rates in the Health & Biosciences, Scent, and Taste segments. Fyrwald also highlighted a three-year strategy focused on investing in these high-margin businesses to close the margin gap with top competitors, while simultaneously driving aggressive productivity in the Food Ingredients division.

Kristen Owen from Oppenheimer asked for an update on the Functional Ingredients turnaround, specifically focusing on order activity during the current contracting period.

Answer

CFO Glenn Richter explained that the contracting period is primarily for pricing and is going well, reflecting a two-year effort to remediate the business. He detailed the successful turnaround strategy, including fixing service levels, reinvesting deflation into competitive pricing, and reenergizing the sales pipeline. He noted they have regained about half of the lost volume and are expanding margins, with a long-term plan to restructure the supply chain to reach mid-teens EBITDA margins.

Kristen Owen asked for a deeper dive into Trimble's defense against AI disintermediation in SaaS, specifically identifying areas of stronger moat and potential vulnerabilities within its diverse portfolio. She also inquired about the Transportation and Logistics business, its continued growth despite a challenging end market, and any macro or portfolio-specific factors, like the Freight Marketplace, that provide optimism for 2026.

Answer

President and CEO Rob Painter emphasized Trimble's strongest moat lies in connecting its field and office solutions, hardware and software, to bridge the physical and digital worlds, creating a flywheel from point solutions to ecosystems. He stressed that customer value from multiple solutions and embedded AI strengthens retention and new logo acquisition. While acknowledging the need for humility and continuous investment to counter startups and incumbents, he expressed confidence in navigating the AI opportunity within the 3430 model. For Transportation and Logistics, Mr. Painter noted no meaningful macro green shoots for 2026, planning for a similar market. He highlighted controllable factors like a 400 basis point improvement in H2 margins, outperforming end-market growth, and product successes like Freight Marketplace and large bookings for mapping technology in Europe and North America.

Inquired about current customer sentiment, whether elongated sales cycles are improving, and the success of the business model transition in the Field Systems segment from hardware sales to recurring revenue.

Answer

Management stated that customer sentiment is stable, with strong pockets in energy, defense, data centers, and civil infrastructure. Trimble's productivity solutions are well-positioned to help customers manage inflation. The Field Systems model transition is succeeding, evidenced by 17% ARR growth, as the subscription model makes technology more affordable and provides customers with continuous updates ('technology assurance').

Kristen Owen asked about the drivers behind the strong performance and resilience of the Field Systems business, shifts in the competitive landscape, and the go-to-market strategy for new OEM partnerships following the CAT JV restructuring.

Answer

CEO Robert Painter attributed the success to serving a large, underpenetrated market with superior products and a world-class dealer channel (SITECH). He highlighted that the subscription model is expanding the addressable market. He also noted new partnerships with John Deere and Liebherr, and the establishment of new technology outlets to broaden market reach and serve mixed fleets effectively.

Kristen Owen of Oppenheimer & Co. Inc. asked about the drivers behind the Field Systems segment's resilient performance compared to peers and requested context on new OEM partnerships following the CAT JV restructuring.

Answer

Executive Robert Painter attributed the Field Systems segment's outperformance to serving a large, underpenetrated global market with strong demand for mixed-fleet solutions. He highlighted the success of their product portfolio and global dealer channel, noting that the subscription model is expanding the addressable market. He confirmed the go-to-market strategy is centered on the SITECH channel, now enhanced by a renewed CAT relationship and new partnerships with John Deere and Liebherr, which expands their OEM ecosystem.

Kristen Owen from Oppenheimer & Co. Inc. asked about the expected drivers for AECO's mid-teens ARR growth in 2025, specifically the mix of new logos versus cross-selling, and inquired about the potential for AI to drive internal operating efficiencies.

Answer

CEO Robert Painter stated that AECO's growth is expected to come approximately two-thirds from existing customers and one-third from new logos, aligning with the previously discussed $1 billion cross-sell opportunity. Regarding AI, he described the 100-200 basis point margin improvement heard elsewhere as 'aspirational,' noting that while Trimble sees productivity gains in R&D and marketing, a quantifiable company-wide impact is not yet available.

Inquired about ACV bookings and cross-sell/upsell within the TC1 portfolio, and later asked about the new John Deere partnership, its scope, go-to-market strategy, and its relationship with the long-standing Caterpillar JV.

Answer

ACV bookings were strong, with TC1 bundles driving growth in AECO and Transporeon bookings up over 30%. The Deere partnership enables 3D upgrades on their machines and is seen as complementary to the CAT relationship, serving unmet customer demand without creating channel conflict.

Kristen Owen of Oppenheimer inquired about the drivers of ACV bookings, particularly cross-sell within the TC1 portfolio, and later asked for details on the new John Deere partnership and its interplay with the Caterpillar relationship.

Answer

Executive Robert Painter confirmed strong ACV bookings across the company, with Trimble Construction One (TC1) driving above-average growth in the AECO segment through prepackaged bundles. He also detailed that the new John Deere partnership is complementary to the long-standing Caterpillar JV, aiming to expand technology adoption by enabling 3D upgrades on Deere machines through both dealer networks without creating channel conflict.

Kristen Owen asked for color on ACV bookings and cross-sell opportunities within the Trimble Construction One (TC1) portfolio, and later inquired about the new John Deere partnership in the context of the long-standing Caterpillar relationship.

Answer

Executive Robert Painter confirmed strong ACV bookings, with a majority in the AECO segment now being TC1 bookings. Regarding the partnerships, he explained that the John Deere agreement is complementary to the Caterpillar relationship, aiming to grow overall technology adoption by giving customers more choice without creating channel conflict.

Kristen Owen asked about the key metrics investors should focus on for Bioceres Crop Solutions over the next six to nine months, given the company's transition and targets for gross and EBITDA margins. She also inquired about the cost savings initiatives, specifically the $3 million to $3.5 million per quarter cadence.

Answer

CEO Federico Trucco emphasized continued focus on cash generation to improve leverage ratios, with less priority on top-line growth. He highlighted expanding profitability through scaling up profitable products like RhinoTech and UVB, and the positive impact of the HB4 seed business transition on gross margins. Trucco detailed cost reductions, aiming to lower quarterly OpEx from $28-$30 million to closer to $25 million, stemming from workforce streamlining and right-sizing capacities, which began in Q4 FY25.

Kristen Owen asked about the key metrics investors should focus on for Bioceres Crop Solutions over the next six to nine months, given the long-term targets of 40% gross margin and 22% EBITDA margin, and whether these targets rely on market growth or new product differentiation. She also inquired about the specifics of the $3 million to $3.5 million quarterly cost savings initiatives.

Answer

CEO Federico Trucco emphasized continued focus on cash generation, improving leverage ratios, and expanding profitability by scaling the most profitable products like RhinoTech and UVB. He noted the seed business transition and cost reductions would contribute to achieving a +40% gross margin profile. Key indicators include working capital below five months of sales, moderate top-line growth, and expanding EBITDA and gross margin. Trucco clarified that targets rely on a rebound in the Argentine Ag input market (where market share hasn't been lost) and continued growth in the U.S. and Brazil from new products. Regarding cost savings, he stated OpEx is targeted to reduce from $28-$30 million to closer to $25 million per quarter, achieved through workforce streamlining, right-sizing capacities, and the seed business strategy shift, with some savings already realized in Q4 FY25.

Kristen Owen inquired about the key metrics investors should focus on for Bioceres Crop Solutions over the next six to nine months, given the company's transition and targets for gross and EBITDA margins. She also asked for clarification on whether these targets rely on market growth or differentiated product growth, and sought more details on the cost savings initiatives, specifically the $3 million to $3.5 million per quarter cadence.

Answer

CEO Federico Trucco emphasized continued focus on cash generation to improve leverage ratios, prioritizing expanding profitability over top-line growth by scaling profitable products like RhinoTech and UVB, and the positive impact of the seed business transition. He clarified that targets require a rebound in the Argentine ag input market and sustained growth in other geographies. Trucco detailed cost savings from streamlining workforce and right-sizing capacities, aiming to reduce OpEx from $28-$30 million to closer to $25 million per quarter.

Kristen Owen inquired about the remaining working capital unwind from grain inventories, long-term expectations for EBITDA to free cash flow conversion, and the current on-the-ground sentiment in Argentina given recent macroeconomic changes.

Answer

CFO Enrique López Lecube stated that another $10 million in cash generation is expected from the HB4 business transition. He aims to return to a historical net working capital level of 4-4.5 months of sales and to get EBITDA-to-free cash flow conversion as close as possible. He also noted that Argentina's market is normalizing and showing signs of recovery, with a healthy winter crop season expected. CEO Federico Trucco added that a good harvest is boosting farmer morale. CCO Milen Marinov commented that the company is emerging from a 'perfect storm' and is insulated from U.S. tariff volatility since most products sold in the U.S. are manufactured there.

Kristen Owen inquired about the long-term economics of the new seed business partnerships, the transition's impact on the balance sheet and leverage, and how this strategic shift redefines Bioceres' market identity and capital allocation priorities.

Answer

CEO Federico Trucco explained that the new partnerships would immediately lower costs and generate royalties, with more significant results in 2-3 years, while broadening monetization strategies beyond drought tolerance. CFO Enrique López Lecube added that the pivot will free up working capital from grain inventories over the next 3-4 quarters and reduce SG&A, allowing for reallocation to the global biologicals business. Trucco clarified that the company will now focus heavily on high-return biologicals while pursuing seed innovations through partnerships, particularly in gene editing, using its existing patented GMO platform.

Kristen Owen inquired about farmer sentiment in Argentina, the lingering impact of the leafhopper pest, and progress on transitioning the HB4 soy business model.

Answer

CFO Enrique López Lecube noted farmer sentiment is shifting from cautious to optimistic due to rains and potential government action on export taxes. He added that reduced leafhopper pressure could spur late corn planting. Regarding HB4, he confirmed the transition is a work in progress and that the industry is engaging more proactively to find partnership opportunities.

Kristen Owen of Oppenheimer & Co. Inc. asked for a quantification of the expected sequential EBITDA improvement from Q2 to Q3, given the positive guidance on pricing and volumes.

Answer

While not providing a specific number, Luciano Pires, EVP & CFO, offered a qualitative bridge for the expected significant increase. He detailed positive drivers for Q3, including higher prices and volumes with lower costs in Phosphates; higher prices and lower turnaround costs in Potash; and guided for Mosaic Fertilizantes EBITDA to be 'over $200 million,' and potentially 'well above,' confirming a much stronger quarter is anticipated.

Kristen Owen asked for an update on the expected cadence of potash cost of production for the remainder of the year, given Q1 headwinds and the maintained annual target.

Answer

President and CEO Bruce Bodine explained Q1 costs were high due to weather-related curtailments at the low-cost Belle Plaine mine. He expects costs to improve significantly as the Esterhazy hydroflow project adds low-cost tonnes. EVP and CFO Luciano Pires clarified that costs should be in the target range in the second half of the year.

Kristen Owen asked for more detail on the $120 million underlying quarterly EBITDA run rate for the Fertilizantes business, including the cadence between the first and second half, and the potential for channel refilling given the shift in customer base.

Answer

Jenny Wang, EVP of Commercial, clarified that the strategic shift in the Brazilian customer base has already occurred and she does not anticipate a major volume change between the first and second halves of the year. Luciano Pires, EVP and CFO, reiterated that the $120 million quarterly EBITDA run rate for Fertilizantes should be considered a floor, with upside expected from Q2 onwards.

Kristen Owen requested a breakdown of the updated $600 million full-year tariff impact, including mitigation efforts and allocation across business segments.

Answer

Josh Beal, Director of Investor Relations, detailed that the increase was driven by higher rates on Europe, steel, and India, with Europe and steel comprising about 50% of the total. Mitigation efforts include USMCA certification and sourcing changes. CFO Joshua Jepsen added that excluding tariffs, the equipment operations' decremental margin is a solid 40%.

Kristen Owen inquired about the movement velocity of used equipment inventory, especially with government ECAP funds flowing to farmers, and how this might impact Deere's net pricing capability for the rest of 2025 and into 2026.

Answer

Josh Rohleder, Manager of Investor Communications, noted that while used combine inventory has improved, the focus remains on high-horsepower tractors, where inventory levels have stabilized but sales pace is still uncertain. CFO Josh Jepsen added that moving used inventory is a key factor to unlocking the ag cycle, along with a new farm bill and potential upside from trade or weather events.

Kristen Owen asked for more detail on expectations for a volume or price recovery in Brazil, following positive commentary on the region.

Answer

Executive Josh Beal pointed to 'green shoots' like improving farmer profitability and strong tech adoption but noted visibility is limited by a short 3-month order book. He confirmed positive low single-digit price realization in Q1 and expects positive pricing for the full year, a significant turnaround from negative pricing last year when the company was focused on reducing inventory.

Kristen Owen of Oppenheimer & Co. Inc. inquired about the drivers for gross margin expansion following the Texas facility's reconfiguration, the primary goals for the newly hired Chief Commercial Officer, and the current status of plans for a future Midwest facility.

Answer

President, CEO & CFO Kathleen Valiasek explained that gross margin expansion will be driven by tower upgrades, pricing, product mix, and cost reductions, targeting 33-34% in the near term. She noted the new CCO will amplify the current team's efforts by expanding strategic customer relationships. Valiasek also confirmed that a Midwest facility and other expansions are in active planning stages. Executive Chairman Craig Hurlburt added that customer engagement is at an all-time high, and the new CCO will help capitalize on this demand.

Inquired about the drivers for gross margin expansion following the Texas facility's reconfiguration, the strategic goals for the newly hired Chief Commercial Officer, and the status of plans for a new Midwest facility.

Answer

The company stated that gross margin expansion will be driven by multiple factors including tower upgrades, pricing, product mix, and cost reductions, with a near-term target of 33-34%. The new CCO will focus on amplifying strategic customer relationships. Plans for a Midwest facility and expansions of existing sites are actively in the planning phase to meet high customer demand.

Kristen Owen of Oppenheimer & Co. Inc. inquired about the key drivers for the anticipated revenue lift in the second half of 2025, specifically asking for details on the 20% yield improvement in Georgia and the company's ability to sell the increased output. She also requested clarification on modeling the income statement impact of the recent debt restructuring, particularly regarding cash versus non-cash interest expense.

Answer

Executive Kathleen Valiasek explained that the 20% yield increase resulted from a successful R&D program involving light optimization in the stack phase, which will be implemented in other facilities in Q3. She attributed the second-half revenue ramp to this increased production, new Walmart projects, and expanded Grab and Go salad offerings. Regarding the debt restructuring, Valiasek clarified that GAAP rules require the $197 million debt write-off to be amortized over ten years, which will reduce reported interest expense on the P&L to under $5 million per quarter. She also noted the company will have no cash interest or amortization payments for two years.

Kristen Owen asked about the balance between corn oil pricing upside and protein market headwinds, the impact of the EcoEnergy marketing transition, and the company's long-term strategic positioning over the next three to five years.

Answer

SVP Imre Havasi and EVP Chris Osowski highlighted the structurally strong corn oil market and internal efforts to maximize yields. CFO Phil Boggs noted the EcoEnergy partnership has already yielded over $50 million in working capital benefits. Interim Principal Executive Officer Michelle Mapes stated the company's 3-5 year outlook is mission-critical on becoming a low-CI biofuel producer, while the broader strategic review remains active.

Kristen Owen asked about the upside from corn oil pricing versus protein headwinds, the impact of the EcoEnergy partnership, and the company's long-term strategic positioning over the next three to five years.

Answer

SVP Imre Havasi noted a solid outlook for corn oil, supported by renewable diesel demand. CFO Phil Boggs highlighted a greater than $50M working capital benefit from the EcoEnergy partnership. On long-term strategy, Interim CEO Michelle Mapes emphasized the current focus is on execution and profitability, with the low-CI biofuel strategy being 'mission critical' for the future.

Kristen Owen of Oppenheimer inquired about the future options for the idled Fairmont facility and whether the company is implementing structural changes to its hedging strategy.

Answer

Todd Becker, President and CEO, stated that the Fairmont plant is a valuable asset, especially with its potential carbon pipeline connection, and while monetization is an option, they are hopeful the pipeline project proceeds. Regarding hedging, he acknowledged shareholder feedback and explained that decisions are assessed quarter-by-quarter with the Board, aiming for less reliance on it as new income streams come online.

Kristen Owen asked about the outlook for protein margins and premiums heading into 2025. She also requested more detail on the mechanics of monetizing carbon credits, including potential pipeline fees.

Answer

CEO Todd Becker acknowledged margin compression but noted that premiums are realized in international and pet food markets. He explained that carbon monetization involves a fixed transport fee with their pipeline partner, with Green Plains retaining all upside from 45Z, 45Q, and LCFS/voluntary credits. He added that markets to monetize these credits are well-developed.

Kristen Owen of Oppenheimer & Co. Inc. requested an analysis of the data center opportunity, including its total addressable market across related infrastructure like energy and water, and the key customer personas Bentley is targeting.

Answer

Executive Chair Greg Bentley noted that the US AI strategy necessitates infrastructure investment, especially for the grid. CEO Nicholas Cumins added that data centers are like 'mini cities,' creating a prime opportunity for Bentley's portfolio. He highlighted that hyperscalers are receptive to digital twin workflows and pointed to the systematic uptake of Bentley's Synchro software for data center construction modeling.

Kristen Owen asked about trends with European customers, including sentiment, backlog, and project mix, in light of potential ceasefires, defense spending, and infrastructure stimulus packages.

Answer

CEO Nicholas Cumins described growth in EMEA as solid, with ongoing investments from the EU's next-generation plan. He highlighted new defense-related spending, such as the EU's 'rearm Euro plan,' which includes upgrading dual-use transport infrastructure. He also mentioned Germany's proposed EUR 500 billion infrastructure plan as a massive future tailwind. Executive Chair Greg Bentley added that he remains impressed by the strong and serious infrastructure investment in Europe.

Kristen Owen questioned the ramp-up of the Bentley Asset Analytics platform, particularly in construction, and how its monetization model differs from offerings in telecom or highways.

Answer

CEO Nicholas Cumins explained that the commercial model is asset-based in all cases, but the revenue recognition differs. Use during the construction phase is typically not recurring, whereas ongoing use for asset operations is. Executive Gregory Bentley added that construction projects serve as a good entry point, with the potential for renewal into the asset's operational phase.

Kristen Owen from Oppenheimer & Co. asked about the drivers behind the consistent SMB growth and whether the newly acquired Cesium platform could act as a TAM expander by attracting new customer segments.

Answer

Executive Chair Greg Bentley credited the Virtuosity subscription model and its digital engagement approach for the sustained SMB success. He agreed that Cesium could expand the Total Addressable Market (TAM), viewing its open-source model as the 'ultimate example of digital engagement' that can attract a broader, younger user base to the Bentley ecosystem.

Kristen Owen of Oppenheimer & Co. Inc. sought clarity on the key remaining uncertainties related to tariffs that could impact Caterpillar's financial guidance.

Answer

CFO Andrew Bonfield explained that the situation remains fluid. He noted that uncertainties include potential agreements with more countries, which could be a positive development, as well as ongoing Section 232 and 301 investigations, which could have a negative impact.

Kristen Owen asked for more detail on the 'demand deterioration' assumption embedded in the company's alternative scenario for the second half of the year, specifically which segments would be most affected and how the backlog might provide an offset.

Answer

CFO Andrew Bonfield explained that this scenario assumes negative global economic growth in the second half, which is more pessimistic than most forecasts. He stated that the Construction Industries (CI) segment would be the most sensitive and bear the majority of the sales deterioration. The Resource Industries and Energy & Transportation segments would see a much smaller impact, primarily related to general activity levels.

Kristen Owen of Oppenheimer questioned the validity of the current margin target range, asking if strong recent performance and a solid outlook suggest that an upward revision to the range should be expected over time.

Answer

Executive D. Umpleby stated that for 2025, the company is guiding to the top half of the existing range and is not changing it, emphasizing the focus on absolute OPACC dollar growth. Executive Andrew R. Bonfield added that the targets are progressive and require significant operating leverage, making the current range still valid.

Kristen Owen asked about competitive dynamics in North American Construction Industries, questioning the impact of international competition, potentially aided by a weak yen, given high dealer inventory levels.

Answer

Chairman and CEO Jim Umpleby expressed confidence in Caterpillar's ability to compete through technology and dealer strength, acknowledging currency fluctuations are a factor. CFO Andrew Bonfield added that dealer inventory is complex and that for some product lines, higher inventory levels are competitively advantageous, not a universal negative.

Kristen Owen from Oppenheimer & Co. Inc. questioned the conservatism of Ingredion's full-year guidance after strong quarterly beats and asked for details on the operating leverage in the Texture and Healthful Solutions segment.

Answer

EVP & CFO Jim Gray and President & CEO Jim Zallie attributed the cautious guidance to ongoing tariff uncertainties and their potential indirect impact on customers. For the Texture and Healthful Solutions segment, Gray highlighted a "step change benefit" from improved procurement and demand forecasting, while Zallie noted that lower raw material costs impacted price/mix but that innovation and customized formulations would lift margins over time.

Kristen Owen of Oppenheimer & Co. Inc. asked for more detail on the surprisingly strong LATAM operating income, specifically regarding intentional portfolio shifts. She also inquired about the size of the Pakistan affiliate and the potential use of proceeds from its divestiture.

Answer

CFO Jim Gray attributed the strong LATAM performance primarily to lapping the significant negative impact from the Argentine peso devaluation on its JV in Q1 2024. He noted the rest of the LATAM business also saw positive op income growth from shifting production to higher-value uses. Regarding Pakistan, Gray confirmed its size is comparable to the divested South Korea business but stated it's too early to comment on the use of proceeds.

Kristen Owen asked for clarification on the wide range of the 2025 EPS guidance, seeking the key swing factors that would lead to the high or low end of the forecast. She also inquired how the $100 million CapEx investment in Indiana fits into the 2025-2026 capital allocation strategy and if it would impact M&A or share repurchases.

Answer

EVP and CFO Jim Gray explained the guidance range reflects uncertainties in foreign exchange rates, co-product values, and corn costs on the low end, with potential upside from stronger-than-expected volume growth and customer reformulation wins. He positioned the Indiana investment as a high-return (10% to mid-teens IRR) opportunity enabled by a strong balance sheet. President and CEO Jim Zallie affirmed that the company retains the balance sheet flexibility to pursue M&A alongside organic investments and share repurchases.

Kristen Owen from Oppenheimer & Co. Inc. asked for more detail on the improved European consumer behavior, questioned channel inventory levels, and sought to understand the key drivers of the quarter's gross margin improvement.

Answer

President and CEO James Zallie attributed European growth to lapping a soft prior-year quarter and increased consumer mobility driving demand for convenience foods. EVP and CFO Jim Gray added that he sees steady demand rather than significant channel restocking. Zallie explained that gross margin improvement was driven by a combination of renegotiated contracts, lower raw material costs, and better fixed cost absorption from higher production volumes.

Kristen Owen of Oppenheimer & Co. Inc. requested more detail on the positive commentary regarding Europe, asking to understand the source of the 'green shoots' and whether they were driven by CNH-specific gains or broader market trends.

Answer

CEO Gerrit Marx specified that the positive demand is currently concentrated in tractors. He attributed the trend to a combination of factors, including effective market share defense, strong sales in Poland fueled by a government purchase program, and improving farmer confidence in Germany. He characterized the recovery as 'spotty' but indicative of a positive shift in farmer sentiment.

Kristen Owen from Oppenheimer & Co. Inc. inquired if customers are pressuring Avient to absorb tariff-related costs, impacting pricing dynamics. She also asked for the strategic rationale behind the new cash flow revolver.

Answer

President, CEO & Chairman Ashish Khandpur acknowledged pricing pressure but stated Avient works to find material alternatives. He noted that while commodity polymer prices are favorable, pigment and performance material costs are rising. In cases like flame retardants, where costs have tripled, price increases are being passed on to customers. SVP & CFO Jamie Beggs explained the new cash flow revolver replaced an asset-based loan to ensure adequate liquidity following the divestiture of the distribution business, which had reduced the available asset base for the previous facility.

Kristen Owen requested more detail on innovation briefs from customers related to reformulating products to mitigate tariff impacts. She also asked for an update on customer channel inventory levels.

Answer

SVP and CFO Jamie Beggs described reformulation as a continuous process, leveraging Avient's extensive materials database to find substitutes without compromising quality. President and CEO Dr. Ashish Khandpur added that channel inventories are very lean as customers are in a 'wait-and-see' mode, which has shortened order book visibility from a historical 45 days to 20-30 days.

Kristen Owen asked for details on the new incentive compensation strategy, including its key performance indicators (KPIs), and requested an update on the free cash flow outlook following the decision to pause ERP spending.

Answer

President and CEO Dr. Ashish Khandpur explained the new incentive plan is customized to reward business units based on their specific strategic goals, such as growth or cash generation. SVP and CFO Jamie Beggs provided a 2025 free cash flow forecast of $180-$200 million, supported by earnings growth and insurance proceeds. She also guided for CapEx of approximately $120 million.

Kristen Owen asked for a breakdown of growth drivers, seeking to understand the split between commercial execution (share gains) and innovation (new products). She also questioned the future of the underperforming Fiber-Line telecom business within Avient's portfolio, given its persistent weakness and minimal synergies.

Answer

President and CEO Dr. Ashish Khandpur estimated that growth from new initiatives is split roughly 50/50 between new business development in high-growth areas and market share gains from commercial execution. Regarding Fiber-Line, he acknowledged its weakness, especially in Europe due to subsidized Chinese competition, and noted that while it remains in the portfolio, the company's future strategic focus will be on less volatile businesses.

Kristen Owen of Oppenheimer & Co. Inc. requested more detail on the production hour cadence for the second half of the year and the corresponding regional margin outlook, and also asked about the drivers behind resilient parts sales.

Answer

SVP & CFO Damon Audia provided a detailed H2 production outlook, with North America remaining down over 50% and Europe's results varying by quarter due to 2024 comps. He projected North American operating losses could be in the 10-11% range. Chairman, President & CEO Eric Hansotia added that the 'Farmer Core' strategy, including e-commerce and mobile service, is a key catalyst for parts growth.

Kristen Owen of Oppenheimer & Co. Inc. sought clarification on the full-year guidance, questioning why it was maintained despite a Q1 beat and improved FX and pricing outlooks. She also asked about future capital allocation, particularly share buybacks, following changes with shareholder TAFE.

Answer

CFO Damon Audia provided an EPS bridge, explaining that the $0.40 Q1 beat and a $0.40 FX benefit were offset by a $0.30 headwind from weaker industry outlooks and another $0.30 headwind from the net impact of tariffs. CEO Eric Hansotia stated that discussions with TAFE are progressing well, the TAFE-held board seat is now vacant, and the company is actively working to enable share buybacks in response to investor interest.

Kristen Owen of Oppenheimer & Co. Inc. followed up on Europe's margin recovery, asking for an update on the reorganization of its key dealer, BayWa, and any other contributing factors.

Answer

CFO Damon Audia reported that BayWa's restructuring is progressing well and the partnership remains strong, though BayWa is currently cautious about taking on new stock to preserve cash. He also noted that benefits from AGCO's own European cost-saving initiatives are expected to materialize more significantly in the second half of 2025.

Kristen Owen asked for details on the pricing environment in Europe and how it aligns with the company's market share gains. She also sought to quantify the impact of the Grain & Protein business divestiture on AGCO's revised full-year top-line and bottom-line guidance.

Answer

Damon Audia, Senior Vice President & CFO, clarified that European pricing was modestly negative due to promotional pricing on the Fendt 700 Gen 6 model during its transition to the new Gen 7. Regarding the divestiture, he stated it accounted for a $200 million reduction in the sales outlook and about $0.10 of the EPS guide-down, with a de minimis effect on the full-year operating margin percentage.

Kristen Owen questioned the updated 2025 guidance, particularly the new expectation of no EBITDA growth, seeking clarity on the magnitude of the Q2 impact. She also asked about the drivers of the January debottlenecking and the performance of the off-patent Crop Care business.

Answer

CEO Ruy Cunha explained that the guidance change is primarily due to the timing of inventory deliveries for the soy crop, which impacted the second quarter. He noted that farmer sentiment is improving with better crop prospects and a favorable FX rate, which also improves the mood of input suppliers. Cunha attributed the strength in the off-patent business to both a strong product registration pipeline at Perterra and better integration with Lavoro's retail channel, highlighting its significant growth potential.

Kristen Owen asked for clarification on the updated 2025 guidance, questioning why Lavoro no longer expects EBITDA growth despite positive market sentiment. She sought to understand the magnitude of the Q2 impact, the drivers behind January's supply debottlenecking, and the source of strength in the off-patent Crop Care business.

Answer

CEO Ruy Cunha explained that the revised guidance stems from inventory delays impacting Q2 soy crop deliveries, not a change in market fundamentals. He noted that farmer sentiment is improving due to better income prospects and favorable currency exchange, which should also improve supplier mood. Cunha attributed the Crop Care segment's strength to both a robust pipeline of new product registrations at its subsidiary Perterra and enhanced integration with Lavoro's retail channel.

Kristen Owen inquired about the expected cadence of Lavoro's fiscal 2025 guidance, the state of channel inventories, and the potential impact of a competitor's bankruptcy. She also asked for a breakdown of the drivers for the following year's EBITDA growth, particularly the contribution from operational cost savings.

Answer

CFO Julian Del Val Neto stated that the fiscal year's seasonality is expected to be broadly similar to the previous year. CEO Ruy Cunha added that input price trends are stabilizing and channel inventories are mostly normalized, creating potential opportunities. Regarding EBITDA, Ruy Cunha clarified that the primary driver for recovery is expected to be margin improvement, with footprint optimization through store consolidation serving as a secondary lever for profitability.

Kristen Owen of Oppenheimer & Co. Inc. inquired about the expected cadence of Lavoro's fiscal 2025 guidance, current channel inventory levels, the potential impact of a competitor's bankruptcy, and how cost savings would contribute to the EBITDA forecast.

Answer

CFO Julian Del Val Neto stated that the seasonality for fiscal 2025 is expected to be broadly similar to the previous year. CEO Ruy Cunha added that channel inventory is mostly normalized and input prices are stabilizing, which could present an opportunity. Cunha clarified that the majority of the anticipated EBITDA recovery in fiscal 2025 will be driven by margin improvements, with footprint optimization serving as a secondary lever for cost savings.

Kristen Owen questioned the revised full-year 2024 guidance, asking about the swing factors contributing to the wide revenue range so late in the quarter and whether revenue shifting from Q4 would be recognized in Q1 2025.

Answer

CEO Ruy Cunha explained that the primary uncertainty is the pace of shipments, which depends on farmer behavior and their willingness to accept products for the next season. He noted that Lavoro has sufficient order bookings to meet the high end of the guidance. Cunha also confirmed that the revenue being pushed out of Q4 is expected to be recognized in Q1 of fiscal year 2025.

Kristen Owen of Oppenheimer & Co. Inc. questioned the wide range in the revised full-year 2024 guidance, asking for the key swing factors that would determine the final results, given the fiscal year is nearing its end. She also sought clarity on whether revenue shifting from Q4 would be recognized in Q1 of the next fiscal year.

Answer

CEO Ruy Cunha explained that the primary uncertainty is the pace of shipments, which depends on farmers' willingness to accept product deliveries for the next season. He confirmed they have sufficient order bookings to reach the high end of the guidance. Cunha also noted that credit procedures and collateral documentation are a factor. He affirmed that the delayed revenue is a timing issue and is expected to be recognized in the first quarter of fiscal 2025.

Inquired about key business milestones for the next 12-18 months in the absence of revenue guidance, the financial structure of new strategic partnerships, and the expected run-rate for operating expenses during the business model transition.

Answer

Executives explained that key milestones will be the announcement and execution of strategic partnerships and licensing deals. These deals can vary, sometimes including upfront fees, but are primarily focused on offtake agreements. The main constraint is the 2-year seed bulking process before broad-acre adoption in 2027. The run-rate for cash OpEx and CapEx is expected to be $55M-$60M, with a goal of reducing cash burn over time as the new model is implemented.