Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2022 Earnings Presentation
34 slides from Cnh Industrial's earnings presentation, May 3, 2022
Slide 1: Q1 2022 Results Review
Q1 2022 RESULTS REVIEW MAY 3, 2022 Q1 2022 Results Review | May 3, 2022
Slide 2: Safe Harbor Statement and Disclosures
SAFE HARBOR STATEMENT AND DISCLOSURES All statements other than statements of historical fact contained in this earning release, including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss
Slide 3: First Quarter 2022 Highlights
FIRST QUARTER 2022 HIGHLIGHTS Net sales up 13%, positive pricing and negative FX Continued supply chain/logistic challenges Plant inventories and seasonal buildup of finished goods drove negative FCF Ongoing support for Ukrainian dealers and customers Halted Russia imports and production Guidance fo
Slide 4: Agriculture
AGRICULTURE $3.4B 13% $426M 12.6% net sales 1Q22 change net sales adj. EBIT1 adj. EBIT margin1 (@CC)* Cost offset by pricing Gross margin at 24.1%, up YoY and sequentially Increased R&D sustaining digital investments Take rates on Precision Ag continue to increase Order books up almost 40% YoY for t
Slide 5: Construction
CONSTRUCTION $803M 23% $32M 4.0% net sales 1Q22 change net sales adj. EBIT1 adj. EBIT margin1 (@CC*) Most profitable first quarter in more than a decade Market share increase in North America Order book up YoY for Heavy and Light and in all regions Case Construction celebrates 180th anniversary (*)
Slide 6: Precision Technology Update
PRECISION TECHNOLOGY UPDATE DIGITAL SERVICES AUTOMATION AUTONOMY In the last year we have unlocked significant value for customers In the last year we have unlocked significant value for customers 6 Q1 2022 Results Review | May 3, 2022
Slide 7: Strategic Priorities | In Focus
STRATEGIC PRIORITIES | IN FOCUS CUSTOMER BRAND OPERATIONAL INSPIRED AND DEALER EXCELLENCE INNOVATION STRENGTH 7 Q1 2022 Results Review | May 3, 2022
Slide 8: First Quarter 2022 Financial Highlights
FIRST QUARTER 2022 | FINANCIAL HIGHLIGHTS Industrial Activities Consolidated ($mn) Net Sales Adjusted Gross Adjusted Diluted INDUSTRIAL ACTIVITIES | Q1 2022 Margin(*) EPS(*) 4,180 +13% 22.2% +60 bps $0.28 +$0.02 3,694 21.6% $0.26 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Adjusted EBIT(*) Free
Slide 9: Industrial Activities Adj. EBIT Walk by Segment
FIRST QUARTER 2022 | INDUSTRIAL ACTIVITIES ADJ. EBIT(*) WALK 417 ($mn) 119 (401) 2 10.3% 10.6% (37) (57) (7) 393 429 Unallocated, Elim & Q1 2021 Volume & Mix Pricing Net Product Cost SG&A R&D FX | Other Q1 2022 Other Gross Adj. EBIT By Segment Margin Margin Ag 90 343 (323) (29) (56) 2 Ag 24.1% 12.6%
Slide 10: Financial Services
FULL YEAR 2021 | FINANCIAL SERVICES Net Income Profitability Ratios 3.7% ($mn) 3.2% 2.9% 2.5% 82 2.1% Q1 2022 1.6% Q1 2021 78 Gross Margin / Average Assets on Book ROA(**) Managed Portfolio(*) & Retail Originations(*) Delinquencies on Book (>30 Days) 10% Q1 ’22 retail originations at $2.1bn, up 8% $
Slide 11: Industrial Activities Change in Net Cash (Debt)
FIRST QUARTER 2022 | INDUSTRIAL ACTIVITIES CHANGE IN NET CASH (DEBT)(*) ($mn) Free cash flow(*) of Industrial Activities (1,059) 512 (1,126) (120) (2,086) Shares BB (20) Dividends (1) 120 (1,296) (99) (53) (3) (21) CHANGE IN CASH INTEREST CHANGE IN DIVIDENDS & Dec 31, 2021 IA | ADJ EBITDA AND TAXES
Slide 12: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Capex at $53mn up 47% from Q1 2021, R&D up 39% major increase in digital CREDIT RATING Obtained Moody’s upgrade in February and Fitch in January Support growth and ensure shareholder GROSS DEBT returns, while Gross Debt stable in Q1, cash absorption funde
Slide 13: Full Year 2022 Estimates | Industry Unit Performance
FULL YEAR 2022 ESTIMATES | INDUSTRY UNIT PERFORMANCE VS. FY’21 NORTH AMERICA EUROPE REST OF EMEA SOUTH AMERICA APAC 0-140 HP Tractors Flat Flat – 5% ~(10%) Flat – 5% (5%) – Flat 140+ Large Tractors ~15% Combines 10% Flat – 5% ~(40%) Flat – 5% Flat – 5% Light Flat – 5% (5%) – Flat ~(15%) ~10 - 15% (1
Slide 14: FY 2022E Guidance
FY 2022E | GUIDANCE INDUSTRIAL ACTIVITIES Net Sales(*) 10-14% Confirmed SG&A ≤ 7.5% Confirmed Free Cash Flow > $1.0B Confirmed R&D ~ $1.4B Confirmed CapEx (*) Net Sales outlook reflecting €/$ at 1.15 14 Q1 2022 Results Review | May 3, 2022
Slide 15: 2022 Focus and Priorities
2022 | FOCUS AND PRIORITIES Persistent supply chain and inflation challenges Labor negotiations ongoing; majority of operations unaffected Order books remain strong, sentiment above historical trend Inventory management a top priority, ours and our dealers Raven penetration / Precision Ag investment
Slide 16: Appendix
APPENDIX Q1 2022 Results Review | May 3, 2022
Slide 17: Unit Performance vs. Q1 2021
FIRST QUARTER 2022 | UNIT PERFORMANCE VS. Q1 2021 NORTH AMERICA EUROPE REST OF EMEA SOUTH AMERICA APAC 0-140 HP Tractors (8%) (2%) (14%) 11% (14%) 140+ Large Tractors 9% Industry Combines (22%) 13% ~Flat (9%) 10% Light 1% 5% 11% 25% (32%) Heavy 15% 5% 26% 33% (35%) Order Book* Order Book* Order Book
Slide 18: First Quarter 2022 Financial Summary
FIRST QUARTER 2022 | FINANCIAL SUMMARY Q1 2022 Q1 2021 Δ U.S. GAAP Revenues ($mn) 4,645 4,096 13% Net Sales | Industrial Activities ($mn) 4,180 3,694 13% Net Income ($mn) 336 363 (27) Diluted EPS ($) 0.24 0.27 (0.03) Non – GAAP (1) Net Sales | Industrial Activities @CC(*) ($mn) 4,234 3,694 15% Adjus
Slide 19: Industrial Activities Net Sales
FIRST QUARTER 2022 | INDUSTRIAL ACTIVITIES NET SALES Industrial Activities (1) Activities (1) Ag AG CE CE Industrial $3,377mn $803mn $4,180mn +11% +13% @CC +22% +23% @CC +13% +15% @CC By Region By Region By Region As reported As reported As reported Q1 2022 Q1 2021 NA EMEA SA APAC NA EMEA SA APAC NA
Slide 20: Financials by Segment
FIRST QUARTER 2022 | FINANCIALS BY SEGMENT REVENUES ($mn) GROSS PROFIT ($mn) Adj. EBIT ($mn) Adj. EBIT Margin % Q1 22 Q1 21 Q1 22 Q1 21 Q1 22 Q1 21 Q1 22 Q1 21 AG 3,377 3,038 814 709 426 399 12.6% 13.1% CE 803 656 107 94 32 25 4.0% 3.8% E&O - - 8 (5) (29) (31) IA 4,180 3,694 929 798 429 393 10.3% 10
Slide 21: Net Sales and Adj EBIT Breakdown
FIRST QUARTER 2022 | NET SALES AND ADJ EBIT BREAKDOWN Net Sales Split Ag CE Q1 22 Q1 21 Q1 22 Q1 21 ($mn) NA 1,176 1,058 NA 394 280 EMEA 1,195 1,267 EMEA 202 171 SA 692 398 SA 133 89 APAC 314 315 APAC 74 116 Tractors 56% 56% Heavy 37% 46% Combines 21% 21% Light 57% 49% Others* 23% 23% Others 6% 5% I
Slide 22: Capex and R&D
FIRST QUARTER 2022 | CAPEX AND R&D Q1 Q1 2022 2021 Investments in property, plant and equipment, and intangible assets ($mn) 53 36 Breakdown by Category NEW PRODUCT & TECHNOLOGY 29% 49% MAINTENANCE & OTHER 47% 17% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 24% 34% Breakdown by Segment AGRICULTUR
Slide 23: Debt Maturity Schedule | Breakdown
DEBT MATURITY SCHEDULE | BREAKDOWN ($bn) Outstanding 9M 2023 2024 2025 2026 Beyond Mar 31, 2022 2022 2.6 Bank Debt 1.3 0.5 0.4 0.2 0.1 0.1 9.8 Capital Market 1.2 2.2 2.0 0.9 1.7 1.9 0.2 Other Debt 0.2 0.2 0.0 0.0 0.0 0.0 12.5 Cash Portion of Debt Maturities 2.6 2.7 2.4 1.0 1.8 2.0 of which Industria
Slide 24: Reconciliations
RECONCILIATIONS Q1 2022 Results Review | May 3, 2022
Slide 25: Reconciliation of Net Income to Adj. EBIT by Segment Q1 2022
RECONCILIATION OF NET INCOME (LOSS) TO ADJ. EBIT BY SEGMENT (US GAAP) Q1 2022 ($mn) Unallocated Industrial AG CE Items, Elim. & Activities Other Consolidated Net income 336 Less: Consolidated Income tax (expense) benefit (159) Consolidated Income before taxes 495 Less: Financial Services Financial S
Slide 26: Reconciliation of Net Income to Adj. EBIT by Segment Q1 2021
RECONCILIATION OF NET INCOME (LOSS) TO ADJ. EBIT BY SEGMENT (US GAAP) Q1 2021 ($mn) Unallocated Industrial AG CE Items, Elim. & Activities Other Consolidated Net income (loss) 425 Less: Consolidated Net Income (loss) of Discontinued Operations 62 Consolidated Net Income (loss) of Continuing Operatio
Slide 27: Reconciliation of Total Debt to Net Debt
RECONCILIATION OF TOTAL DEBT TO NET DEBT (US GAAP) Consolidated Industrial Activities Financial Services ($mn) March 31, December 31, March 31, December 31, March 31, December 31, 2022 2021 2022 2021 2022 2021 Third party debt (21,335) (20,897) (5,228) (5,335) (16,107) (15,562) Intersegment notes pa
Slide 28: Reconciliation of Cash to Available Liquidity
FIRST QUARTER 2022 Reconciliation of Cash and cash equivalents to Available liquidity under U.S.-GAAP ($mn) March 31, 2022 December 31, 2021 Cash and cash equivalent 3,219 5,044 Restricted cash 842 801 Undrawn committed facilities 5,087 5,177 Receivables from Iveco Group N.V. 297 3,484 Payables to I
Slide 29: Reconciliation to Free Cash Flow of Industrial Activities
FIRST QUARTER 2022 Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under U.S. GAAP ($mn) Q1 2022 Q1 2021 Net cash provided by (used in) Operating Activities (887) 241 Less: Cash flows from Operating Activities of Financial Services net
Slide 30: Reconciliation of Adj. Net Income and Adj. Diluted EPS
FIRST QUARTER 2022 Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP ($mn) Q1 2022 Q1 2021 Net income (loss) 336 363 Adjustments impacting Income (loss) before
Slide 31: Reconciliation of Adj. Net Income (continued)
FIRST QUARTER 2022 Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP ($mn) Q1 2022 Q1 2021 (a) Adjustments impacting Income (loss) before income tax (expense) b
Slide 32: Geographic Information
GEOGRAPHIC INFORMATION The composition of our regions part of the geographic information is as follow: ▪ North America: United States, Canada, Mexico and Puerto Rico, previously included in South America ▪ Europe, Middle East, and Africa (previously Europe): member countries of the European Union, E
Slide 33: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ abil
Slide 34: Investor Relations Contact
INVESTOR RELATIONS CONTACT Noah Weiss | Head of Investor Relations +1.773.896.5242 | noah.weiss@cnhind.com 34