Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q2 2018 Earnings Presentation
39 slides from Cnh Industrial's earnings presentation, Jul 26, 2018
Slide 1: Q2 & H1 2018 Results Review
Q2 & H1 2018 Results Review July 26, 2018 Exhibit 99.3
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures All statements other than statements of historical fact contained in this presentation including statements regarding our competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, inco
Slide 3: Q2 2018 Highlights
Q2 2018 | Highlights Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Additionally: 2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standards for revenue recognition (ASC 606) and retirement benef
Slide 4: Q2 2018 Industry and Company unit performances
Q2 2018 | Industry and Company unit performances Worldwide Tractors and Combines industry up 9% vs. last year Deliveries were up 18% in Tractors and 26% in Combines on a worldwide basis Production up 9% vs. last year, flat to retail on worldwide basis, with NAFTA row crop overproduction vs. retail a
Slide 5: FY 2018E Industry outlook
FY 2018E | Industry outlook NOTE: Total Industry Volume FY 2018E vs. FY 2017 reflecting aggregate for key markets where Company competes Trucks >3.5t AG Tractors Combines 0-140 HP Flat - 5% (5%) - (10%) Flat - 5% ~5% 140+ HP ~5% CE Light Heavy ~10% ~5% Flat - 5% ~10% NAFTA EMEA LATAM APAC ~10% 5% -
Slide 6: Q2 2018 Product & Manufacturing
Q2 2018 | Product & Manufacturing New Engine New Engine New Engine New product launches and continued cost savings measures help solidify 2018 guidance CASE Construction Equipment The G-Series Waste Handler wheel loader range now includes four models: the existing 621G and 721G, and the new 821G and
Slide 7: Q2 2018 Financial Summary
Q2 2018 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Q2 2018 Q2 2017 Δ U.S. GAAP Revenues ($mn) 8,045 7,003 14.9% Net Sales | Industrial Activities ($mn) 7,579 6,525 16.2% Net Income ($mn) 408 236 72.9% Diluted EPS ($) 0.29 0.17 0.12 Non – GAAP (1) Adjusted E
Slide 8: Q2 2018 Industrial Activities Net Sales
Q2 2018 | Industrial Activities Net Sales Net Sales split (1) BY REGION BY SEGMENT NAFTA EMEA LATAM APAC AG CE CV PT (1) Note: Net Sales: Excluding Other Activities, Unallocated Items & Adjustment & Eliminations BY CURRENCY EUR 45% USD 27% BRL 6% CAD 4% GBP 2% AUD 3% OTHER 13% Note: Numbers may not
Slide 9: Industrial Activities Adj. EBITDA & Adj. EBIT walk
Q2 2018 | Industrial Activities Adj. EBITDA & Adj. EBIT walk Non-GAAP measures (definition and reconciliation in appendix) 650 254 396 135 26 20 11 (17) 571 272 843 Adj. EBITDA D&A Adj EBIT AG CE CV PT ELIM & OTHER (*) Adj EBIT D&A Adj EBITDA Q2 2017 Q2 2018 CHANGE IN ADJUSTED EBIT 175 44.2% 10.0% 6
Slide 10: Cash Flow | Change in Net Industrial Debt
Cash Flow | Change in Net Industrial Debt ($mn) (1,923) 843 (128) 240 (145) (97) (32) (281) 232 (1,291) Mar 31, 2018 IA | ADJ EBITDA CASH INTEREST AND TAXES CHANGE IN WORKING CAPITAL CHANGE IN PROVISIONS & OTHERS (1) PP&E CAPEX (2) OTHER CHANGES DIVIDENDS & EQUITY CHANGES (3) FX & OTHER (4) Jun 30,
Slide 11: Financial Services
Financial Services (*) Including unconsolidated JVs Managed Portfolio (*) & Retail Originations (*) $25.6bn Q2 ’18 retail originations at $2.6bn, relatively flat compared to June 30, 2017 Managed portfolio at $25.9bn, up $0.3bn compared to June 30, 2017 (up $0.8bn on a constant currency basis) $25.9
Slide 12: AG | Financial Results
AG | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC TRACTORS COMBINES OTHERS 2,766 3,312 Change vs. prior year Change vs. prior year 12.2% 9.4% 12.0% 14.3% Favorable volume and mix primarily in NAFTA and EMEA, sustained net price realization (including reduction in intere
Slide 13: CE | Financial Results
CE | Financial Results Adj. EBITDA & Adj. EBIT walk Net Sales ($mn) NAFTA EMEA LATAM APAC LIGHT HEAVY OTHERS n.m. 650 799 Change vs. prior year Change vs. prior year 3.5% 1.1% 4.1% 6.0% Higher volume, favorable product mix, positive net price realization and positive industrial absorption Raw materi
Slide 14: CV | Financial Results
CV | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC n.m. TRUCKS BUSES OTHERS (1) 2,598 2,889 Change vs. prior year Change vs. prior year 7.8% 2.8% 3.2% 8.3% Favorable volume and mix primarily in buses, and positive net price realization in EMEA and LATAM in trucks Increas
Slide 15: PT | Financial Results
PT | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC ENGINES TRANSM. AXLES 128 31 97 3 5 (4) (2) 9 108 33 141 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX | PRICING NET PROD COST SG&A R&D FX | OTHER Adj. EBIT D&A Adj. EBITDA Q2 2017 Q2 2018 Change vs. prior year Change vs. prior
Slide 16: FY 2018E US GAAP Financial Targets
FY 2018E US GAAP Financial Targets
Slide 17: FY 2018E US GAAP Financial Targets
FY 2018E | US GAAP Financial Targets (1) 2018 guidance does not include any impacts deriving from the gain resulting from the modification of the healthcare plan in the U.S. previously mentioned and anticipated on April 16, 2018 as this gain has been considered non-recurring and therefore treated as
Slide 18: Appendix
Appendix
Slide 19: H1 2018 Financial Summary
H1 2018 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) H1 2018 H1 2017 Δ U.S. GAAP Revenues ($mn) 14,818 12,788 15.9% Net Sales | Industrial Activities ($mn) 13,879 11,815 17.5% Net Income ($mn) 610 282 116% Diluted EPS ($) 0.43 0.20 0.23 Non – GAAP (1) Adjuste
Slide 20: Industrial Activities Net Sales split
Industrial Activities | Net Sales split Agricultural Equipment Q2 2018 | Split Chg. vs. Q2 ‘17 Construction Equipment Q2 2018 | Split Chg. vs. Q2 ‘17 By region: By region: NAFTA 32% 21% NAFTA 50% 16% EMEA 42% 24% EMEA 20% 21% LATAM 11% 1% LATAM 12% 35% APAC 15% 20% APAC 18% 39% By product: By produc
Slide 21: Reconciliation of Net Income to Adjusted EBITDA by Segment (Q2 2018)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” Q2 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) 306
Slide 22: Reconciliation of Net Income to Adjusted EBITDA by Segment (Q2 2017)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) Q2 2017 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (
Slide 23: Reconciliation of Net Income to Adjusted EBITDA by Segment (H1 2018)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” H1 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) 405
Slide 24: Reconciliation of Net Income to Adjusted EBITDA by Segment (H1 2017)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) H1 2017 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (
Slide 25: Reconciliation of Net Income to Adjusted EBITDA by Segment (Q3 2017)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) Q3 2017 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (
Slide 26: Reconciliation of Net Income to Adjusted EBITDA by Segment (Q4 2017)
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) Q4 2017 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (
Slide 27: Reconciliation of Adj. net income and Adj. income tax
Q2 and H1 2018 Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP H1 2018 H1 2017 Q2 2018 Q2 2017 610 282 Net income (loss) 408 236 (12) 41 Adjustments impacting Income (loss) b
Slide 28: Adjustments impacting income before tax and income tax
Q2 and H1 2018 H1 2018 H1 2017 Q2 2018 Q2 2017 (a) Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates 8 24 Restructuring expenses 5 12 - 17 Cost of repurchase/early redemption of Notes - 17 (20) - Pre-Tax gain related to
Slide 29: Capex
Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q2 2018 Q2 2017 Investments in property, plant and equipment, and intangible assets (1) (97) (91) Breakdown by Category NEW PRODUCT & TECHNOLOGY 46% 33% MAINTENANCE & OTHER 47% 56% INDUSTRIAL CAPACITY EX
Slide 30: Reconciliation to Operating Cash Flow (US GAAP)
Reconciliation to Operating Cash Flow (US GAAP) (*) Not included in Net Industrial Debt definition Q2 2018 Q2 2017 H1 2018 H1 2017 Net Cash provided by (used in) Operating Activities 947 781 393 522 Change in Derivatives hedging debt (*) 1 (2) (3) (7) Expenditures on Buyback and Op Lease Assets (138
Slide 31: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 06/30/2018 2 Of which $0.7bn Restricted Cash Undrawn M/T unsecured Committed Lines Bank Debt Capital Market Cash Other Available Liquidity ($bn) Debt Maturity Schedule (1) ($bn) Available liquidity at June 30, 2018 was $8.4
Slide 32: Reconciliation of Total Debt to Net Debt (US GAAP)
Reconciliation of Total Debt to Net Debt (US GAAP) Jun 30, 2018 Dec 31, 2017 Jun 30, 2018 Dec 31, 2017 Jun 30, 2018 Dec 31, 2017 Third party debt (24,353) (25,895) (5,436) (6,461) (18,917) (19,434) Intersegment notes payable - - (1,547) (982) (1,676) (1,641) Total (Debt) (1) (24,353) (25,895) (6,983
Slide 33: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt Jun 30, 2018 Dec 31, 2017 Total (Debt) (1) (24,353) (25,895) Financial Services Third Party Debt 18,917 19,434 Intersegment Note Payables (1,547) (982) Intersegment Note Receivables 1,676 1,641 Cash and cash equivalents 4,026 4,901 Restricted cash - - Derivativ
Slide 34: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding Jun 30, 2018 6M 2018 2019 2020 2021 2022 Beyond (4.5) Bank Debt (1.6) (0.9) (1.3) (0.3) (0.2) (0.2) (8.0) Capital Market (0.4) (1.4) (0.7) (1.7) (1.2) (2.6) (0.2) Other Debt (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (12.7) Cash Portion of (Debt) Maturities (2
Slide 35: Total Equity – US GAAP to EU-IFRS Reconciliation
Total Equity – US GAAP to EU-IFRS | Reconciliation Jun 30, 2018 Dec 31, 2017 Total Equity in accordance with US GAAP 4,579 4,232 Development costs 2,388 2,477 Other adjustments (84) (112) Tax impact on adjustments (600) (645) Deferred tax assets and tax contingencies recognition 688 732 Total adjust
Slide 36: CV | Company performance | European Truck Industry
CV | Company performance | European Truck Industry (*) Europe: 27 countries reflecting key markets where the segment competes (excluding United Kingdom and Ireland for market share reporting purposes); (1) Company’s estimated market share in the European truck market (GVW ≥3.5 tons) Q2 2015 2016 201
Slide 37: Geographic Information
Geographic Information Certain financial and market information in this presentation has been presented by geographic area. CNH Industrial defines its geographic areas as NAFTA: United States, Canada and Mexico; EMEA: member countries of the European Union, European Free Trade Association, Ukraine,
Slide 38: 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 results and allow management and investors to a
Slide 39: Investor Relations Team
Investor Relations Team e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com Federico Donati – Head of Global Investor Relations ( +44 (207) 76 - 60386 ( +39 (011) 00 - 71929 Noah Weiss – Investor Relations North America ( +1 (630) 887 - 3745