Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — FY2015 Earnings Presentation
44 slides from Cnh Industrial's earnings presentation, Jan 29, 2016
Slide 1: Q4 & FY 2015 Results Review
Q4 & FY 2015 Results Review January 29th, 2016 “Great Results In Difficult Markets” Exhibit 99.2
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures January 29th, 2016 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 resp
Slide 3: Q4 2015 Executive Summary
Industrial Activities net sales at $6.9bn down 3.6% on a constant currency basis vs. Q4 2014 Operating profit of Industrial Activities at $563mn up $236mn (or 63%) on a constant currency basis vs. Q4 2014; operating margin at 8.2% up 3.5 p.p. Highest Agricultural Equipment margin for the quarter of
Slide 4: Financial Highlights
Financial Highlights
Slide 5: Q4 & FY 2015 Financial Highlights
Q4 & FY 2015 Financial Highlights January 29th, 2016 Net Sales Industrial Activities ($/bn) Operating Profit Industrial Activities ($/bn) Net Industrial Debt ($/bn) Q4 8.0 6.9 FY 24.7 31.2 Net Sales at $6.9bn, down 3.6% on a constant currency basis (down 14.3% as reported) FY 2015 Net Sales at $24.7
Slide 6: Q4 2015 Industrial Activities Net Sales Composition & by Segment
3,354 800 3,403 988 3,313 650 3,274 1,044 2,846 609 2,982 912 6,869 7,730 (288) (861) Agricultural Equipment Commercial Vehicles Powertrain Construction Equipment (3.6%) (10.7%) Q4 2015 Industrial Activities (Net Sales Composition & by Segment) 8,018 Net Sales Composition* ($Mn) Net Sales By Segment
Slide 7: Q4 2015 Industrial Activities Operating Profit Composition & by Segment
Q4 2015 Industrial Activities (Operating Profit Composition & by Segment) Operating Profit Composition ($Mn) Operating Profit By Segment ($Mn) Operating Profit at $563mn with margin at 8.2%, up 3.5 p.p. from Q4 2014 11.7% 3.0% 5.4% 6.8% 8.2% Q4 2014 Q4 2015 7.1% 1.1% 3.0% 6.7% 4.7% Industrial Activi
Slide 8: Q4 2015 From operating profit to net income
Q4 2015 From operating profit to net income ($mn) Q4 2015 Q4 2014 Δ Industrial Activities Operating profit 563 376 187 Financial Services Operating profit 118 147 (29) Elimination & Other (85) (88) 3 Operating Profit 596 435 161 Restructuring expenses (32) (86) 54 Interest expenses of Industrial Act
Slide 9: Q4 & FY 2015 Cash Flow – Change in Net Industrial Debt
Q4 & FY 2015 Cash Flow – Change in Net Industrial Debt January 29th, 2016 Net Industrial Cash Flow 1,757 Change in Net Debt 1,817 Sep 30, 2015 Net Income D&A Change in Funds & Others Change in WC Tangible & Intangible Capex Change in Investment, Scope & Other Capital Increase, Dividends & Equity tra
Slide 10: Cash Flow - Change in WC and Agricultural Equipment Inventory
Cash Flow - Change in WC and focus on Agricultural Equipment Wholegoods Inventory Change in Working Capital (*) Channel Inventory: Company & Dealer Inventories ($/mn) Note: Only change in company inventory will impact industrial cash flow -29% -16% 1,554 January 29th, 2016 Q4 & FY 2015 Q4 470 (US GA
Slide 11: Q4 & FY 2015 Industrial Activities - Capex breakdown
Q4 & FY 2015 Industrial Activities - Capex breakdown By Category By Segment 1,005 -33% Delta % Q4 ’15 vs. Q4 ‘14 653 Total Capex ($mn) 279 136 150 88 417 246 200 142 Q4 Q3 Q2 Q1 Q4 2014 Q4 2015 Q4 2014 Q4 2015 New Product & Technology Maintenance & Other Industrial Capacity Expansion & LT Investment
Slide 12: Q4 & FY 2015 Financial Services performance
Q4 & FY 2015 Financial Services performance Net Income ($mn) Delta % Q4 ’15 vs. Q4 ‘14 Net income was $91mn, down $7mn compared to Q4 2014 Reduced net interest margins and the negative impact of currency translation, partially offset by lower income taxes FY ’15 Profitability ratios: Gross Margin /
Slide 13: Q4 2015 Liquidity & Debt Maturity
Q4 2015 Liquidity & Debt Maturity (December 31st, 2015) Available Liquidity ($bn) Debt Maturity Schedule1 ($bn) 1 Represents cash portion of debt maturities as of 12/31/2015 2 Of which $0.9bn ABS related & Restricted Cash As of 12/31/2015 2016 2017 2018 2019 Beyond 2020 Undrawn M/T Committed Lines B
Slide 14: Industrial Activities Overview
Industrial Activities Overview
Slide 15: Agricultural Equipment Q4 2015 Financial Results
Agricultural Equipment Q4 2015 Financial Results 241 (101) 120 29 27 44 (12) 348 7.1% 11.7% Operating Profit at $348mn, up $107mn vs. last year with margin at 11.7% up 4.6 p.p., best Agricultural Equipment margin for the quarter compared to major OEMs in the space Net price realization Volume & Mix
Slide 16: Agricultural Equipment Inventory management
Agricultural Equipment Inventory management (units of equipment) – Industry units (*) Excluding Joint Ventures / Source: CNH Industrial Internal Data For Q4 2015 For FY 2015 0-40 HP 10% 6% 40-140 HP (14%) (3%) 140+ HP (34%) (31%) NAFTA (6%) (2%) EMEA (2%) (7%) LATAM (37%) (27%) APAC (2%) (9%) Worldw
Slide 17: Agricultural Equipment Management Actions & Industry drivers
Agricultural Equipment Management Actions & Industry drivers NAFTA Row Crop * Production (Units) (50%) NAFTA row crop production down 50% vs. last year Q4 NAFTA row crop production down 27% vs. Q4 ‘14 January 29th, 2016 AG SG&A Expenses ($ Mn) (22%) SG&A down 22% vs. last year Q4 down 27% vs. Q4 201
Slide 18: Construction Equipment Q4 2015 Financial Results
Construction Equipment Q4 2015 Financial Results Net sales were $609mn down 18.7% on a constant currency basis (down 23.9% as reported) 9 1.1% (42) 22 17 4 5 3 18 Operating Profit at $18mn vs. $9mn last year, margin at 3.0% up 1.9 p.p. Volume &Mix (primarily in NAFTA rental channel and Brazil) 3.0%
Slide 19: Construction Equipment Inventory management
Construction Equipment Inventory management (units of equipment) – Industry units Note: As of Q2 2014, industry volume data for Heavy Construction Equipment includes compaction equipment, which historically was not in the Light or Heavy Equipment definitions. Further, industry volume data for Heavy
Slide 20: Construction Equipment Management Actions – Efficiency Program
Construction Equipment Management Actions – Efficiency Program re‐tooling of industrial footprint January 29th, 2016 Brand re-positioning: dealer consolidation in progress with major countries completed Excavator strategy: Production started in Q4 2015 in San Mauro, Italy In Brazil product developme
Slide 21: Commercial Vehicles Q4 2015 Financial Results
Commercial Vehicles Q4 2015 Financial Results Operating Profit at $155mn up $80mn at constant currency vs. last year, margin at 5.4% Net Sales at $2.8bn, down 1.2% on a constant currency basis (down 15.1% as reported) EMEA Volume (Trucks and Buses) Specialty Vehicles and APAC Buses 100 1 49 6 56 (18
Slide 22: Commercial Vehicles Inventory management
Commercial Vehicles Inventory management (units of equipment) – Industry units Commercial Vehicles (All Equipment) Fourth quarter underproduction vs. retail at 11% Inventory FMS (forward month of supply) flat vs. last year * Reflects aggregate for key markets where the Company competes: EMEA: 28 mem
Slide 23: Commercial Vehicles Deliveries and Orders & Market share
Commercial Vehicles Deliveries and Orders & Market share European Truck market share at 11.6% up 0.5 p.p. vs. Q4 2014 EU28 – Q4 ’15 Market Share (%) Light Heavy 11.5% 27.4% 8.7% Light at 11.5% up 0.5 p.p. vs. Q4 2014 (FY ‘15 up 0.6 p.p. to 11.3%) Medium at 27.4% down 3.3 p.p. vs. Q4 2014 (FY ‘15 up
Slide 24: Commercial Vehicles Management Actions – Efficiency Program
Commercial Vehicles Management Actions – Efficiency Program New Daily International Van of the Year 2015 Stralis Hi-Way International Truck of the Year 2013 Eurocargo International Truck of the Year 2016 Magelys Coach of the Year 2016 January 29th, 2016 Other Actions Iveco triumphs in 2016 Dakar Ral
Slide 25: Powertrain Q4 2015 Financial Results
Powertrain Q4 2015 Financial Results Q4 2015 third party Net sales at 49% vs. 48% in Q4 2014 Key Highlights Net Sales by Region & Product ($) Net sales were $912mn, up 5.6% on a constant currency basis compared to 2014 Positive mix on engine sales (primarily on-road) and increased unit volume of tra
Slide 26: Powertrain Units Sold
Powertrain Units Sold (% change y-o-y) January 29th, 2016 ENGINES TRANSMISSIONS AXLES Engines sold to third party at 61% vs. 54% in Q4 2014 Key Highlights Units sold by business line Engines down 1.4% to 130.7 k units (CV 28%, AG 9%, CE 2% and 61% to external customers); third party sales up 11.6% c
Slide 27: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets
Slide 28: FY 2016E Industry Units Outlook
FY 2016E Industry Units Outlook January 29th, 2016 1 Reflects aggregate for key markets where Group competes LATAM APAC NAFTA EMEA Agricultural Equipment Tractors Combines 0-140 HP Flat – (5%) 140+ HP (15%) - (20%) Industry (5%) (15%) - (20%) Construction Equipment Light Heavy Industry Flat – (5%) F
Slide 29: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets Net sales of Industrial Activities between $23bn and $24bn, with an operating margin of Industrial Activities between 5.2% and 5.8%; Net industrial debt at the end of 2016 between $1.5bn and $1.8bn January 29th, 2016 Dividends Share Buy-Back Program Recommending a
Slide 30: 2016 Financial Calendar
2016 Financial Calendar
Slide 31: 2016 Financial Calendar
2016 Financial Calendar February March April May June July August September October December November April 29 Q1 Results Early March 20F and Annual Report filing October 28 Q3 Results July 26 Q2 & H1 Results April 15 Annual General Meeting January 29th, 2016
Slide 32: Appendix
Appendix
Slide 33: Q4 2015 Results highlights (IFRS & US GAAP)
Q4 2015 Results highlights (IFRS $ & US GAAP $) – delta with previous year ($mn) REVENUES Trading Profit Operating Profit MARGIN (IFRS) Δ (US GAAP) Δ (IFRS) Δ (US GAAP) Δ (IFRS) (US GAAP) Agricultural Equipment 2,982 (421) 2,982 (421) 268 30 348 107 9.0% 11.7% Construction Equipment 609 (191) 609 (1
Slide 34: FY 2015 Results highlights (IFRS & US GAAP)
FY 2015 Results highlights (IFRS $ & US GAAP $) – delta with previous year ($mn) REVENUES Trading Profit Operating Profit MARGIN (IFRS) Δ (US GAAP) Δ (IFRS) Δ (US GAAP) Δ (IFRS) (US GAAP) Agricultural Equipment 11,025 (4,179) 11,025 (4,179) 702 (987) 952 (818) 6.4% 8.6% Construction Equipment 2,542
Slide 35: FY 2015 From operating profit to net income
FY 2015 From operating profit to net income ($mn) FY 2015 FY 2014 Δ Industrial Activities Operating profit 1,432 1,988 (556) Financial Services Operating profit 515 554 (39) Elimination & Other (312) (343) 31 Operating Profit 1,635 2,199 (564) Restructuring expenses (84) (184) 100 Interest expenses
Slide 36: Q4 & FY 2015 Net Income to Net Income and basic EPS before restructuring
Q4 & FY 2015 Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) Fourth Quarter Full Year 2015 2014 2015 2014 Net Income / (Loss) 231 87 248 708 Restructuring expenses, net of tax 31 80 76 168 Other exceptional items, net of tax - - 150 (1) 64 Net Inc
Slide 37: Operating Profit US GAAP to Trading Profit IFRS Reconciliation
Q4 & FY 2015 Operating Profit US GAAP to Trading Profit IFRS - Reconciliation The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading Profit under IFRS: Fourth Quarter Full Year 2015 % of Net Sales 2014 % of Net Sales 2015 % of Net Sales 2014 % of Net Sales US GAAP - Ind
Slide 38: Net Income US GAAP to Profit under IFRS Reconciliation
Q4 & FY 2015 Net Income / (Loss) US GAAP to Profit / (Loss) under IFRS - Reconciliation The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: Fourth Quarter Full Year 2015 EPS 2014 EPS 2015 EPS 2014 EPS Net Income / (Loss) attributable to CNH Industrial N.V. 231 0.17
Slide 39: Total Equity – US GAAP to IFRS Reconciliation
Dec. 31, 2015 Total Equity – US GAAP to IFRS Reconciliation Dec. 31, 2015 Dec. 31, 2014 Total Equity in accordance with US GAAP 4,843 4,961 (a) Development costs, net 2,536 2,819 (b) Goodwill and other intangible assets (113) (122) (c) Defined benefit plans - (6) (d) Restructuring provision (5) (12)
Slide 40: Q4 2015 Gross Debt - Breakdown
Q4 2015 Gross Debt - Breakdown September 30, 2015 December 31, 2015 Industrial Financial Services Industrial Financial Services 2.5 2.0 Bank Debt 2.0 2.4 5.0 3.9 Capital Market 5.0 3.7 0.2 0.1 Other Debt 0.2 0.1 7.7 5.9 Cash Maturities 7.2 6.1 0.0 10.6 ABS / Securitization 0.0 9.4 0.0 0.4 Warehouse
Slide 41: Q4 2015 Debt Maturity Schedule - Breakdown
Q4 2015 Debt Maturity Schedule - Breakdown Outstanding Dec. 31, 2015 2016 2017 2018 2019 2020 Beyond 4.4 Bank Debt 1.8 0.8 1.2 0.4 0.1 0.1 8.7 Capital Market 1.0 2.1 2.5 1.6 0.6 0.9 0.3 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 13.4 Cash Portion of Debt Maturities 2.9 2.9 3.8 2.0 0.8 1.1 (6.3) Cash & Marke
Slide 42: Geographic Information
Geographic Information Consistent with the organization structure, certain financial and market information in this presentation has been presented separately by geographic area. CNH Industrial defines its geographic areas as NAFTA: United States, Canada and Mexico LATAM: Central and South America,
Slide 43: Non-GAAP Financial Measures
Non-GAAP Financial Measures CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial believes that these non-GAAP financial measures provide useful and relevant information regarding its results and enhance the reader’s ability to assess CNH Indus
Slide 44: Investor Relations Team Contacts
Investor Relations Team Federico Donati – Head of Investor Relations ( +44 (207) 76 - 60386 ( +39 (011) 00 - 62756 Noah Weiss – Investor Relations North America ( +1 (630) 887 - 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com Contacts January 29th, 2016