Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q3 2016 Earnings Presentation
34 slides from Cnh Industrial's earnings presentation, Nov 1, 2016
Slide 1: Q3 & Sep YTD 2016 Results Review
Q3 & Sep YTD 2016 Results Review October 31st, 2016 Exhibit 99.2
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures October 31st, 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 respe
Slide 3: Q3 2016 Highlights
Q3 2016 Highlights October 31st, 2016 Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated Revenues at $5.7bn Down 1.7% vs. last year Net industrial debt (1) of $2.7bn 0.5bn increase compared to June 30, 2016 due to non-inventory related timing differences in product
Slide 4: Financial Highlights
Financial Highlights
Slide 5: Q3 2016 Financial Highlights
Q3 2016 Financial Highlights Q3 2016 Q3 2015 Δ Net Sales Ind. Activities ($mn) 5,461 5,549 -1.6% Net Sales change in Constant currency: -1.9% Operating Profit Ind. Activities ($mn) (1) 248 245 1.2% Operating Margin Ind. Activities 4.5% 4.4% 0.1 p.p. Net Income ($mn) 39 (128) 167 Diluted EPS ($) 0.03
Slide 6: Q3 2016 Net Sales Industrial Activities
Q3 2016 Net Sales Industrial Activities Net Sales Walk By Segment ($Mn) (*) (*) Note: Net Sales: Including Other Activities, Unallocated Items & Adjustment & Eliminations Net Sales By Currency (1) ($mn) Agricultural Equipment Commercial Vehicles Powertrain Construction Equipment (1) Note: Net Sales:
Slide 7: Q3 2016 Operating Profit and Adjusted Net Income Walk
Q3 2016 Operating Profit Industrial Activities and Adjusted Net Income Walk Adjusted Net Income Walk ($Mn) 38 2 11 68 3 (14) 1 3 24 (*) Excluding Loss on repurchase of note (**) Excluding Venezuelan re-measurement from last year (***) Excluding changes in tax impact on Adjustments to Net Income Octo
Slide 8: Q3 2016 Cash Flow – Change in Net Industrial Debt
Q3 2016 Cash Flow – Change in Net Industrial Debt Net Industrial Debt Walk (US GAAP, $/mn) Cash inflow Cash outflow Capex (*) (US GAAP, $/mn) (21%) Delta % Q3 ’16 vs. Q3 ‘15 By Category By Segment New Product & Technology Maintenance & Other Industrial Capacity Expansion & LT Investments AG CV PT CE
Slide 9: Q3 2016 Financial Services performance
Q3 2016 Financial Services performance October 31st, 2016 Net Income ($mn) Delta % Q3 ’16 vs. Q3 ‘15 Net income was $77mn, down $17mn compared to Q3 2015 Primarily due to the lower average portfolio and the reduction in interest spreads Q3 ’16 Profitability ratios: Gross Margin / Average Assets On-B
Slide 10: September 30, 2016 Liquidity & Debt Maturity
September 30, 2016 Liquidity & Debt Maturity Available Liquidity ($bn) Debt Maturity Schedule1 ($bn) 1 Represents cash portion of debt maturities as of 09/30/2016 2 Of which $0.7bn ABS related & Restricted Cash Undrawn M/T Committed Lines Bank Debt Capital Market Cash Other Company Available Liquidi
Slide 11: Q3 2016 Capital Market Transactions in the quarter
Q3 2016 Capital Market Transactions in the quarter Key Highlights August 18th – completed offering of $600mn in aggregate principal amount of 4.50% notes due 2023 September 2nd – announced final results of cash tender offer for guaranteed senior notes due 2017 issued by CNH Industrial’s subsidiary C
Slide 12: Industrial Activities Overview
Industrial Activities Overview
Slide 13: Agricultural Equipment Q3 2016 Financial Results
Agricultural Equipment Q3 2016 Financial Results October 31st, 2016 Net Sales by Region & Product ($) Net sales were $2.4bn, down 3.0% compared to Q3 2015, (down 3.4% on a constant currency basis) Operating Profit Walk ($Mn) 18 5.6% 6.6% 137 (34) 15 29 10 (2) 155 NAFTA LATAM APAC EMEA Tractors Other
Slide 14: Agricultural Equipment Inventory management
Agricultural Equipment Inventory management (units of equipment) – Industry units October 31st, 2016 (*) Source: CNH Industrial Internal Data Industry Units Tractors Combines For Q3 2016 NAFTA ** (22%) EMEA 2% LATAM 15% APAC (1%) (**) Included in row crop sector definition Tractors Combines Worldwid
Slide 15: Construction Equipment Q3 2016 Financial Results
Construction Equipment Q3 2016 Financial Results Net Sales by Region & Product ($) Operating Profit Walk ($Mn) 37 6.3% 0.2% (13) (17) (4) 5 3 (10) 1 (36) Net sales were $595mn, up 0.7% vs. Q3 2015 (up 0.5% on a constant currency basis) NAFTA LATAM APAC EMEA October 31st, 2016 Light Other Heavy Marke
Slide 16: Construction Equipment Inventory management
Construction Equipment Inventory management (units of equipment) – Industry units October 31st, 2016 Note: As of Q2 2014, industry volume data for Heavy Construction Equipment includes compaction equipment, which historically was not in the Light or Heavy Equipment definitions. Further, industry vol
Slide 17: Commercial Vehicles Q3 2016 Financial Results
Commercial Vehicles Q3 2016 Financial Results Net Sales by Region & Product ($) Operating Profit Walk ($Mn) Net Sales at $2.1bn, down 3.4% vs. Q3 2015 (down 3.7% on a constant currency basis) 60 (70) 40 32 0 5 (3) 64 3.0% 2.7% Pricing for Trucks in EMEA and APAC Lower material cost and manufacturing
Slide 18: Commercial Vehicles Inventory management
Commercial Vehicles Inventory management (units of equipment) – Industry units Commercial Vehicles (All Equipment) * Reflects aggregate for key markets where the Company competes: EMEA: 27 of the member countries of the European Union; LATAM: Brazil, Argentina and Venezuela; APAC: Russia, Turkey, So
Slide 19: Powertrain Q3 2016 Financial Results
Powertrain Q3 2016 Financial Results Q3 2016 third party Net sales at 48% vs. 44% in Q3 2015 Net Sales & Operating Profit ($) Units Sold Q3 ’16 vs. Q3 ’15 Engines sold to third party at 58% vs. 54% in Q3 2015 Net sales were $850mn, up 6.3% vs. Q3 2015 (up 5.9% on a constant currency basis) Operating
Slide 20: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets
Slide 21: FY 2016E Industry Units Outlook
FY 2016E Industry Units Outlook October 31st, 2016 1 Reflects aggregate for key markets where Company competes Agricultural Equipment Flat (20%) - (25%) (15%) - (20%) Agricultural Equipment (10%) – (15%) Flat - 5% 0-140 HP 140+ HP Combines Combines Tractors Construction Equipment Flat (10%) - (15%)
Slide 22: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets October 31st, 2016 CNH Industrial is confirming its 2016 guidance as follows: •Net sales of Industrial Activities between $23 billion and $24 billion, with an operating margin of Industrial Activities between 5.2% and 5.8%; •Net industrial debt at the end of 2016 b
Slide 23: Appendix
Appendix
Slide 24: Growing Responsibly and Sustainably
CNH Industrial N.V. Growing Responsibly and Sustainably DJSI World – Machinery and Electrical Equipment Eligible companies:78 Admitted companies:11 CNH Industrial Industry Leader for 6th consecutive year CNH Industrial received the highest score in the principal areas of analysis in climate strategy
Slide 25: From Operating Profit to Net Income (Loss) under US GAAP
Q3 & Sep YTD 2016 From Operating Profit to Net Income (Loss) under US GAAP ($mn) Q3 2016 Q3 2015 Δ Sep YTD 2016 Sep YTD 2015 Δ Industrial Activities Operating profit 248 245 3 879 869 10 Financial Services Operating profit 114 128 (14) 363 397 (34) Elimination & Other (84) (85) 1 (244) (227) (17) Op
Slide 26: Reconciliation of Net Income / (Loss) to Adjusted Net Income
Q3 & Sep YTD 2016 Reconciliation of Net Income / (Loss) to Adjusted Net Income (US GAAP) Third Quarter Sep YTD 2016 2015 2016 2015 Net Income / (Loss) 39 (128) (345) 17 Restructuring expenses, net of tax 6 18 31 52 Venezuelan re-measurement - 150 - 150 EC Settlement - - 551 - Loss on repurchase of d
Slide 27: Net Income US GAAP to Profit under EU-IFRS Reconciliation
Q3 & Sep YTD 2016 Net Income / (Loss) US GAAP to Profit / (Loss) under EU-IFRS - Reconciliation October 31st, 2016 The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: Third Quarter Sep YTD 2016 EPS 2015 EPS 2016 EPS 2015 EPS Net Income / (Loss) attributable to CNH
Slide 28: Total Equity – US GAAP to EU-IFRS Reconciliation
September 30, 2016 Total Equity – US GAAP to EU-IFRS Reconciliation October 31st, 2016 Sep. 30, 2016 Dec. 31, 2015 Total Equity in accordance with US GAAP 4,465 4,843 (a) Development costs 2,517 2,536 (b) Goodwill and other intangible assets (108) (113) (c) Defined benefit plans (26) - (d) Restructu
Slide 29: Net Debt under US GAAP
September 30, 2016 Net Debt under US GAAP ($MN) October 31st, 2016 Consolidated Industrial Activities Financial Services Sep. 30, 2016 Dec. 31, 2015 (1) Sep. 30, 2016 Dec. 31, 2015 (1) Sep. 30, 2016 Dec. 31, 2015 (1) Third party debt 26,341 26,301 7,661 7,214 18,680 19,087 Intersegment notes payable
Slide 30: Q3 2016 Gross Debt – Breakdown
Q3 2016 Gross Debt – Breakdown June 30, 2016 September 30, 2016 Industrial Financial Services Industrial Financial Services 1.9 2.5 Bank Debt 1.9 2.6 5.4 4.1 Capital Market 5.6 4.1 0.1 0.1 Other Debt 0.1 0.1 7.5 6.6 Cash Maturities 7.7 6.8 0.0 9.9 ABS / Securitization 0.0 9.4 0.0 0.6 Warehouse Facil
Slide 31: Q3 2016 Debt Maturity Schedule - Breakdown
Q3 2016 Debt Maturity Schedule - Breakdown Outstanding September 30, 2016 3M 2016 2017 2018 2019 2020 Beyond 4.5 Bank Debt 0.4 1.5 1.3 0.8 0.3 0.2 9.7 Capital Market 0.5 1.7 2.6 1.7 0.6 2.6 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 14.4 Cash Portion of Debt Maturities 0.9 3.2 3.9 2.5 0.9 2.9 (5.9) Cash
Slide 32: 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 LATAM: Central and South America, and the Caribbean Islands APAC: Continental Asia (inclu
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 results and allow management and investors to a
Slide 34: Investor Relations Team
Investor Relations Team Federico Donati – Head of Investor Relations ( +44 (207) 76 - 60386 ( +39 (011) 00 - 71929 Noah Weiss – Investor Relations North America ( +1 (630) 887 - 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com Contacts October 31st, 2016