Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Investor Presentation (2023)
45 slides from Cnh Industrial's investor presentation, 2023
Slide 1: 2023 Investor Presentation
Breaking 2023 Investor Presentation a I N D U s T R I A L Innovation Sustainability Productivity
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 competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) p
Slide 3: Contents
CONTENTS 1. CNH Industrial At a Glance [4] 2. Industry Fundamentals [18] 3. Customer Inspired Innovation [23] 4. Precision Agriculture [29] 5. Sustainability [33] 6. Margin Improvement [38] Appendix [42] 3 2023 Investor Presentation
Slide 4: CNH At a Glance
CNH At a Glance 4 2023 Investor Presentation
Slide 5: CNH at a Glance
CNH AT A GLANCE CNH Industrial is an equipment and services Key Figures company. It operates globally across three distinct segments: Agriculture, $23.6B 40 43 Construction and Financial Consolidated R&D Centers Manufacturing Services. Revenues (2022) Facilities Its most recognized brands 181 ~170 ~
Slide 6: Our Purpose and Vision
Our purpose Our vision We are driven by the need to find new ways of doing things, to move first to a place where others follow. We search continually for better solutions and breakthrough ideas, fusing Sustainably Innovation, Sustainability and advancing the noble Productivity to meet the enormous
Slide 7: Foundation for Profitable Growth & Market Leadership
FOUNDATION FOR PROFITABLE GROWTH & MARKET LEADERSHIP Continuously evolving Team and Culture Implementing CNH Business System to drive expansion of lean principles Margin expansion funding technology investments: Raven, Hemisphere, Augmenta, Organic Staffing Accelerated pace of R&D + Capex and new pr
Slide 8: CNH Strategic Priorities
CNH STRATEGIC PRIORITIES CUSTOME R BRAND TECHNO L O G Y OPERAT IO N A L SUSTAINA B I L ITY INSPIR E D AND DEAL ER LEA D ER S H IP EXCEL L E N C E STEWARD S H IP INNOV AT I O N STRENGT H As a Company at the We invest to merge With a strong family of We strive to find new We are committed to a forefro
Slide 9: Enhancing Our Culture to Drive Results
ENHANCING OUR CULTURE TO DRIVE RESULTS for customers, employees, shareholders, and all stakeholders Our Beliefs Customer first One team Grow together Make it simple Be the best 9 2023 Investor Presentation
Slide 10: The Senior Leadership Team
THE SENIOR LEADERSHIP CHIEF EXECUTIVE TEAM OFFICER Scott W. Wine GLOBAL BUSINESS UNITS PRESIDENT PRESIDENT PRESIDENT AGRICULTURE CONSTRUCTION FINANCIAL SERVICES Optimized organizational Derek Neilson Stefano Pampalone Oddone Incisa structure… CORPORATE REGIONS SUPPORT FUNCTIONS NORTH LATIN ASIA CHIE
Slide 11: Agriculture
AGRICULTURE World’s second largest manufacturer of agricultural machinery Leader in machine automation and precision technologies Pioneer in alternative propulsion 2022 Net Sales by Region Agriculture 2022 Asia Pacific $18.0B 23.8% 9% 38% North America Net Sales Gross Margin South America 21% $2.5B
Slide 12: Construction
CONSTRUCTION A global player in construction equipment Extensive synergies with Agriculture segment Co-investment in digital / electrification 2022 Net Sales by Region Construction 2022 Asia Pacific 8% $3.6B 13.3% Net Sales Gross Margin 19% South America 48% North America $124M 3.5% 25% Adj. EBIT Ad
Slide 13: Financial Services
FINANCIAL SERVICES Global financier supporting the brands, customers, importers and dealers Enhanced customer experience offering a competitive edge to our brands Managed Portfolio at 2022 Year End Financial Services 2022 Operating Lease $3.6B 6% +18% $23.8B 3.5% net sales Δ YoY @CC* Managed Portfol
Slide 14: 2024 Targets, as Presented at 2022 Capital Markets Day
2024 TARGETS, AS PRESENTED AT 2022 CAPITAL MARKETS DAY All segments strongly contributing to CNH’s growth and profitability AGRICULTURE CONSTRUCTION FINANCIAL SERVICES Well-balanced Transformation story Growth with industrial geographical reach activities' sales Strong market in US Continued commerc
Slide 15: 2022 Capital Markets Day Targets
2022 CAPITAL MARKETS DAY TARGETS Assuming 2021 industry volumes; 2024 industry volumes not yet forecasted OUTLOOK 2021 TO 2024 Net Sales $20B-$22B in 2024 ~6% CAGR Gross Margin above 24% in 2024 >300 bps increase R&D ~$2.6B (2022-2024) Step-up to ~4.5% of Net Sales Adj. EBIT Margin 12%-13% in 2024 2
Slide 16: Improving Profitability at All Points in the Cycle
IMPROVING PROFITABILITY AT ALL POINTS IN THE CYCLE 14% 13% Original 2024 Curves represent margin outcomes at different industry Industrial Activities Adj. EBIT % CMD Target1 12% volumes 2023E We are steadily shifting the 11% 2022 curve up through operational efficiencies 10% 2021 Consistent margin e
Slide 17: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Support future growth through operating cash flow reinvestments CREDIT RATING Maintain strong credit rating, supporting strategic captive finance business GROSS DEBT Reduce industrial debt through strong free cash flow SHAREHOLDER RETURNS Maintain a dedic
Slide 18: Industry Fundamentals
Industry Fundamentals 18 2023 Investor Presentation
Slide 19: Agriculture Industry: An Evolving Context
AGRICULTURE INDUSTRY: AN EVOLVING CONTEXT By listening to our farmers everyday we understand the challenges and opportunities that are reshaping agriculture GROWING SCARCITY OF TECHNOLOGY SUSTAINABILITY SUPPLY CHAIN POPULATION RESOURCES OUR FARMERS … … will need to feed 10 … are facing resource … ne
Slide 20: Optimized Agriculture Multi-Brand Strategy
OPTIMIZED AGRICULTURE MULTI-BRAND STRATEGY Brands setup to be the preferred local partner based on the specific needs of each size and type of farm 2022 AG NET SALES BY REGION AND BRAND North America $6.8B APAC Europe: Mainly cash crop Mix of large $1.7B and small grains, specialty farming Asia: Mai
Slide 21: A New Construction Industry
A NEW CONSTRUCTION INDUSTRY Our customers can reach new levels of efficiency and productivity, alongside new use-cases INFRASTRUCTURE TECHNOLOGY DIGITALIZATION SUSTAINABILITY Our customers are riding Our customers use tech to Our customers are looking for Our customers are asking for growing infrast
Slide 22: Impact on Our Business
IMPACT ON OUR BUSINESS INDUSTRY DRIVERS + ▪ Population growth ▪ Farm mechanization / digitalization ▪ NA infrastructure bill ▪ Availability / cost of skilled labor +/– ▪ Farm income ▪ Residential building ▪ Global weather ▪ Agriculture cycle patterns – ▪ Rising interest rates ▪ Geopolitical tensions
Slide 23: Customer Inspired Innovation
Customer Inspired Innovation 23 2023 Investor Presentation
Slide 24: Customer Inspired Innovation
CUSTOMER INSPIRED INNOVATION Customer focus drives everything we do ▪ Solving great challenges ▪ Rigorous “in field” R&D at scale ▪ 200+ product launches ▪ 100% connected machines ▪ Superior user experience ▪ Improving Net Promoter Scores (NPS) 24 2023 Investor Presentation
Slide 25: Agriculture Products Designed to Serve Our Farmers
AGRICULTURE PRODUCTS DESIGNED TO SERVE OUR FARMERS Continuous improvement of our product portfolio, tailoring each product to customers’ needs Autonomy 2021 2022 2023 2024 Alternative Propulsion LARGE 300HP+ 140-180HP 180-250HP 4WD TRACTORS 250-300HP 340 HP SMALL Speci al ty Speci al ty Speci al ty
Slide 26: Construction Product Evolution
CONSTRUCTION PRODUCT EVOLUTION Wheel Loader Crawler Excavator Motor Grader Dozer Productivity and operator Machine Control Optimize current range Relocation to Brazil and environment Integration (Electro-hydraulic controls + improving cost. improvement new display) Update small models HEAVY LINE Min
Slide 27: Alternative Propulsion Leader
ALTERNATIVE PROPULSION LEADER World’s 1st World’s 1st Bio-methane tractor Electric Backhoe loader 80% 30% Up to 90% We start from less pollutants1 lower operating costs1 lower operating costs1 a leadership Net zero Carbon Negative 90% Net zero position in carbon impact fuel from waste noise reductio
Slide 28: Financial Services
FINANCIAL SERVICES Competitive edge to our brands, supporting their customers and dealers CUSTOMER EXPERIENCE Strengthen our relationship with dealers & customers through loyalty programs and rewards DIGITALIZATION Modernization of operational systems New technology for virtual presence with custome
Slide 29: Precision Agriculture
Precision Agriculture 29 2023 Investor Presentation
Slide 30: Precision Ag Drives Scalable Results for Farmers
PRECISION AG DRIVES SCALABLE RESULTS FOR FARMERS Precision agriculture allows farmers to do more with less to meet rising demands… Less Less Less Less Arable Water Skilled Pesticides Land Labor By integrating automation and autonomy in the end-to-end agricultural lifecycle… Planning Fleet Soil Seed
Slide 31: Technological Leadership
TECHNOLOGICAL LEADERSHIP Improve productivity, yield, control and sustainability Full autonomous farming cycle Modular and scalable tech stack Accelerating precision offerings * 10+ products with alternative * propulsion CNH Ventures * * 31 2023 Investor Presentation * minority investment
Slide 32: Adopting a Technology Culture to Advance Precision Ag
ADOPTING A TECHNOLOGY CULTURE TO ADVANCE PRECISION AG Components of CNH Precision Ag Offerings Automation & Guidance: Connectivity & Architecture: Autonomy: Intelligence: Early Prototypes Auto and Row Data Platform: Modular Harvest and Tillage Architecture Guidance Agronomic Portal Automation CNH Fo
Slide 33: Sustainability
Sustainability 33 2023 Investor Presentation
Slide 34: ESG – Key Recognitions in 2022
ESG – KEY RECOGNITIONS IN 2022 The use by CNH of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of CNH by MSCI. MSCI services and data ar
Slide 35: Continuing Our Responsibility for Sustainability
CONTINUING OUR RESPONSIBILITY FOR SUSTAINABILITY Circularity and Inclusion, equity Governance Carbon footprint eco-efficiency and engagement and commitment Clear path to reduce CO2 Minimize the impact of Build equitable human New sustainability committee, emissions products and processes capital, tr
Slide 36: Carbon Footprint
CARBON FOOTPRINT New targets, science-based measurement, clear actions Ongoing engagement with Science Based Targets Initiative (SBTi) Reinforce our path of excellence on Scope 1 and 2 emissions 50% reduction vs. 2018 in CO2 / hour of production by 2030 90% share of renewable electricity by 2030 Not
Slide 37: Inclusion, Equity and Engagement
INCLUSION, EQUITY AND ENGAGEMENT Building an attractive workplace into the future Human Capital Employees Communities Development Commitment to increase YoY Expand participation and Development of disaster women representation in total scope of ERGs response program in workforce partnership with dea
Slide 38: Margin Improvement
Margin Improvement 38 2023 Investor Presentation
Slide 39: Operational Excellence
OPERATIONAL EXCELLENCE Accelerate continuous improvement CNH Business System (CBS) $550M+ operational efficiencies Strategic sourcing = value creation Customer-focused end-to-end processes 50% injury frequency rate reduction World-class quality and delivery 39 2023 Investor Presentation
Slide 40: CNH Business System (CBS)
CNH BUSINESS SYSTEM (CBS) A Breakthrough Approach Throughout our Company KAIZEN ACCELERATE INNOVATION MANAGEMENT TO MARKET DAILY MAKE CUSTOMERS RAVING FANS DEPLOYMENT CONTINUOUSLY EXPAND STRATEGY MARGINS CULTURAL BELIEFS 40 2023 Investor Presentation
Slide 41: Strategic Sourcing Program
STRATEGIC SOURCING PROGRAM TRANSFORM NEGOTIATE ESTABLISH ACHIEVE BEST SUPPLY CHAIN THE SUPPLY STRATEGIC LONG-TERM TOTAL VALUE RESILIENCE CHAIN AGREEMENTS RELATIONSHIPS TACTICAL SOURCING STRATEGIC SOURCING Primary focus on Broad perspective on multiple value drivers focused on total price and deliver
Slide 42: Appendix
Appendix 42 2023 Investor Presentation
Slide 43: Our History
OUR HISTORY 1996 1842 1985 Acquisition of STEYR CASE founded CASE acquires Landmaschinentechnik AG by Jerome Case International Harvester CNH’s expertise spans industries and 2022 continents, building CNH Industrial upon a great 2005 becomes a fully focused agriculture 1895 1986 tradition of histori
Slide 44: Reconciliation of Net Income to Adj. EBIT by Segment
RECONCILIATION OF NET INCOME TO ADJ. EBIT BY SEGMENT FY 2022 Unall. Items, ($mn) Industrial AG CE Elim. & Activities Other Consolidated Net income 2,039 Less: Consolidated Net Income (loss) of Discontinued Operations - Consolidated Net income (loss) of Continuing Operations 2,039 Less: Consolidated
Slide 45: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS investor.relations@cnhind.com Jason Omerza +1 (630) 740 8079 | jason.omerza@cnhind.com Federico Pavesi +39 (345) 605 6218 | federico.pavesi@cnhind.com CNH Industrial | Investors