Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Investor Presentation (November 2024)
48 slides from Cnh Industrial's investor presentation, November 2024
Slide 1: 2024 Investor Presentation
CNA 2 —— 2024 Investor Presentation 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) pe
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 43 3 2024 Investor Presentation
Slide 4: CNH At a Glance
CNH At a Glance 4 2024 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, $24.7B 48 42 Construction and Financial Consolidated R&D Centers Manufacturing Revenues (2023) Facilities Services. Its most recognized brands 182 164 ~4
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 CU S TOME R BRAND TECHNO L O G Y OPERAT IO N A L SUSTAINA B I L ITY INS PIR E D AND DEAL ER LEAD 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 foref
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 2024 Investor Presentation
Slide 10: Agriculture
AGRICULTURE World’s second largest manufacturer of agricultural machinery Leader in machine automation and precision technologies Pioneer in alternative propulsion 2023 Net Sales by Region Agriculture 2023 Asia Pacific $18.1B 25.5% 11% North America Net Sales Gross Margin South America 18% 39% $2.6B
Slide 11: Construction
CONSTRUCTION A global player in construction equipment Extensive synergies with Agriculture segment Co-investment in digital / electrification 2023 Net Sales by Region Construction 2023 Asia Pacific 7% $3.9B 15.6% 14% Net Sales Gross Margin North America South America 22% 57% $238M 6.1% Adj. EBIT Ad
Slide 12: 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 2023 Year End Financial Services 2023 Operating Lease $3.6B 5% +18% $28.9B 3.4% net sales Δ YoY @CC* Managed Portfol
Slide 13: 2024 Outlook – Agriculture
2024 OUTLOOK – AGRICULTURE Total Industry Unit Performance1 North South EMEA APAC America America LHP Tractors (15)% – (10)% (15)% – (10)% (15)% – (10)% (5)% – flat HHP Tractors (20)% – (15)% Combines (25)% – (20)% (35)% – (30)% (35)% – (30)% flat – 5% Total Industry Volume % change FY 2024 vs. FY 2
Slide 14: 2024 Outlook – Construction
2024 OUTLOOK – CONSTRUCTION Total Industry Unit Performance1 North South EMEA APAC America America Light (10)% – (5)% (20)% – (15)% flat – 5% ~flat Heavy (10)% – (5)% (10)% – (5)% flat – 5% flat – 5% Total Industry Volume % change FY 2024 vs. FY 2023 reflecting the aggregate for key markets where th
Slide 15: 2024 Outlook – Financial Targets
2024 OUTLOOK – FINANCIAL TARGETS Industrial current Activities Net Sales1 (23)-(22)% YoY Adj. EBIT margin2 3 8.0-9.0% Free Cash Flow2 ($300M)-($100M) Company current Adj. Diluted EPS2 3 $1.05-$1.15 (1) Reflects full-year €/$ exchange rate average of 1.09 (2) Non-GAAP measure (definition in the appen
Slide 16: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Support future growth through operating cash flow reinvestments BALANCE SHEET & CREDIT RATING Sustain healthy liquidity levels and investment grade credit rating SHAREHOLDER RETURNS Maintain a dedicated and consistent dividend and share repurchase policy
Slide 17: Industry Fundamentals
Industry Fundamentals 17 2024 Investor Presentation
Slide 18: 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 19: 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 2023 AG NET SALES BY REGION AND BRAND North America $7.2B APAC Europe: Mainly cash crop Mix of large $1.9B and small grains, specialty farming Asia: Mai
Slide 20: 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 21: 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 22: Customer Inspired Innovation
Customer Inspired Innovation 22 2024 Investor Presentation
Slide 23: 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) 23 2024 Investor Presentation
Slide 24: 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 25: 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 26: 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 27: 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 28: Precision Agriculture
Precision Agriculture 28 2024 Investor Presentation
Slide 29: 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 30: 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 * * 30 2024 Investor Presentation * minority investment
Slide 31: 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 32: Sustainability
Sustainability 32 2024 Investor Presentation
Slide 33: ESG – Key Recognitions in 2023
ESG – KEY RECOGNITIONS IN 2023 A- for Climate Change 33 2024 Investor Presentation
Slide 34: 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 35: Carbon Footprint
CARBON FOOTPRINT New targets, science-based measurement, clear actions 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 Note: information as presented at the Company’s 35 2024 Investor Pr
Slide 36: 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 37: Margin Improvement
Margin Improvement 37 2024 Investor Presentation
Slide 38: Operational Excellence
OPERATIONAL EXCELLENCE Accelerate continuous improvement CNH Business System (CBS) $550M+ operational efficiencies Strategic sourcing = value creation Customer-focused end-to-end processes 50% injury frequency rate reduction World-class quality and delivery 38 2024 Investor Presentation
Slide 39: CNH Business System (CBS)
CNH BUSINESS SYSTEM (CBS) A Breakthrough Approach Throughout our Company KAIZEN ACCELERATE INNOVATION MANAGEMENT TO MARKET DAILY MAKE CUSTOMERS RAVING FANS DEPLOYMENT CONTINUOUSLY EXPAND STRATEGY MARGINS CULTURAL BELIEFS 39 2024 Investor Presentation
Slide 40: Strategic Sourcing Program
STRATEGIC SOURCING PROGRAM TRANSFORM NEGOTIATE ESTABLISH ACHIEVE BEST SUPPLY CHAIN THE SUPPLY STRATEGIC LONG-TERM TOTAL VALUE RESILIENCE CHAIN AGREEMENTS RELATIONSHIPS TACTICAL SOURCING STRATEGIC SOURCING Primary focus on Broad perspective on multiple value drivers focused on total price and deliver
Slide 41: Cost Reduction Actions
COST REDUCTION ACTIONS Ongoing focus on both COGS and SG&A of Industrial Activities 2024 Actions & YtD Impact by Quarter1 ($M) Looking Ahead COGS ✓ Logistics costs ~300 ➢ $70-90M carryover benefit in 213 2025 from 2024 actions ✓ Manufacturing efficiencies 128 ➢ Continued productivity ✓ Material cost
Slide 42: Appendix
Appendix 42 2024 Investor Presentation
Slide 43: Our History
OUR HISTORY 1996 1842 1985 Acquisition of STEYR 2024 CASE founded CASE acquires Landmaschinentechnik AG CNH is single listed by Jerome Case International Harvester on the New York Stock Exchange CNH’s expertise spans industries and 2022 continents, building CNH Industrial upon a great 2005 becomes a
Slide 44: FY 2023 | Financials by Segment
FY 2023 | FINANCIALS BY SEGMENT ($M) Revenues & Adj. EBIT Gross Profit Gross Margin Adj. EBIT1 Net Sales Margin1 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 Agriculture 17,969 18,148 4,284 4,627 23.8% 25.5% 2,456 2,636 13.7% 14.5% Construction 3,572 3,932 474 615 13.3% 15.6% 124 238
Slide 45: Reconciliation of Net Income to Adj. EBIT of Industrial Activities
RECONCILIATION OF NET INCOME TO ADJ. EBIT OF INDUSTRIAL ACTIVITI ES ($M) FY 2022 FY 2023 Net Income1 2,039 2,287 Less: Consolidated income tax expense (747) (594) Consolidated income before taxes1 2,786 2,881 Less: Financial Services Financial Services Net Income 338 371 Financial Services Income Ta
Slide 46: Geographic Information
GEOGRAPHIC INFORMATION The composition of our regions part of the geographic information is as follows: ▪ North America: United States, Canada, and Mexico ▪ Europe, Middle East, and Africa (EMEA): member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, B
Slide 47: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CNH monitors its operations through the use of several non-GAAP financial measures. CNH’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH’s fi
Slide 48: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS investor.relations@cnh.com Jason Omerza +1 (630) 740 8079 | jason.omerza@cnh.com Federico Pavesi +39 (345) 605 6218 | federico.pavesi@cnh.com www.cnh.com
CNH Industrial — Investor Presentation (November 2024) on 6ix