Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q2 2017 Earnings Presentation
36 slides from Cnh Industrial's earnings presentation, Jul 26, 2017
Slide 1: Q2 & H1 2017 Results
Q2 & H1 2017 Results July 26, 2017 Exhibit 99.2
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 2017 Highlights
Q2 2017 | Highlights FY 2017 Guidance Leading to the high end of sales and EPS range Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated Net Income at $247mn Adjusted Net Income (1) at $266mn Industrial Solid performance across segments $400+mn of cash flow generati
Slide 4: Q2 2017 Main Product Launches & Awards
Q2 2017 | Main Product Launches & Awards Case IH 175th ANNIVERSARY CURITIBA PLANT (BRAZIL) – SILVER MEDAL IN WCM INTERNATIONAL MINIBUS OF THE YEAR 2017 GRAND ISLAND (US) – SILVER MEDAL IN WCM
Slide 5: Q2 2017 Summary
Q2 2017 | Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Industrial Activities Net Sales & Operating Margin Adj. Net Income & EPS (1) Net Industrial Debt (1) Available Liquidity (1) Net Sales at $6.7bn up 3.2% vs. last year Operating Margin at 7.2% vs. 7.0% last year $(2.1
Slide 6: Net Sales | Industrial Activities
Net Sales | Industrial Activities Net Sales walk at Constant Currency ($mn) 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 6,450 94 80 36 141 (63) 6,738 (83) 6,655 Q2 2016 AG CE
Slide 7: Industrial Activities Operating Profit and Adjusted Net Income Walk
Industrial Activities Operating Profit and Adjusted Net Income Walk ($mn) 216 28 6 1 15 12 4 (16) 266 Q2 2016 IA OPERATING PROFIT FS OPERATING PROFIT OP ELIM INTEREST EXPENSES, NET (1) OTHER NET (2) JV INCOME (3) TAXES (4) Q2 2017 CHANGE IN ADJUSTED NET INCOME 50 ($mn) 453 2 0 (9) 32 3 481 Q2 2016 A
Slide 8: Cash Flow | Change in Net Industrial Debt
Cash Flow | Change in Net Industrial Debt (2,123) 247 176 17 44 29 (91) 1 (169) (195) (*) (2,064) MAR 31, 2017 NET INCOME D&A CHARGE ON REPURCHASE OF NOTES / EARLY REDEMPTION CHG IN PROVISION AND SIMILAR CHANGE IN WC CAPEX OTHER CHANGES CAPITAL INCREASE & DIVIDENDS, NET FX TRANSLATION & OTHER JUN 30
Slide 9: Capex | Change in Working Capital | Net Industrial Cash Flow
Capex | Change in Working Capital | Net Industrial Cash Flow Capex (1) Change in Working Capital Net Industrial Cash Flow BY SEGMENT AG CE BY CATEGORY CV PT NEW PRODUCT & TECHNOLOGY MAINTENANCE & OTHER INDUSTRIAL CAPACY EXPANSION & LT INVESTMENTS Cash inflow Cash outflow Cash inflow Cash outflow TRA
Slide 10: Financial Services
Financial Services Net Income ($mn) Managed Portfolio (*) & Retail Originations (*) Delinquencies on Book (>30 Days) $25.3bn Q2 retail originations at $2.3bn, flat compared to June 30, 2016 Managed portfolio* at $25.6bn, up $0.3bn compared to June 30, 2016 $25.6bn Q2 ’17 Profitability ratios: Gross
Slide 11: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 06/30/2017 2 Of which $0.7bn ABS related & Restricted Cash (*) CNH Industrial N.V. short-term rating was raised to “A-3”. The issue-level ratings of both CNH industrial N.V and CNH industrial Capital LLC was also raised to
Slide 12: Industrial Activities Overview
Industrial Activities Overview
Slide 13: AG | Financial Results
AG | Financial Results Operating Profit walk Net Sales 301 (13) 28 1 (5) (9) 0 303 Q2 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Q2 2017 ($mn) CHANGE VS Q2 2016 NAFTA (4.4%) EMEA 2.7% LATAM 28.9% APAC 4.3% CHANGE VS Q2 2016 TRACTORS 1.1% COMBINES 14.3% OTHERS (2.2%) Net Sales at $2.
Slide 14: AG | Industry performance & Inventory management
AG | Industry performance & Inventory management | 0-140HP 8% | 140+ HP (1) (6%) EMEA (3%) LATAM 24% APAC 1% Industry Units (For Q2 2017) Tractors Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 (1) Included in row crop sector definition Q2 2017 overproduction vs. retail at 8% Production up 3% vs. Q2 2
Slide 15: AG | NAFTA Row Crop Production
AG | NAFTA Row Crop Production NAFTA ROW CROP UNDERPRODUCTION VS. RETAIL AT 7% Channel Inventory 3.4x 2.3x 1.9x Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 (5%) vs. last year Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 (20%) vs. last year US Industry – HHP Tractors Used to New Sales Ratio (1) (1) Source: New sales data from AEM, u
Slide 16: CE | Financial Results
CE | Financial Results Operating Profit walk Net Sales 17 3 2 (6) 0 5 (4) 17 Q2 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Q2 2017 ($mn) 2.9% 2.5% CHANGE VS Q2 2016 NAFTA 13.1% EMEA (1.4%) LATAM 2.9% APAC 53.6% CHANGE VS Q2 2016 LIGHT 5.0% HEAVY 20.8% OTHERS n.m. Net Sales at $676mn
Slide 17: CE | Industry performance & Inventory management
CE | Industry performance & Inventory management Light NAFTA 10% EMEA 3% LATAM 10% APAC 26% Industry Units (For Q2 2017) Heavy NAFTA 8% EMEA 5% LATAM 5% APAC 65% Q2 2017 overproduction vs. retail at 8% Production up 4% vs. Q2 2016 Inventory Management (Light & Heavy) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 20
Slide 18: CV | Financial Results
CV | Financial Results Operating Profit walk Net Sales 100 (17) 0 17 (3) 5 (11) 91 Q2 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Q2 2017 ($mn) CHANGE VS Q2 2016 NAFTA n.m. EMEA (5.7%) LATAM 19.3% APAC 44.1% CHANGE VS Q2 2016 TRUCKS (1%) BUSES Flat OTHERS (1) 1% Net Sales at $2.6bn d
Slide 19: CV | Industry performance & Inventory management
CV | Industry performance & Inventory management TRUCKS >3.5T EMEA (*) 1% LATAM (*) 10% APAC (*) 5% Industry Units (For Q2 2017) Inventory Management (CV – All Equipment) Q2 2017 – Europe Trucks MKT SHARE(1) CHG VS ‘16 ORDERS DELIVERIES B-TO-B Light (3.5-7.49t) 14.5% Flat (3%) (6%) 0.93 M&H (≥7.5t)
Slide 20: PT | Financial Results
PT | Financial Results Net Sales & Operating Profit CHANGE VS Q2 2016 NAFTA 12% EMEA 7% LATAM 34% APAC 25% BY REGION CHANGE VS Q2 2016 ENGINES 10% TRANSM. 5% AXLES 25% BY PRODUCT Δ ENGINES 159.9k 9% TRANSMISSIONS 19.7k (13%) AXLES 54.1k (2%) Units Sold Engines sold to third party at 51% vs. 54% in Q
Slide 21: FY 2017E US GAAP Financial Targets
FY 2017E US GAAP Financial Targets
Slide 22: FY 2017E | Industry Units
FY 2017E | Industry Units TRACTORS COMBINES LIGHT HEAVY TRUCKS >3.5T NAFTA Flat Flat 5% Flat – 5% - (5%) – (10%) EMEA Flat Flat 5% 5% Flat LATAM 15% - 20% 10% – 15% Flat – 5% Flat – 5% 10% - 15% APAC Flat – 5% Flat – 5% Flat – 5% 5 – 10% Flat AG CE 0-140 HP 140+ HP 1 Reflects aggregate for key marke
Slide 23: FY 2017E | US GAAP Financial Targets
FY 2017E | US GAAP Financial Targets (*) Outlook is not provided on diluted EPS, most comparable GAAP financial measure of this non-GAAP financial measure, as the income or expense excluded from the calculation of adjusted diluted EPS are, by definition, not predictable and uncertain FY 2017E Guidan
Slide 24: Appendix
Appendix
Slide 25: From Operating Profit to Net Income (Loss) under US GAAP
From Operating Profit to Net Income (Loss) under US GAAP Q2 2017 Q2 2016 Δ Industrial Activities Operating Profit 481 453 28 Financial Services Operating Profit 125 119 6 Elimination & Other (83) (84) 1 Operating Profit 523 488 35 Restructuring expenses (12) (10) (2) Interest expenses of Industrial
Slide 26: Reconciliation of Adj. net income and Adj. diluted EPS
Q2 & H1 2017 Reconciliation of Adj. net income and Adj. income taxes to the most comparable GAAP financial measure and determination of Adj. diluted EPS and Adj. ETR under U.S.GAAP Q2 2017 Q2 2016 Net Income (Loss) 247 129 Adjustments impacting Income (loss) before income tax (expense) and equity in
Slide 27: Reconciliation of Adjustments to Adj. Net Income
Q2 & H1 2017 Reconciliation of Adj. net income and Adj. income taxes to the most comparable GAAP financial measure and determination of Adj. diluted EPS and Adj. ETR under U.S.GAAP Q2 2017 Q2 2016 (a) Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolida
Slide 28: Net Income US GAAP to Profit under EU-IFRS
Net Income / (Loss) US GAAP to Profit / (Loss) under EU-IFRS | Reconciliation 2017 EPS 2016 EPS 2017 EPS 2016 EPS Net Income (Loss) attributable to CNH Industrial N.V. 242 0.18 126 0.10 288 0.21 (386) (0.28) Plus: Net Income / (Loss) attributable to non-controlling interest 5 3 8 2 Net Income / (Los
Slide 29: Total Equity – US GAAP to EU-IFRS
Total Equity – US GAAP to EU-IFRS | Reconciliation Jun 30 2017 Dec 31 2016 Total Equity in accordance with US GAAP 4,457 4,451 Development costs 2,440 2,374 Other adjustments (136) (121) Tax impact on adjustments (701) (655) Deferred tax assets and tax contingencies recognition 651 585 Total adjustm
Slide 30: Reconciliation of Total Debt to Net Debt (US GAAP)
Reconciliation of Total Debt to Net Debt (US GAAP) June 30, 2017 December 31, 2016 June 30, 2017 December 31, 2016 June 30, 2017 December 31, 2016 Third party debt 25,474 25,276 6,665 6,694 18,809 18,582 Intersegment notes payable - - 803 997 1,318 1,479 Total Debt (1) 25,474 25,276 7,468 7,691 20,1
Slide 31: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt June 30, 2017 Dec 31, 2016 Total Debt (1) (25,474) (25,276) Financial Services Third Party Debt 18,809 18,582 Intersegment Note Payables (803) (997) Intersegment Note Receivables 1,318 1,479 Cash and cash equivalents 4,085 4,649 Restricted cash 6 - Derivatives
Slide 32: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding June 30, 2017 6M 2017 2018 2019 2020 2021 Beyond 4.5 Bank Debt 1.1 0.8 1.0 1.1 0.2 0.2 9.3 Capital Market 0.1 2.7 1.7 0.6 1.7 5.5 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.0 14.0 Cash Portion of Debt Maturities 1.2 3.5 2.8 1.8 1.9 2.8 5.3 Cash & Cash Equival
Slide 33: CV | Industry performance | Europe Trucks
CV | Industry performance | Europe Trucks (*) Europe: EU 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) Q1 Q2 2015 2016 2017 2
Slide 34: 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 35: 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 36: 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