Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — FY2015 Earnings Presentation
44 slides from Cnh Industrial's earnings presentation, Mar 10, 2016
Slide 1: CNH Industrial N.V. March 9, 2016
CNH Industrial N.V. March 9, 2016 Exhibit 99.1
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures March 9th, 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 respect
Slide 3: Company Overview
|| Company Overview
Slide 4: Our Products are tied together by Common Purpose
CNH Industrial N.V. Our Products are tied together by Common Purpose Professional industrial equipment and commercial vehicle customers Full line distribution model with wide geographic coverage Best in class powertrain technologies Full lifecycle product services Note: All figures are provided here
Slide 5: Global Industrial Footprint & Distribution Network (December 2015)
CNH Industrial N.V. Global Industrial Footprint & Distribution Network (December 2015) LATAM EMEA APAC NAFTA Manufacturing Facilities 11 R&D Centers 12 Employees 10.0k Manufacturing Facilities 10 R&D Centers 6 Employees 8.8k Manufacturing Facilities 9 R&D Centers 4 Employees 4.8k Manufacturing Facil
Slide 6: Technological Leadership, Best-In-Class Powertrain Capabilities
CNH Industrial N.V. Technological Leadership, Best-In-Class Powertrain Capabilities March 9th, 2016 Maintaining Technological Leadership Engine After Treatment Energy Recovery & Management Efficiency: increasing from 46 to 50%+ Emissions: lowering CO2 emissions by 8% Performance: +10% for same displ
Slide 7: Growing Responsibly and Sustainably
CNH Industrial N.V. Growing Responsibly and Sustainably DJSI World – Machinery and Electrical Equipment Eligible companies:90 Admitted companies:10 CNH Industrial Industry Leader for 5th consecutive year & Capital Goods Industry Group Leader CNH Industrial is also included among other leading sustai
Slide 8: FY 2015 Financial Highlights
FY 2015 Financial Highlights
Slide 9: FY 2015 Financial Highlights
FY 2014 FY 2015 Net Sales Industrial Activities ($bn) 31.2 24.7 Operating Margin Industrial Activities 6.4% 5.8% Net Income (1) ($mn) 940 474 EPS (1) ($) 0.69 0.35 Net Industrial Debt ($bn) 2.7 1.6 Available Liquidity ($bn) 8.9 9.3 FY 2014 FY 2015 Net Sales * $31.2bn Operating Profit * $2.0bn Net Sa
Slide 10: FY 2015 Industrial Activities Net Sales and Operating Profit Composition
FY 2015 Industrial Activities (Net Sales and Operating Profit Composition) 10,888 3,346 15,204 4,464 11,413 12,220 4,233 28,216 (2,982) (3,539) Agricultural Equipment Commercial Vehicles Powertrain Construction Equipment (9.6%) (11.3%) 31,198 (*) Note: Net Sales and Operating Profit: Including Other
Slide 11: FY 2015 Industrial Activities - Net Sales
FY 2015 Industrial Activities - Net Sales Net Sales Walk By Segment ($Bn) 31.2 24.7 (3.0) (0.6) 0.5 (0.2) 0.3 Agricultural Equipment NAFTA LATAM APAC EMEA Tractors Other Combines Net Sales By Region & Product Construction Equipment NAFTA LATAM APAC EMEA Light Other Heavy Powertrain NAFTA LATAM APAC
Slide 12: FY 2015 Industrial Activities - Operating Profit
FY 2015 Industrial Activities - Operating Profit Operating Profit Walk By Segment ($Mn) 1,988 1,432 (818) 11 254 (37) 34 AG - Operating Profit Walk ($Mn) CE - Operating Profit Walk ($Mn) CV - Operating Profit Walk ($Mn) 6.4% 5.8% 11.6% 8.6% 1,770 (1,183) 168 96 136 98 (133) 952 79 2.4% 3.5% (126) 39
Slide 13: FY 2015 Cash Flow – Change in Net Industrial Debt
FY 2015 Cash Flow – Change in Net Industrial Debt Net Industrial Cash Flow 772 Change in Net Debt 1,069 (2,691) 248 694 124 470 (653) (111) (274) 571 (1,622) Reduction in net debt of $1.1bn driven by decrease in inventory in Agricultural Equipment and favourable FX translation impact on non-US dolla
Slide 14: FY 2015 Industrial Activities - Capex breakdown
FY 2015 Industrial Activities - Capex breakdown 1,005 -35% Delta % FY ’15 vs. FY ‘14 653 Total Capex ($mn)1 279 136 150 88 417 246 200 142 Q4 Q3 Q2 Q1 By Category By Segment FY 2014 FY 2015 FY 2014 FY 2015 New Product & Technology Maintenance & Other Industrial Capacity Expansion & LT Investments Ag
Slide 15: FY 2015 Financial Services performance
FY 2015 Financial Services performance Key Highlights ($mn) Delta % FY ’15 vs. FY ‘14 (**) RoA defined as: PBT / average managed assets annualized 364 98 105 75 86 Q4 Q3 Q2 Q1 368 91 98 94 85 1% Net income was $368mn, up $4mn compared to FY 2014 Lower provisions for credit losses and SG&A expenses,
Slide 16: FY 2015 Financial Services performance: Delinquencies and Portfolio
FY 2015 Financial Services performance Delinquencies On-Book over 30 days 3.5% 4.8% 3.2% (*) Including unconsolidated JVs Managed Portfolio* & Retail Origination FY retail originations at $9.4bn, down $1.4bn (down $0.4bn at constant currency) compared to December 31, 2014 Managed portfolio* at $24.7
Slide 17: Liquidity & Debt Maturity
Dec. 31, 2015 Liquidity & Debt Maturity Available Liquidity ($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 Bank Debt Capital
Slide 18: Industrial Activities Overview
Industrial Activities Overview
Slide 19: Agricultural Equipment Inventory management
Agricultural Equipment Inventory management (units of equipment) – Industry units (*) Excluding Joint Ventures / Source: CNH Industrial Internal Data Tractors Industry Units For FY 2014 For FY 2015 NAFTA ** (25%) (28%) EMEA (10%) (7%) LATAM (24%) (39%) APAC (9%) (4%) Worldwide (18%) (19%) Combines T
Slide 20: Agricultural Equipment Management Actions & Industry drivers
Agricultural Equipment Management Actions & Industry drivers (1) Sum of 140+/4WD, Combines, Major Crop Production NAFTA – CNHI AG Row Crop Segment Actions (*) Source: IHS Global Insight; Commodity spot as per CME Group (**) Source: IHS November 2015 (15%) – (20%) NAFTA Row Crop Industry 1 Monthly Co
Slide 21: 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 22: Construction Equipment Management Actions – Efficiency Program
Construction Equipment Management Actions – Efficiency Program re‐tooling of industrial footprint 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 development and adaptation i
Slide 23: Commercial Vehicles Inventory management
Commercial Vehicles Inventory management (units of equipment) – Industry units – FY 2015 Deliveries & Orders Commercial Vehicles (All Equipment) FY 2015 overproduction vs. retail at 4% Inventory FMS (forward month of supply) flat vs. last year * Reflects aggregate for key markets where the Company c
Slide 24: Commercial Vehicles Operating Margin improvement & Market share
Commercial Vehicles Operating Margin improvement & Market share European Truck market share at 11.3% up 0.4 p.p. vs. FY 2014 EU28 – FY ’15 Market Share (%) Light Heavy Light at 11.3% up 0.6 p.p. vs. FY 2014 Medium at 30.6% up 1.4 p.p. vs. FY 2014 Heavy at 7.9% up 0.3 p.p. vs. FY 2014 Medium Operatin
Slide 25: 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 Other Actions Iveco triumphs in 2016 Dakar Rally re‐tooling of in
Slide 26: Powertrain FY 2015 Financial Results
Powertrain FY 2015 Financial Results FY 2015 third party Net sales at 46% vs. 41% in 2014 Key Highlights Net Sales & Operating Profit ($mn) Net sales were $3.6bn, down 5.2% on a constant currency basis compared to 2014 Lower captive agricultural equipment demand, and the 2014 build-up of Tier 4 fina
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 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%) Flat - (5%) Agricult
Slide 29: Efficiency Program - Update
Efficiency Program - Update Note: Numbers may not add due to rounding. Combined benefit will result in estimated savings of approximately $200mn per year Agricultural Equipment Commercial Vehicles Construction Equipment The Company’s Efficiency Program has enhanced the competitiveness of its Agricul
Slide 30: 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 Dividends Share Buy-Back Program Recommending a dividend of €0.13 p
Slide 31: Q1 2016E Preliminary view
Q1 2016E Preliminary view What is expected for Q1 2016E Agricultural Equipment Lower profitability in Q1 ’16E mainly due to Q1 ‘16 NAFTA Row Crop production down >50% vs. Q1 ’15 (to re-align inventory to prevailing market demand) resulting in an expected decremental margin of ~(30%) Construction Equ
Slide 32: Appendix
Appendix
Slide 33: 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 34: FY 2015 From operating profit to net income (US GAAP)
FY 2015 From operating profit to net income (US GAAP) ($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
Slide 35: FY 2015 Pension and OPEB plans funded status
FY 2015 Pension and OPEB plans funded status (US GAAP $) Pension plan Funded Status OPEB and Other Funded Status (healthcare & Other plans) ($Mn) ($Mn) (801) (933) Dec 31, 2014 Interest & Service Cost Discount rate & other Actuarial gain / (Losses) Actual return on Assets Employer Contributions CTA*
Slide 36: Net Income to Net Income and basic EPS before Restructuring and Exceptional Items
FY 2015 Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) Full Year 2015 2014 Net Income / (Loss) 248 708 Restructuring expenses, net of tax 76 168 Other exceptional items, net of tax 150 (1) 64 Net Income before restructuring and other exceptional
Slide 37: Operating Profit US GAAP to Trading Profit IFRS - Reconciliation
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: Full Year 2015 % of Net Sales 2014 % of Net Sales US GAAP - Industrial Operating Profit 1,432 5.8% 1,988 6.4% Development c
Slide 38: Net Income US GAAP to Profit under IFRS
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: Full Year 2015 EPS 2014 EPS Net Income / (Loss) attributable to CNH Industrial N.V. 253 0.19 710 0.52 Plus: Net Income / (Loss) at
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: Gross Debt – Breakdown (US GAAP)
Dec. 31, 2015 Gross Debt – Breakdown (US GAAP) December 31, 2014 December 31, 2015 Industrial Financial Services Industrial Financial Services 3.5 2.1 Bank Debt 2.0 2.4 6.5 3.5 Capital Market 5.0 3.7 0.2 0.2 Other Debt 0.2 0.1 10.2 5.9 Cash Maturities 7.2 6.1 0.0 10.5 ABS / Securitization 0.0 9.4 0.
Slide 41: Debt Maturity Schedule – Breakdown (US GAAP)
Dec. 31, 2015 Debt Maturity Schedule – Breakdown (US GAAP) 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
Slide 42: Geographic Information
Geographic Information March 9th, 2016 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
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 March 9th, 2016