Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Investor Day (February 2022)
16 slides from Cnh Industrial's investor day presentation, Feb 2, 2022
Slide 1: Financials
Financials Oddone Incisa CHIEF FINANCIAL OFFICER
Slide 2: Disclaimer and Basis of the Presentation
DISCLAIMER AND BASIS OF THE PRESENTATION The 2019 and 2021 results presented herein are unaudited Pro Forma financial information that has been prepared to represent the combined historical results of operations, financial position and cash flows of the business structure that is controlled by CNH I
Slide 3: Key Highlights, 2024 Targets
KEY HIGHLIGHTS, 2024 TARGETS All segments strongly contributing to CNH Industrial’s growth and profitability AGRICULTURE CONSTRUCTION FINANCIAL SERVICES Stable industry across Transformation story Growth with industrial well-balanced geos activities' sales Strong market in U.S. Continued commercial
Slide 4: Running Start
RUNNING START CNH Industrial to build on strong financial improvements 2019-2021 (Pro Forma) Gross Margin of Industrial Activities (%) Adj. EBIT Margin of Industrial Activities (%) FCF of Industrial Activities ($B) Adj. Net Income ($B) Adj. EPS ($/share) +1.5pp +$2.0B 1.28 +$0.8B 0.64 +3.5pp 19.2% 2
Slide 5: Industrial Activities' Drivers
INDUSTRIAL ACTIVITIES' DRIVERS Growth as key element underlying EBIT expansion – minimal market impact 2019 2021 2024E Net sales $13.7B $17.8B $20-22B Gross Margin 19.2% 20.7% ~24% Adj. EBIT walk 2021-2024 12%-13% 9.9% 6.4% 2019 2021 Market Growth Ops SG&A1 and 2024E Improvement R&D SG&A1 Product mi
Slide 6: Capex Allocation
CAPEX ALLOCATION Operating cash flow funding future growth Capex allocation 2022-2024 50% 40% 10% ~$1.8B Operating Cash Flow New product Maintenance Capacity Free Cash Flow and technology and other optimization ~$6.2B ~$4.4B 6
Slide 7: 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 8: Financial Services Targets
FINANCIAL SERVICES TARGETS Growing portfolio driven by retail financing expansion Portfolio1 $20.2B $20.2B ~$26.0B 28% 34% 27% 9% Wholesale 8% 9% Op. Lease 63% 57% 65% Retail 2019 2021 2024E Net income $274M $349M $360-380M ROE2 ~18% ~21% ~20% 1. Managed Portfolio including JVs 2. Adj. EBIT (pre-tax
Slide 9: CNH Industrial's Consolidated Outlook
CNH INDUSTRIAL’S CONSOLIDATED OUTLOOK Revenues and net income evolution Revenues Adj. Net Income Adj. EPS ($/share) Industrial Activities + Financial Services ~1.70 6% CAGR 1.28 10% CAGR 0.64 2019 2021 2024E 2019 2021 2024E $15.5B $19.5B $22-24B $0.9B $1.7B ~$2.3B Note: Totals include elisions and c
Slide 10: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Sustain growth and ensure shareholders returns, while maintaining a strong balance sheet ORGANIC GROWTH Support organic and sustain future growth through operating cash flow reinvestments CREDIT RATING Commit to investment grade, and target upgrades during the plan GROS
Slide 11: Available Liquidity Over Plan Horizon
AVAILABLE LIQUIDITY OVER PLAN HORIZON Manage liquidity leveraging significant operating cash flow generation from Industrial Activities Available Liquidity walk (2021 through 2024) Industrial Activities 2021 Operating Capex Deleveraging Dividends, 2024E Cash Flow Shares buy back $10.5B ~$6.2B ~$12.0
Slide 12: Key Figures Summary
KEY FIGURES SUMMARY OUTLOOK 2021 TO 2024 Net Sales $20-22B 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 200-300 bps increase Adj. EBITDA $3.0-3.2B in 2024 ~14% CAGR ROIC (%) ~19% in 2024 >300 bp
Slide 13: Our Path to Shareholder Value
OUR PATH TO SHAREHOLDER VALUE We build on a healthy portfolio of industrial activities advantaged by distinctive financial services We invest in new products and tech to support gross margin growth and prepare for a sustainable future We will deleverage gross and net debt with cash from the business
Slide 14: Innovation Sustainability Productivity
INNOVATION SUSTAINABILITY PRODUCTIVITY
Slide 15: Appendix – Non-GAAP Financial Measures
APPENDIX – 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 operating results and enhance the re
Slide 16: Safe Harbor Statement and Disclosure
SAFE HARBOR STATEMENT AND DISCLOSURE 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) per