Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — H1 2019 Earnings Presentation
44 slides from Cnh Industrial's earnings presentation, Aug 1, 2019
Slide 1: Q2 & H1 2019 Results Review
Q2 & H1 2019 Results Review August 1, 2019 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 & H1 2019 Highlights
Q2 & H1 2019 | Highlights Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Non-GAAP measures (definition and reconciliation in appendix) Note: @CC means at constant currency H1 2019 Highlights Q2 2019 Highlights Down 2.3% (at CC) Industrial Activities Net Sales
Slide 4: Q2 2019 Industry and Company Unit Performances
Q2 2019 | Industry and Company Unit Performances COMPANY ACTUALS (Units) Worldwide deliveries down 9% in Tractors and down 15% in Combines vs. last year Worldwide production down 2% vs. last year Worldwide inventory was up 33% in Tractors and up 1% in Combines North America inventory was down 20% in
Slide 5: Q2 & H1 2019 Financial Summary
Q2 & H1 2019 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Note: Numbers may not add due to rounding Note: @CC means at constant currency Q2 2019 Q2 2018 Δ H1 2019 H1 2018 Δ U.S. GAAP Revenues ($bn) 7.6 8.0 (5.9)% 14.0 14.8 (5.4)% Net Sales | Industrial Activi
Slide 6: Industrial Activities Net Sales
Q2 & H1 2019 | Industrial Activities Net Sales Net Sales split (1) BY SEGMENT AG CE C&SV PT (1) Note: Net Sales: Excluding Other Activities, Unallocated Items and Adjustment & Eliminations BY CURRENCY EUR 46% USD 28% BRL 7% CAD 3% GBP 1% AUD 2% OTHER 13% Note: Numbers may not add due to rounding (*)
Slide 7: Industrial Activities Adj. EBIT walk
Q2 & H1 2019 | Industrial Activities Adj. EBIT walk Non-GAAP measures (definition and reconciliation in appendix) (*) PT Pricing net within Volume & Mix 571 (57) 97 (67) 11 (24) (21) 17 527 Adj. EBIT VOL & MIX PRICING NET (*) PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER Adj. EBIT Q2 2018
Slide 8: Industrial Activities Adj. EBITDA & Adj. EBIT walk by segment
Q2 2019 | Industrial Activities Adj. EBITDA & Adj. EBIT walk by segment Non-GAAP measures (definition and reconciliation in appendix) (*) Including unallocated items 843 272 571 (55) (8) 8 (6) 17 527 241 768 Adj. EBITDA D&A Adj EBIT AG CE C&SV PT ELIM & OTHER (*) Adj EBIT D&A Adj EBITDA Gross Margin
Slide 9: AG Financial Results
AG | Financial Results Note: at CC means at constant currency Adj. EBITDA & Adj. EBIT walk 472 76 396 (60) 77 (48) (2) (15) (7) 341 69 410 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA 2018 2019 14.3% 12.0% 11.0% 13.2% 737 155 582 (64
Slide 10: CE Financial Results
CE | Financial Results NA EU SA RoW C&S (*) General CE (*) R&S (*) Q2 ’19 Change vs. prior year Q2 ’19 Change vs. prior year (*) C&S: Compact and Service Equipment; General CE: General Construction; R&S : Road building and site preparation ($mn) Note: at CC means at constant currency Net Sales 2019
Slide 11: C&SV Financial Results
C&SV | Financial Results ($mn) NA EU SA RoW n.m. TRUCKS BUSES SPECIALTY VEHICLES Q2 ’19 Change vs. prior year Q2 ’19 Change vs. prior year Note: at CC means at constant currency Net Sales 2019 2018 Δ Δ At CC 2,698 2,889 (6.6)% (0.5)% 5,112 5,384 (5.1)% 2.2% Q2 H1 Adj. EBITDA & Adj. EBIT walk 8.3% 3.
Slide 12: PT Financial Results
PT | Financial Results NA EU SA RoW ENGINES TRANSM. AXLES Q2 ’19 Change vs. prior year Q2 ’19 Change vs. prior year ($mn) Note: at CC means at constant currency (*) Net Sales 2019 2018 Δ Δ At CC 1,133 1,218 (7.0)% (1.3)% 2,169 2,404 (9.8)% (3.5)% Q2 H1 (*) 3rd Party sales at 48% in 2019 vs. 49% last
Slide 13: Financial Services Managed Portfolio & Retail Originations
Financial Services Managed Portfolio (*) & Retail Originations (*) Net Income ($mn) 102 91 (*) Including unconsolidated JVs Delinquencies on Book (>30 Days) (**) RoA defined as: PBT / average managed assets annualized Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 14: Net Industrial Cash Flow and Available Liquidity
Q2 2019 | Net Industrial Cash Flow and Available Liquidity 9.9 Change in Working Capital Cash inflow Cash outflow TRADE RECEIVABLES INVENTORIES TRADE PAYABLES OTHER CHG IN WORKING CAPITAL (135) Q2 2019 Q2 2018 Non-GAAP measures (reconciliation in appendix) 382 (1.5) Net Debt IA Free Cash Flow IA Cas
Slide 15: FY 2019E US GAAP Financial Targets and Market Outlook
FY 2019E US GAAP Financial Targets and Market Outlook
Slide 16: FY 2019E Industry Outlook
FY 2019E | Industry Outlook (*) NOTE: Total Industry Volume FY 2019E vs. FY 2018 reflecting aggregate for key markets where Company competes (*) New Regional split definition in Appendix TRACTORS COMBINES NA EU SA RoW WW 0-140 HP Flat – 5% Flat – 5% Flat (5%) (5%) - Flat 140+ HP (5%) – Flat Flat (10
Slide 17: FY 2019E US GAAP Financial Targets
FY 2019E | US GAAP Financial Targets (1) 2019 guidance does not include any impacts deriving from the gain resulting from the modification of the healthcare plan in the U.S. previously mentioned, as this gain has been considered non-recurring and therefore treated as an adjusting item for the purpos
Slide 18: Closing Remarks
Closing Remarks
Slide 19: IVECO S-WAY: the IVECO heavy duty truck for the next decade
Q2 2019 | IVECO S-WAY: the IVECO heavy duty truck for the next decade New Engine New Engine S-WAY | the 100% connected, driver-centric long haul truck IVECO: New S-WAY The on-road IVECO S-WAY is the first vehicle in the new IVECO WAY heavy range, developed to deliver a complete package of features a
Slide 20: New Product Highlights and Awards
Q2 2019 | New Product Highlights and Awards HEULIEZ BUS HEULIEZ BUS wins major order for electric buses from the Paris public transport operator, RATP. The order, worth €133mn was signed in May 2019 and is the largest fully electric bus order to date for HEULIEZ BUS. The vehicles will be delivered o
Slide 21: 80:20 quarterly update
Q2 2019 | 80:20 quarterly update Product complexity Reduction of SKU (*) Product complexity Reduction of SKU (*) Distribution complexity Reduction of direct customer count 48% 13% 60% 80:20 TRANSFORMATION North America Pilot roll-out in Construction North America progressing; first step reduction of
Slide 22: H2 2019 Looking ahead
H2 2019 | Looking ahead New Organization Organization streamlining via span of control and organizational layers optimization to become more customer centric, lean and agile; first stream of efficiency of labor cost savings in our G&A structure identified and under execution Industry sentiment AG: u
Slide 23: Appendix
Appendix
Slide 24: Industrial Activities Q2 2019 Net Sales Split
Industrial Activities | Q2 2019 Net Sales Split Agriculture Q2 2019 | Split Chg. vs. Q2 ’18 Construction Q2 2019 | Split Chg. vs. Q2 ‘18 By region: By region: NA 36% 3% NA 52% (3%) EU 39% (10%) EU 17% (2%) SA 12% 7% SA 12% (4%) RoW 13% (24%) RoW 19% (14%) By product: By product: TRACTORS 56% (6.7%)
Slide 25: Industrial Activities H1 2019 Net Sales Split
Industrial Activities | H1 2019 Net Sales Split (*) C&S: Compact and Service Equipment; General CE: General Construction; R&S : Road building and site preparation Agriculture H1 2019 | Split Chg. vs. H1 ’18 Construction H1 2019 | Split Chg. vs. H1 ‘18 By region: By region: NA 35% 6% NA 50% (4%) EU 3
Slide 26: Reconciliation of Net Income to Adj. EBIT and EBITDA by Segment, Q2 2019
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” In the three months ended June 30, 2019, this item includes the pre-tax gain of $30 million, as a result of the amortization
Slide 27: Reconciliation of Net Income to Adj. EBIT and EBITDA by Segment, Q2 2018
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) ($mn) Q2 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) 306 102 408 Add back: Interest expenses of Industrial Activities, net of interest income an
Slide 28: Reconciliation of Net Income to Adj. EBIT and EBITDA by Segment, H1 2019
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” In the six months ended June 30, 2019, this item includes the pre-tax gain of $60 million as a result of the amortization ov
Slide 29: Reconciliation of Net Income to Adj. EBIT and EBITDA by Segment, H1 2018
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) ($mn) H1 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) 405 205 610 Add back: Interest expenses of Industrial Activities, net of interest income an
Slide 30: Reconciliation of Adj. net income and Adj. income tax to Net Income
Q2 & H1 2019 Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP ($mn) H1 2019 H1 2018 Q2 2019 Q2 2018 691 610 Net income (loss) 427 408 (24) (12) Adjustments impacting Income (l
Slide 31: Reconciliation of Adj. net income and Adj. income tax (adjustments detail)
Q2 & H1 2019 ($mn) Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP H1 2019 H1 2018 Q2 2019 Q2 2018 (a) Adjustments impacting Income (loss) before income tax (expense) and equ
Slide 32: Investment in Future Growth
Q2 2019 | Investment in Future Growth Total spending in new products was $189mn in Q2 2019, up 10% vs. last year Digitalization; Electrification; Autonomous & Telematics Regulatory Other New Products and Upgrades (1) Excluding assets sold under buy-back commitments and assets under operating leases
Slide 33: Capex
Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q2 2019 Q2 2018 H1 2019 H1 2018 Investments in property, plant and equipment, and intangible assets (1) 103 97 180 158 Breakdown by Category NEW PRODUCT & TECHNOLOGY 48% 46% 45% 35% MAINTENANCE & OTHER 4
Slide 34: Reconciliation of Operating Activities cash flow to Free cash flow
Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities (US GAAP) (1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments. ($mn) Q2 2019 Q2 2018 H1 2019 H1 2018 Net cash p
Slide 35: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 06/30/2019 2 Of which $0.7bn Restricted Cash Undrawn M/T unsecured Committed Lines Bank Debt Capital Market Cash Other Available Liquidity ($bn) Available liquidity at June 30, 2019 was $9.9bn, compared to $10.0bn at March
Slide 36: Reconciliation of Total Debt to Net Debt
Reconciliation of Total Debt to Net Debt (US GAAP) Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Third party debt (24,369) (24,445) (5,170) (5,211) (19,199) (19,234) Intersegment notes payable - - (1,274) (1,136) (1,592) (1,202) Total (Debt) (1) (24,369) (24,445) (6,4
Slide 37: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt Jun 30, 2019 Dec 31, 2018 Total (Debt) (1) (24,369) (24,445) Financial Services Third Party Debt 19,199 19,234 Intersegment Note Payables (1,274) (1,136) Intersegment Note Receivables 1,592 1,202 Cash and cash equivalents 3,276 4,553 Restricted cash 54 - Deriva
Slide 38: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding Jun 30, 2019 2019 2020 2021 2022 2023 2024 Beyond (4.0) Bank Debt (0.8) (1.9) (0.6) (0.3) (0.2) (0.1) (0.1) (8.9) Capital Market (1.1) (0.7) (1.5) (1.2) (1.2) (0.5) (2.7) (0.1) Other Debt (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (13.0) Cash Portion of
Slide 39: Total Equity – US GAAP to EU-IFRS Reconciliation
Total Equity – US GAAP to EU-IFRS | Reconciliation Jun 30, 2019 Dec 31, 2018 Total Equity in accordance with US GAAP 5,489 5,068 Development costs 2,308 2,344 Other adjustments (50) (65) Tax impact on adjustments and other income tax differences 135 125 Total adjustment 2,393 2,404 Total Equity in a
Slide 40: Europe Trucks Company performance Q2
Europe Trucks | Company performance (*) Europe: 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) Q2 2016 2017 2018 2019 MKT SHAR
Slide 41: Europe Trucks Company performance H1
Europe Trucks | Company performance (*) Europe: 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) H1 2016 2017 2018 2019 MKT SHAR
Slide 42: New Geographic Information
New Geographic Information Starting from Q1 2019 the composition of our regions part of the geographic information have been amended as follow: North America (formerly NAFTA): United States, Canada and Mexico; Europe (member countries of the European Union, European Free Trade Association, Ukraine,
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’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ abil
Slide 44: 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 Giovanni Somajni – Investor Relations Eur