Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q2 2021 Earnings Presentation
43 slides from Cnh Industrial's earnings presentation, Jul 30, 2021
Slide 1: CNHI | Q2 2021 Results Review
CNHI | Q2 2021 Results Review July 30th, 2021
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures 2 All statements other than statements of historical fact contained in this presentation including statements under “2021 Outlook” and statements regarding our future responses to and effects of the COVID-19 pandemic; competitive strengths; business strategy; fu
Slide 3: Second Quarter | Summary
Second Quarter | Summary 3 Top line and Profit, solid net sales performance and margin improvements across all segments on the back of strong market demand in all regions Supply Chain, multiple disruptions and raw material inflation has continued, offset by positive pricing and extraordinary measure
Slide 4: Second Quarter | Industry Unit Performances vs. Q2 2020
Second Quarter | Industry Unit Performances vs. Q2 2020 4 North America Europe South America Rest of World Worldwide 0-140 HP 3% Tractors 31% 38% 38% 28% 140+ HP 49% Combines 10% 13% 38% 12% 14% Light 42% 33% 83% (2%) 21% Heavy 40% 43% 114% (6%) 6% LCV - 40% 73% 33% 39% M&H - 61% 80% 56% 62% Buses -
Slide 5: Second Quarter | WW CNH Industrial Unit Statistics
Second Quarter | WW CNH Industrial Unit Statistics 5 TRACTORS COMBINES Order book in AG up 2.5x vs last year (Tractors up 2.4x and Combines up 3.3x). North America HHP Tractors up 5.6x and Combines up 4.6x Q120 Q220 Q320 Q420 Q121 Q221 Q120 Q220 Q320 Q420 Q121 Q221 LIGHT HEAVY Order book up 2.8x vs.
Slide 6: Second Quarter | Financial Highlights
Second Quarter | Financial Highlights 6 Net Sales % chg. y-o-y Net Sales at $8.5bn up 55% at constant currency, with solid performance from all segments Higher volumes driven by strong industry demand and favorable price realization $8.5bn +65% Industrial Activities Gross Margin bps chg. y-o-y Gross
Slide 7: Second Quarter | Industrial Activities Net Sales vs. Q2 2020
Second Quarter | Industrial Activities Net Sales vs. Q2 2020 7 AG CE C&SV PT Industrial Activities (1) $3,970mn $808mn $3,220mn $1,287mn $8,490mn +56% +49% @CC +92% +86% @CC +85% +71% @CC +69% +55% @CC +65% +55% @CC Q2 2021 By Region By Region By Region By Region By Region As reported As reported As
Slide 8: Second Quarter | Ind. Activities Adj EBIT walk (Driver & Segment)
Second Quarter | Ind. Activities Adj EBIT walk (Driver & Segment) 8 8.2% (1.1%) (58) 799 375 (205) (128) (108) 55 (31) 699 Adj. EBIT (1) UNALLOCATED, Adj. EBIT (1) VOL & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Q220 ELIM & OTHER Q221 Gross Adj EBIT Margin Margin Walk by Segment AG 361 226 (131)
Slide 9: Second Quarter | Financial Services
Second Quarter | Financial Services 9 ($mn) Net Income Profitability Ratios 3.5% 3.4% 3.3% 3.3% Q2 2021 99 2.2% 1.9% 2.0% 1.2% Q2 2020 53 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 Gross Margin / Average Assets on Book ROA (**) Managed Portfolio (*) & Retail Originations (*) Delin
Slide 10: Second Quarter | Free Cash Flow and Debt Maturity Profile
Second Quarter | Free Cash Flow and Debt Maturity Profile 10 ($mn) Industrial Activities | Free Cash Flow (*) 921 (178) 272 121 (132) 4 1,008 CASH INTEREST CHG IN CHG IN PROVISIONS. & IA | ADJ EBITDA PP&E CAPEX (2) OTHER CHANGES IA FREE CASH FLOW AND TAXES WORKING CAPITAL OTHERS (1) Δ vs. 761 (140)
Slide 11: FY 2021E Updated Guidance
FY 2021E Updated Guidance Corporate Presentation 2017
Slide 12: Full Year 2021E | Industry Unit Performances vs. FY 2020
Full Year 2021E | Industry Unit Performances vs. FY 2020 12 North America Europe South America Rest of World Worldwide 0-140 HP ~ 15% Tractors 10-15% ~ 20% 10-15% ~ 15% 140+ HP 20% Combines 20% ~ 5% 15-20% 15% 15% Light ~ 25% 10% 40 - 45% ~ FLAT ~ 10% Heavy 15-20% 15-20% ~ 55% ~ 5% ~ 10% LCV - 15-20
Slide 13: FY 2021E Guidance
FY 2021E Guidance 13 Previous Guidance Updated Guidance (As of May 5th, 2021) Net Sales (*) Up between Up between (including currency translation effects) 14% and 18% 24% and 28% Industrial Activities SG&A ≤ 7.5% of Net Sales Confirmed Positive between Positive in Free Cash Flow (1) $0.6bn / $1.0bn
Slide 14: Q2 2021 Final Remarks
Q2 2021 Final Remarks Corporate Presentation 2017
Slide 15: Agriculture | Raven Industries, Inc. Acquisition
Agriculture | Raven Industries, Inc. Acquisition 15 Key Levers for Value Creation Expands on long partnership built between CNHI and Raven Maximize Value of Raven’s Leading innovation capabilities focused on autonomous and precision Ag Existing Technology technology Leverage Raven’s capabilities acr
Slide 16: IVECO | New product launches
IVECO | New product launches 16 IVECO Driver Pal New IVECO S-Way New Daily New Daily Minibus The cutting-edge project from IVECO, the 100% connected truck takes the smart vehicle that future-proofs the minibus that takes passenger built on Amazon Web Services (AWS) fuel efficiency and driver-centric
Slide 17: Spin-Off
Spin-Off 17 Scott W. Wine Gerrit Marx CEO CNH Industrial NV Designated CEO On-highway business Designing organizations with the objective to create two agile companies July 30th, 2021 Q2 2021 Results Review
Slide 18: Spin-Off – Timeline confirmed for Q1 2022
Spin-Off – Timeline confirmed for Q1 2022 18 EXTRAORDINARY GENERAL MEETING QUARTERLY RESULTS & SPIN POSTPONED ANALYSTS’ CALL CONFERENCE DUE TO COVID (May 5th) QUARTERLY RESULTS & ANALYSTS’ CALL CONFERENCE DAY 1 (November 4th) 2020 Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’21 Q1 ’22 REGULATORY ANNUAL APPROVALS GENERA
Slide 19: FY 2021E | CEO Takeaway messages
FY 2021E | CEO Takeaway messages 19 Investing to evolve and improve business Solid orders/macro indicators suggest strong demand will continue in all segments Expect additional costs in H2 2021 as we ramp production Continued focus on managing supply chain, mitigating inflation, improving logistics
Slide 20: Appendix
Appendix INDUSTRIAL
Slide 21: Second Quarter 2021 | Financial Summary
Second Quarter 2021 | Financial Summary 21 Q2 2021 Q2 2020 Δ U.S. GAAP Revenues ($mn) 8,911 5,578 60% Net Sales | Industrial Activities ($mn) 8,490 5,150 65% Net Income ($mn) 699 361 338 Diluted EPS ($) 0.51 0.26 0.25 Non – GAAP (1) Net Sales | Industrial Activities @CC ($mn) 8,005 5,150 55% Adjuste
Slide 22: Second Quarter 2021 | Financials by Segment
Second Quarter 2021 | Financials by Segment 22 REVENUES GROSS PROFIT Adj. EBIT Adj. EBIT Margin % D&A Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 AG 3,970 2,541 955 474 582 203 14.7% 8.0% 65 62 CE 808 420 100 (34) 24 (87) 3.0% (20.7%) 9 12 C&SV 3,220 1,739 402 43 100 (156) 3.1% (9.0%
Slide 23: Second Quarter 2021 | Net Sales and Adj EBIT breakdown
Second Quarter 2021 | Net Sales and Adj EBIT breakdown 23 Net Sales Split AG CE C&SV PT Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 Q2 21 Q2 20 NA 1,286 896 NA 372 161 NA n.m. n.m. NA 43 23 EU 1,401 937 EU 171 89 EU 2,557 1,391 EU 906 454 SA 566 312 SA 117 71 SA 296 110 SA 94 24 RoW 717 396 RoW 148 99 RoW 3
Slide 24: First Half 2021 | Financial Summary
First Half 2021 | Financial Summary 24 H1 2021 H1 2020 Δ U.S. GAAP Revenues ($mn) 16,384 11,039 48% Net Sales | Industrial Activities ($mn) 15,533 10,143 53% Net Income ($mn) 1,124 307 817 Diluted EPS ($) 0.81 0.21 0.60 Non – GAAP (1) Net Sales | Industrial Activities @CC ($mn) 14,800 10,143 46% Adj
Slide 25: First Half 2021 | Financials by Segment
First Half 2021 | Financials by Segment 25 REVENUES GROSS PROFIT Adj. EBIT Adj. EBIT Margin % D&A H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 AG 7,008 4,785 1,664 817 981 227 14.0% 4.7% 127 126 CE 1,464 842 194 (43) 49 (170) 3.3% (20.2%) 18 25 C&SV 6,025 3,760 729 210 176 (212) 2.9%
Slide 26: First Half 2021 | Net Sales and Adj EBIT breakdown
First Half 2021 | Net Sales and Adj EBIT breakdown 26 Net Sales Split AG CE C&SV PT H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 NA 2,344 1,725 NA 652 331 NA n.m. n.m. NA 83 49 EU 2,425 1,720 EU 300 180 EU 4,792 3,022 EU 1,768 1,010 SA 964 602 SA 206 137 SA 487 231 SA 172 72 RoW 1,275 738 RoW 306
Slide 27: Capex and R&D
Capex and R&D (1) 27 ($mn) Q2 Q2 H1 H1 2021 2020 2021 2020 Investments in property, plant and equipment, and intangible assets (1) 132 69 202 132 Breakdown by Category NEW PRODUCT & TECHNOLOGY 46% 52% 48% 54% MAINTENANCE & OTHER 47% 46% 46% 44% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 7% 2% 6%
Slide 28: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown 28 ($mn) Outstanding Jun 30, 2021 6M 2021 2022 2023 2024 2025 Beyond 3.1 Bank Debt 0.9 1.4 0.3 0.2 0.1 0.1 10.1 Capital Market 1.2 0.9 1.9 1.5 0.9 3.7 0.3 Other Debt 0.1 0.2 0.0 0.0 0.0 0.0 13.5 Cash Portion of (Debt) Maturities 2.2 2.5 2.2 1.7 1.1 3.8 of which Ind
Slide 29: Europe Trucks | Company performance (Q2)
Europe Trucks | Company performance 29 Q2 2018 2019 2020 2021 MKT SHARE(1) Light (3.5-7.49t) 14.1% 12.6% 9.9% 13.4% M&H (≥7.5t) 8.5% 6.3% 8.3% 9.1% Europe (*) 12.1% 10.2% 9.4% 12.1% B-TO-B Light (3.5-7.49t) 0.80 0.89 1.11 1.07 M&H (≥7.5t) 0.78 0.96 1.17 1.74 Europe (*) 0.79 0.91 1.12 1.22 Δ 18/19 Δ
Slide 30: Europe Trucks | Company performance (H1)
Europe Trucks | Company performance 30 H1 2018 2019 2020 2021 MKT SHARE(1) Light (3.5-7.49t) 14.0% 12.8% 10.9% 12.7% M&H (≥7.5t) 8.4% 6.2% 8.4% 8.7% Europe (*) 11.9% 10.3% 10.1% 11.5% B-TO-B Light (3.5-7.49t) 1.04 1.04 1.33 1.47 M&H (≥7.5t) 0.92 1.03 1.22 1.72 Europe (*) 1.01 1.04 1.30 1.53 Δ 18/19
Slide 31: Reconciliations
Reconciliations INDUSTRIAL
Slide 32: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (Q2 2021)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 32 Q2 2021 Unallocated Industrial ($mn) AG CE CV PT Items, Elim. & Activities Other Consolidated Net income 699 Less: Consolidated Income tax (expense) benefit (188) Consolidated Income before taxes 887 Less: Financial Services Fi
Slide 33: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (Q2 2020)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 33 ($mn) Q2 2020 Unallocated Industrial AG CE CV PT Items, Elim. & Activities Other Consolidated Net income (loss) 361 Less: Consolidated Income tax (expense) benefit 40 Consolidated Income (loss) before taxes 321 Less: Financial
Slide 34: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (H1 2021)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 34 H1 2021 Unallocated Industrial ($mn) AG CE CV PT Items, Elim. & Activities Other Consolidated Net income 1,124 Less: Consolidated Income tax (expense) benefit (345) Consolidated Income before taxes 1,469 Less: Financial Service
Slide 35: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (H1 2020)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 35 ($mn) H1 2020 Unallocated Industrial AG CE CV PT Items, Elim. & Activities Other Consolidated Net income (loss) 307 Less: Consolidated Income tax (expense) benefit 63 Consolidated Income (loss) before taxes 244 Less: Financial
Slide 36: Reconciliation of Adj. net income to Net Income
Second Quarter 2021 36 Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) ($mn) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP H1 2021 H1 2020 Q2 2021 Q2 2020 1,124 307 Net income 699 361 Adjustments impactin
Slide 37: Reconciliation of Adj. net income: adjustments detail
Second Quarter 2021 37 Reconciliation of Adj. net income and Adj. income tax (expense) benefit to Net Income (loss) and Income tax (expense) ($mn) benefit and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP H1 2021 H1 2020 Q2 2021 Q2 2020 (a) Adjustments impacting Income (loss) before in
Slide 38: Reconciliation of Total Debt to Net Debt (US GAAP)
Reconciliation of Total Debt to Net Debt (US GAAP) 38 ($mn) Consolidated Industrial Activities Financial Services June 30, December 31, June 30, December 31, June 30, December 31, 2021 2020 2021 2020 2021 2020 Third party debt (24,512) (26,053) (6,184) (7,271) (18,328) (18,782) Intersegment notes pa
Slide 39: Reconciliation of Operating Cash Flow to Free Cash Flow
Second Quarter 2021 39 Reconciliation of Net cash provided by (used in) Operating Activities to Free cash flow of Industrial Activities under U.S. GAAP ($mn) Q2 2021 Q2 2020 H1 2021 H1 2020 Net cash provided by (used in) Operating Activities 999 1,067 1,371 535 Less: Cash flows from Operating Activi
Slide 40: Reconciliation of Cash to Available Liquidity
Second Quarter 2021 40 Reconciliation of Cash and cash equivalents to Available liquidity under U.S.-GAAP ($mn) June 30, 2021 December 31, 2020 Cash and cash equivalent 7,820 8,785 Restricted cash 764 844 Undrawn committed facilities 5,677 6,148 Other current financial assets(1) 162 94 Available liq
Slide 41: Geographic Information
Geographic Information 41 The composition of our regions part of the geographic information is as follow: ▪ North America: United States, Canada and Mexico; ▪ Europe: member countries of the European Union, European Free Trade Association, Ukraine, and Balkans; ▪ South America: Central and South Ame
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures 42 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’ a
Slide 43: Investor Relations Team
Investor Relations Team ▪ 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 Europe +44 (207) 76 - 60369 e-mail: investor.relations@cnhind.co