Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — FY2017 Earnings Presentation
36 slides from Cnh Industrial's earnings presentation, Jan 30, 2018
Slide 1: Q4 & FY 2017 Results
Q4 & FY 2017 Results January 30, 2018 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: FY 2017 Highlights
FY 2017 | Highlights Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated (1) Non-GAAP measures (definition and reconciliation in appendix) (*) Subject to the approval at the AGM (expected on April 13, 2018), the ex-dividend date would be set at April 23, 2018) Net I
Slide 4: Q4 2017 Main Product Launches & Awards
Q4 2017 | Main Product Launches & Awards MACHINERY OF THE YEAR NEW LONG TERM SUPPLY AGREEMENTS (LNG & CNG PRODUCTS) DAILY BLUE POWER: “INTERNATIONAL VAN OF THE YEAR” ASABE NAMES INNOVATIONS FROM CASE IH AND NH AG TO 2018 AE50 LIST
Slide 5: FY 2017 Summary
FY 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 $26.2bn up 10.6% vs. last year Operating Margin at 5.8% vs. 5.5% last year $(0
Slide 6: Net Sales | Industrial Activities
Net Sales | Industrial Activities Net Sales split (1) BY REGION BY SEGMENT NAFTA EMEA LATAM APAC AG CE CV PT (1) Note: Net Sales: Excluding Other Activities, Unallocated Items & Adjustment & Eliminations BY CURRENCY EUR 45% USD 28% BRL 6% CAD 4% GBP 1% AUD 4% OTHER 12% Note: Numbers may not add due
Slide 7: Industrial Activities Operating Profit and Adjusted Net Income Walk
Industrial Activities Operating Profit and Adjusted Net Income Walk ($mn) 482 228 1 (6) 63 (37) 21 (97) 14 669 FY 2016 IA OP. PROFIT FS OP. PROFIT OP ELIM INTEREST EXP, NET (1) OTHER NET (1) JV INCOME (1) Taxes on change in PBT Change in Adj. ETR FY 2017 TAXES (1) CHANGE IN ADJUSTED NET INCOME 187 +
Slide 8: Cash Flow | Change in Net Industrial Debt
Cash Flow | Change in Net Industrial Debt FY ’17 Change in Net Industrial Debt 700 FY ’17 Net Industrial Cash Flow 1,289 ($mn) (*) Including $56mn in FY 2017 charge on repurchase/early redemption of Notes (1,561) 313 720 56 485 130 (488) 73 (193) (396) (*) (861) Dec 31, 2016 NET INCOME D&A CHARGE ON
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 CAPACITY EXPANSION & LT INVESTMENTS Cash inflow Cash outflow Cash inflow Cash outflow T
Slide 10: Financial Services
Financial Services (*) Including unconsolidated JVs Managed Portfolio (*) & Retail Originations (*) $24.8bn FY ’17 retail originations at $9.1bn, relatively flat compared to 2016. Managed portfolio* at $26.8bn, up $2.0bn compared to December 31, 2016 (up $0.6bn on a constant currency basis) $26.8bn
Slide 11: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 12/31/2017 2 Of which $0.8bn Restricted Cash Undrawn M/T Committed Lines Bank Debt Capital Market Cash Other 9.4 3.5 2.3 1.9 2.0 1.4 2.8 As of 12/31/17 2018 2019 2020 2021 2022 Beyond Available Liquidity ($bn) Debt Maturity
Slide 12: Industrial Activities Overview
Industrial Activities Overview
Slide 13: AG | Financial Results
AG | Financial Results Operating Profit walk Net Sales 818 120 102 (4) (53) (47) 13 949 FY 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER FY 2017 ($mn) CHANGE IN OPERATING PROFIT 131 +16.0% 8.1% 8.5% Favorable volume and product mix, in all regions except NAFTA Positive price realizatio
Slide 14: AG | Industry performance & Inventory management
AG | Industry performance & Inventory management | 0-140HP 6% | 140+ HP (1) 2% EMEA 2% LATAM 13% APAC 6% Industry Units (For FY 2017) Tractors (1) Included in row crop sector definition FY 2017 overproduction vs. retail at 2% NAFTA (140+/4WD) (1) underproduction vs. retail at 17% Production up 5% vs
Slide 15: AG | NAFTA Row Crop Channel Inventory
AG | NAFTA Row Crop Channel Inventory Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 (20%) vs. last year 3.2x 2.2x 1.8x US Industry – HHP Tractors Used to New Sales Ratio (1) US Industry – Combines Used to New Sales Ratio (1) 4.6x 3.8x 3.4x (1) Source: New sales data from AEM, used sales data from UCC database (
Slide 16: CE | Financial Results
CE | Financial Results Operating Profit walk 2 54 18 (28) (21) 11 (15) 21 FY 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER FY 2017 ($mn) 0.1% 0.8% CHANGE IN OPERATING PROFIT 19 +10.5x Higher volume and net price realization, partially offset by increases in raw material cost, unfavorab
Slide 17: CE | Industry performance & Inventory management
CE | Industry performance & Inventory management Light NAFTA 12% EMEA 12% LATAM 10% APAC 26% Industry Units (For FY 2017) Heavy NAFTA 9% EMEA 11% LATAM 16% APAC 54% Q4 2017 underproduction vs. retail at 3% Production up 52% vs. Q4 2016 Inventory Management (Light & Heavy) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 18: CV | Financial Results
CV | Financial Results Operating Profit walk Net Sales 333 9 (18) 22 3 (18) (59) 272 FY 2016 VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER FY 2017 ($mn) CHANGE VS FY 2016 TRUCKS 6.2% BUSES 20.3% OTHERS (1) 17.9% Net Sales at $10.4bn up 9.0% vs. last year (up 7.0% at constant currency) BY PR
Slide 19: CV | Industry performance & Inventory management
CV | Industry performance & Inventory management TRUCKS >3.5T EMEA (*) 5% LATAM (*) 16% APAC (*) 8% Industry Units (For FY 2017) Inventory Management (CV – All Equipment) FY 2017 – Europe Trucks MKT SHARE(1) CHG VS ‘16 ORDERS Chg. Y-o-Y DELIVERIES Chg. Y-o-Y B-TO-B Light (3.5-7.49t) 15.0% (0.3) p.p.
Slide 20: PT | Financial Results
PT | Financial Results Net Sales & Operating Profit CHANGE VS FY 2016 NAFTA 8.3% EMEA 15.9% LATAM 25.0% APAC 26.2% BY REGION Chg. vs. FY ’16 ENGINES 606.7k 13% TRANSMISSIONS 70.4k (6%) AXLES 193.9k 2% Units Sold Engines sold to third party at 54% vs. 57% in FY 2016 Net Sales at $4.4bn up 18% vs. las
Slide 21: FY 2018E US GAAP Financial Targets
FY 2018E US GAAP Financial Targets
Slide 22: FY 2018E | Industry Units
FY 2018E | Industry Units TRACTORS COMBINES LIGHT HEAVY TRUCKS >3.5T NAFTA Flat - 5% ~ 10% Flat - 5% Flat – 5% - Flat – 5% EMEA ~ 5% Flat – 5% Flat Flat (5%) - Flat LATAM Flat – 5% ~ 5% 5% - 10% 5% - 10% 10% - 15% APAC Flat Flat - 5% Flat - 5% Flat - 5% (5%) - Flat AG CE 0-140 HP 140+ HP 1 Reflects
Slide 23: FY 2018E | US GAAP Financial Targets
FY 2018E | 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 2018E Guidan
Slide 24: Appendix
Appendix
Slide 25: Reconciliation of Operating Profit (loss) to Net Income (Loss) under US GAAP
Reconciliation of Operating Profit (loss) to Net Income (Loss) under US GAAP In the year ended December 31, 2017, Interest expenses includes the charge of $56 million related to the repurchase/early redemption of notes. In the three months and year ended December 31, 2016, this item included the cha
Slide 26: Q4 & FY 2017 Reconciliation of Adj. net income and Adj. income taxes
Q4 & FY 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 FY 2017 FY 2016 Q4 2017 Q4 2016 313 (249) Net income (loss) (40) 96 249 689 Adjustments impacting Income (loss) before
Slide 27: Q4 & FY 2017 Reconciliation of Adj. net income and Adj. income taxes
Q4 & FY 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 FY 2017 FY 2016 Q4 2017 Q4 2016 (a) Adjustments impacting Income (loss) before income tax (expense) and equity in incom
Slide 28: Net Income / (Loss) US GAAP to Profit / (Loss) 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. (46) (0.03) 95 0.07 295 0.22 (252) (0.18) Plus: Net Income / (Loss) attributable to non-controlling interest 6 1 18 3 Net Income / (
Slide 29: Total Equity – US GAAP to EU-IFRS Reconciliation
Total Equity – US GAAP to EU-IFRS | Reconciliation Dec 31 2017 Dec 31 2016 Total Equity in accordance with US GAAP 4,400 4,451 Development costs 2,477 2,374 Other adjustments (112) (121) Tax impact on adjustments (645) (655) Deferred tax assets and tax contingencies recognition 726 585 Total adjustm
Slide 30: Reconciliation of Total Debt to Net Debt (US GAAP)
Reconciliation of Total Debt to Net Debt (US GAAP) (1) Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of $935 million and $997 million as of December 31, 2017 and 2016, respectively. Total Debt of Financial Services includes Intersegment notes payable t
Slide 31: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt Dec 31, 2017 Dec 31, 2016 Total Debt (1) (25,895) (25,276) Financial Services Third Party Debt 19,434 18,582 Intersegment Note Payables (935) (997) Intersegment Note Receivables 1,641 1,479 Cash and cash equivalents 4,901 4,649 Restricted cash - - Derivatives h
Slide 32: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding Dec 31, 2017 2018 2019 2020 2021 2022 Beyond 4.2 Bank Debt 1.4 1.0 1.2 0.2 0.2 0.2 9.4 Capital Market 1.9 1.2 0.6 1.8 1.2 2.7 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.0 13.9 Cash Portion of Debt Maturities 3.5 2.3 1.9 2.0 1.4 2.8 6.2 Cash & Cash Equivalents
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)
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