Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q3 2015 Earnings Presentation
42 slides from Cnh Industrial's earnings presentation, Oct 29, 2015
Slide 1: Q3 & Sep YTD 2015 Results Review
Q3 & Sep YTD 2015 Results Review October 29th, 2015 Exhibit 99.2
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures Q3 & Sep YTD 2015 Results Review October 29th, 2015 All statements other than statements of historical fact contained in this earning release including statements regarding our: competitive strengths; business strategy; future financial position or operating res
Slide 3: Financial Highlights
Financial Highlights
Slide 4: Q3 2015 Highlights
Q3 2015 Highlights Consolidated Industrial Activities Net Sales at $5.5bn, down 13.3% on a constant currency basis (down 25.0% as reported) Operating Profit at $245mn, down 48.9% on a constant currency basis (down 53.1% as reported) with margin at 4.4% Net Industrial Debt as of September 30, 2015 at
Slide 5: Q3 2015 Industrial Activities Net Sales Composition & by Segment
2,522 841 3,659 1,025 2,637 647 2,740 949 2,189 591 2,431 800 5,549 6,419 (984) (870) Agricultural Equipment Commercial Vehicles Powertrain Construction Equipment (13.3%) (11.7%) Q3 2015 Industrial Activities (Net Sales Composition & by Segment) Q3 & Sep YTD 2015 Results Review October 29th, 2015 7,
Slide 6: Q3 2015 Industrial Activities Operating Profit Composition & by Segment
Q3 2015 Industrial Activities (Operating Profit Composition & by Segment) Q3 & Sep YTD 2015 Results Review October 29th, 2015 Operating Profit Composition ($Mn) Operating Profit By Segment ($Mn) Operating Profit at $245mn, down 48.9% on a constant currency basis with margin at 4.4%, down 2.7 p.p. fr
Slide 7: Q3 2015 From Operating Profit to Net Income
Q3 2015 From Operating Profit to Net Income ($mn) Q3 2015 Q3 2014 Δ Industrial Activities Operating profit 245 522 (277) Financial Services Operating profit 128 121 7 Elimination & Other (85) (81) (4) Operating Profit 288 562 (274) Restructuring expenses (18) (56) 38 Interest expenses of Industrial
Slide 8: Q3 2015 Focus on Interest expenses of Industrial Activities
Q3 2015 Focus on Interest expenses of Industrial Activities Q3 & Sep YTD 2015 Results Review October 29th, 2015 Interest expenses was $118mn in Q3 2015, down $32mn or 21% from Q3 2014 ($341mn down 24% at Sep YTD) Average Gross Industrial Debt was down 11% in the quarter and at Sep YTD respectively G
Slide 9: Q3 2015 Cash Flow – Change in Net Industrial Debt
Q3 2015 Cash Flow – Change in Net Industrial Debt Q3 & Sep YTD 2015 Results Review October 29th, 2015 (128)(*) 166 157 (*) (3,306) (150) (99) 0 222 (**) Jun 30, 2015 Net Income D&A Change in Funds & Others Change in WC Tangible & Intangible Capex Change in Investment, Scope & Other Capital Increase,
Slide 10: Cash Flow Change in WC and focus on Agricultural Equipment Wholegoods Inventory
Cash Flow Change in WC and focus on Agricultural Equipment Wholegoods Inventory Change in Working Capital Focus on AG Wholegoods Inventory * (US GAAP, $/mn) Increase in working capital related to lower payables due to the production shutdown in the quarter Company Inventory Sep ‘15 Company inventory
Slide 11: Q3 2015 Industrial Activities - Capex breakdown
Q3 2015 Industrial Activities - Capex breakdown By Category By Segment 246 -39% 150 Total Capex ($mn) Delta % Q3 ’15 vs. Q3 ‘14 Q3 & Sep YTD 2015 Results Review October 29th, 2015
Slide 12: Q3 2015 Financial Services performance
Q3 2015 Financial Services performance Key Highlights Net Income ($mn) (*) Including unconsolidated JVs (**) RoA defined as: PBT / average managed assets annualized 75 94 +25.3% Delta % Q3 ’15 vs. Q3 ‘14 Net income was $94mn, up $19mn compared to Q3 2014 Reduction in SG&A expenses, primarily driven
Slide 13: Q3 2015 Liquidity & Debt Maturity
Q3 2015 Liquidity & Debt Maturity (September 30th, 2015) Company Available Liquidity Available Liquidity ($bn) Debt Maturity Schedule1 ($bn) 1 Represents cash portion of debt maturities as of 09/30/2015 2 Of which $0.8bn ABS related & Restricted Cash Available liquidity at Sep. 30, 2015 was $7.4bn,
Slide 14: Industrial Activities Overview
Industrial Activities Overview
Slide 15: Agricultural Equipment Q3 2015 Financial Results
Agricultural Equipment Q3 2015 Financial Results Net Sales by Region & Product ($) 433 (369) 7 23 38 28 (23) 137 11.8% 5.6% Operating Profit at $137mn, margin at 5.6% Operating decremental margin at 24% Net price realization Volumes and Mix, primarily in the NAFTA row crop sector, including negative
Slide 16: Agricultural Equipment Inventory management
Agricultural Equipment Inventory management (units of equipment) – Industry units (*) Excluding Joint Ventures / Source: CNH Industrial Internal Data Q3 2015 FY 2015E 0-40 HP 8% Flat 40-140 HP (2%) Flat to 5% 140+ HP (44%) (20%) to (25%) NAFTA Flat Flat to (5%) EMEA (8%) Flat to (5%) LATAM (34%) (20
Slide 17: Agricultural Equipment Management actions and Main Industry drivers
Agricultural Equipment Management actions and Main Industry drivers Delta % Q3 ’15 vs. Q3 ‘14 Q3 Management Actions Industry drivers Total Row Crop Production (44%) YTD NAFTA Row Crop Production Fourth consecutive quarter of double digit y-o-y slowdown in row crop segment production coupled with cos
Slide 18: Construction Equipment Q3 2015 Financial Results
Construction Equipment Q3 2015 Financial Results Net sales were $591mn down 23.1% on a constant currency basis (down 29.7% as reported) 39 4.6% (34) 11 10 9 4 (2) 37 Operating Profit at $37mn vs. $39mn last year, margin at 6.3% up 1.7 p.p. Net Sales by Region & Product ($) Operating Profit Walk ($Mn
Slide 19: Construction Equipment Inventory management
Construction Equipment Inventory management (units of equipment) – Industry units LATAM underproduction vs. retail at 9% and production level down 48% from Q3 ’14 Note: As of Q2 2014, industry volume data for Heavy Construction Equipment includes compaction equipment, which historically was not in t
Slide 20: Commercial Vehicles Q3 2015 Financial Results
Commercial Vehicles Q3 2015 Financial Results Operating Profit at $60mn up $40mn vs. last year, margin at 2.7% New products with improved quality and industrial efficiencies Regulatory R&D Net Sales by Region & Product ($) Operating Profit Walk ($Mn) Q3 2015 Book to Bill at 0.89 down 0.06 vs. last y
Slide 21: Commercial Vehicles Inventory management
Commercial Vehicles Inventory management (units of equipment) – Industry units Commercial Vehicles (All Equipment) Third quarter overproduction vs. retail at 6% primarily in EMEA * Reflects aggregate for key markets where the Company competes: EMEA: 28 member countries of the European Union,; LATAM:
Slide 22: Commercial Vehicles European Market share & New product launches
Commercial Vehicles European Market share & New product launches European Truck market share at 11.4% up 1.2 p.p. vs. Q3 2014 EU28 – Q3 ’15 Market Share (%) Light Heavy 11.4% 31.5% 7.6% Light at 11.4% up 1.4 p.p. vs. Q3 2014 (Sep YTD up 0.7 p.p. to 11.2%) Medium at 31.5% up 5.0 p.p. vs. Q3 2014 (Sep
Slide 23: Powertrain Q3 2015 Financial Results
Powertrain Q3 2015 Financial Results Q3 2015 third party Net sales at 44% vs. 39% in Q3 2014 Key Highlights Net Sales by Region & Product ($) Net sales were $800mn, down 7.4% on a constant currency basis compared to 2014 (down 22.0% as reported) On lower volumes mainly in captive portion of the busi
Slide 24: Powertrain Units Sold
Powertrain Units Sold (% change y-o-y) ENGINES TRANSMISSIONS AXLES Engines sold to third party at 54% vs. 45% in Q3 2014 Key Highlights Units sold by business line Engines down 16% to 112.5k units (CV 31%, AG 11%, CE 4% and 54% to external customers); third party sales up 1.4% compared to Q3 2014 Tr
Slide 25: 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 Q3 & Sep YTD 2015 Results Review October 29th, 2015 CNH In
Slide 26: FY 2015E US GAAP Financial Targets
FY 2015E US GAAP Financial Targets
Slide 27: FY 2015E US GAAP Financial Targets
FY 2015E US GAAP Financial Targets Q3 & Sep YTD 2015 Results Review October 29th, 2015 The Company expects that continued demand weakness primarily in LATAM and ongoing strength of the U.S. dollar will have a negative impact on the revenue levels previously forecasted for the fourth quarter of 2015.
Slide 28: Appendix
Appendix
Slide 29: Q3 2015 Results highlights (IFRS & US GAAP)
Q3 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 2,431 (1,228) 2,431 (1,228) 66 (332) 137 (296) 2.7% 5.6% Construction Equipment 591 (250)
Slide 30: Sep YTD 2015 Results highlights (IFRS & US GAAP)
Sep YTD 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 8,043 (3,758) 8,043 (3,758) 434 (1,017) 604 (925) 5.4% 7.5% Construction Equipment 1
Slide 31: Sep YTD 2015 From Operating Profit to Net Income
Sep YTD 2015 From Operating Profit to Net Income ($mn) Sep YTD 2015 Sep YTD 2014 Δ Industrial Activities Operating profit 869 1,612 (743) Financial Services Operating profit 397 407 (10) Elimination & Other (227) (255) 28 Operating Profit 1,039 1,764 (725) Restructuring expenses (52) (98) 46 Interes
Slide 32: Efficiency Program – quarterly update
Q3 & Sep YTD 2015 Efficiency Program – quarterly update Q3 2015 Sep YTD 2015 Program to date Total charges $17mn* $50mn $234mn Agricultural Equipment $7mn $16mn $59mn Construction Equipment $3mn $3mn $42mn Commercial Vehicles $7mn $31mn $133mn Q3 & Sep YTD 2015 Results Review October 29th, 2015 * $1
Slide 33: Net Income to Net Income before Restructuring and Exceptional Items
Q3 & Sep YTD 2015 Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) Third Quarter Sep YTD 2015 2014 2015 2014 Net Income / (Loss) (128) 162 17 621 Restructuring expenses, net of tax 16 52 45 88 Other exceptional items, net of tax 150 - 150 64 Net In
Slide 34: Operating Profit US GAAP to Trading Profit IFRS Reconciliation
Q3 & Sep YTD 2015 Operating Profit US GAAP to Trading Profit IFRS - Reconciliation The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading Profit under IFRS: Third Quarter Sep YTD 2015 % of Net Sales 2014 % of Net Sales 2015 % of Net Sales 2014 % of Net Sales US GAAP - I
Slide 35: Net Income US GAAP to Profit under IFRS Reconciliation
Q3 & Sep YTD 2015 Net Income / (Loss) US GAAP to Profit / (Loss) under IFRS - Reconciliation The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: Third Quarter Sep YTD 2015 EPS 2014 EPS 2015 EPS 2014 EPS Net Income / (Loss) attributable to CNH Industrial N.V. (124)
Slide 36: Total Equity – US GAAP to IFRS Reconciliation
Sep. 30, 2015 Total Equity – US GAAP to IFRS Reconciliation Sep. 30, 2015 Dec. 31, 2014 Total Equity in accordance with US GAAP 4,451 4,961 (a) Development costs, net 2,614 2,819 (b) Goodwill and other intangible assets (116) (122) (c) Defined benefit plans (46) (6) (d) Restructuring provision (6) (
Slide 37: Cash Flow – Change in Net Industrial Debt (US GAAP)
Q3 & Sep YTD 2015 Cash Flow – Change in Net Industrial Debt (US GAAP) (*) Excluding assets sold under buy-back commitments and assets under operating lease (US$/mn) Q3 2015 Q3 2014 Δ Sep YTD 2015 Sep YTD 2014 Δ Net Debt of Industrial Activities at the beginning of period (3,016) (3,692) 676 (2,691)
Slide 38: Q3 2015 Gross Debt - Breakdown
Q3 2015 Gross Debt - Breakdown June 30, 2015 September 30, 2015 Industrial Financial Services Industrial Financial Services 2.8 2.5 Bank Debt 2.5 2.0 5.0 4.1 Capital Market 5.0 3.9 0.2 0.1 Other Debt 0.2 0.1 8.0 6.6 Cash Maturities 7.7 5.9 0.0 10.3 ABS / Securitization 0.0 10.6 0.0 0.8 Warehouse Fac
Slide 39: Q3 2015 Debt Maturity Schedule - Breakdown
Q3 2015 Debt Maturity Schedule - Breakdown Outstanding Sep. 30, 2015 3M 2015 2016 2017 2018 2019 Beyond 4.5 Bank Debt 0.5 1.8 0.7 0.7 0.5 0.2 8.9 Capital Market 0.9 0.9 2.1 2.6 1.7 0.8 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 13.6 Cash Portion of Debt Maturities 1.5 2.7 2.8 3.3 2.2 1.1 (4.5) Cash & Ma
Slide 40: Geographic Information
Geographic Information 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 South America,
Slide 41: 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 42: Investor Relations Team
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 Q3 & Sep YTD 2015 Results Review Octobe