Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q2 2015 Earnings Presentation
41 slides from Cnh Industrial's earnings presentation, Jul 29, 2015
Slide 1: Q2 & H1 2015 Results Review
Exhibit Q2 July&29th, H199.2 2015 2015Results Review
Slide 2: Safe Harbor Statement
Safe or management (GAAP). “intend”, are results materially goods-related compliance interest refinance Sumitomo including concerning U.S. the Forward-looking Industrial reliance anticipated from otherwise. with All July 2Results operating outside information statements future 29th, Harbor the GAAP
Slide 3: Financial Highlights
SS : Financial Highlights
Slide 4: Q2 2015 Consolidated Highlights
Q2 2015 Revenues Consolidated Liquidity Industrial Net Operating 31, July2014 income Sales 29th,Highlights Net as Activities at 2015 Profit at $6.6bn, of $7.0bn, Industrial $122mn, June Q2 at $401mn, &30, down H1Cash down 2015 2015 10% down Flow at $236mn Results on $7.8bn 37.9% apositive constant v
Slide 5: Q2 2015 Income Statement From Operating Profit to Net Income
Q2 2015 From ($mn) Industrial Financial Elimination Operating Restructuring Interest Other, Income Equity Net ($) EPS Basic July Income 29th, (basic) (diluted) Operating EPS Q2 net intaxes expenses before income Services Activities 2015 (93) Profit before /122 attributable 0.09 &(Loss) (126) 0.09 ex
Slide 6: Q2 Cash Flow and Change in Net Industrial Debt
174 Q2 Cash 413 (3,016) (3,051) (61) (136) 122 2015 729th, Flow Positive (205) July (279) – Change Change 2015 Q2 &inH1 Net in Working Industrial 2015 Capital ofDebt Results $413mn, Review 6up $146mn vs. Q2 2014, driven by reduction in inventory primarily in Agricultural Equipment and the increase i
Slide 7: Industrial Activities Cash Flow and Net Debt Change
CASH OPERATING Cash Q4 Q3 Q1 -3 Q2 due Maintained 2014 Net July -2‘14 CHANGE ‘15 industrial to Industrial 29th, -1 and from absorption decline FROM 648 (899) 1,655 (504) 832 (1,672) (205) (374) 0 2015) 12015 /2a(used (279) 636 steady cash ACTIVITIES Debt Cash in IN / Q2 (USED Cash AG NET 70 in) flow
Slide 8: Industrial Activities Capex Breakdown
Industrial TOTAL Q2 136 -32% 200 New Maintenance 42% 46% LT BY Agricultural 12% Construction 30% Commercial Delta 6% Powertrain July Investments 2015 2014 CATEGORY SEGMENT 29th, Industrial 52% Products % CAPEX Q2 Q2 Activities—Capex 2015 ’15 Equipment Vehicles 2015 & Equipment &Capacity Other Q2 vs.
Slide 9: Financial Services Key Highlights
Financial NET 105 -6.7% KEY Net Negative Retail Managed Delinquencies Q2 Gross RoA Delta (**) July2015 2014 ’14 ’15 income 98 RoA 29th, ** INCOME HIGHLIGHTS % Margin originations Profitability =Q2 Q2 impact portfolio* Services defined 2.1% 2015 was ’15 2015 /on-book Average Q2 vs. $98mn, ofas: perfo
Slide 10: Debt Maturity Schedule and Available Liquidity
Q2Of Debt Liquidity $2.5 $3.4 $7.8 $1.1 $2.2 As 2014 Capital COMPANY Available $7.2bn Cash activities Proceeds 2018, LLC $5.0bn $2.8bn credit NET Dec. 0.0 2.0 (1.8) 4.0 6.0 Net 21$0.7bn July Represents of 06/30/2015 2015 Intersegment 29th, $2.6 which ‘12 (at INTERSEGMENT Maturity Undrawn generation
Slide 11: Industrial Activities Overview
Industrial Activities Overview 11
Slide 12: Industrial Activities Net Sales Walk
(US (853) 1,250 7,711 8,564 2,704 931 3,025 (10%) 3,384 4,436 Q2’ Agricultural 421 678 (257) (37.9%) Industrial currency Impact Q1 Q2 $BRL AUD, 11% Other, GBP, CAD, BRL, USD, (*) Note: July / AUD €Quarterly GBP 2015 ‘14 ’14 ‘15 14 2,470 401 GAAP, 29th, 1.370 /2% 1,164 (20) 6% Net Numbers (1,077) 3,0
Slide 13: Industrial Activities Net Sales and Operating Profit by Segment
Industrial NET 3,035 4,436 6,634 8,564 2,704 931 -31.6% -20.5% (757) (23.7%) Y-o-Y OPERATING Q2 -58.4% -40.9% 263 401 632 678 28 n.m. 25% Agricultural Equipment 8.7% 14.2% 2015 July 35 2015 2014 740 29th, -17.2% (21) SALES Operating 4.7% (558) -22.5% 2,470 64 % 3.0% -8.7% -24.2% 67 (14.8%) 1,250 Q2
Slide 14: Agricultural Equipment Q2 Results
Agricultural NET 10% 13% 38% 21% Other Combines Tractors 55% 24% 39% APAC LATAM Volumes Net OPERATING 19 14.2% 632 29 (373) Q2 8.7% Mix Positive primarily industrial Cost purchasing time hedge Operating July 23 16 2015 ‘14 sales pricing 29th, negative NAFTA EMEA control SALES (83) 263 positions Volu
Slide 15: Agricultural Equipment Inventory and Production
Agricultural Inventory Q2-13 Second Company Industry 0-40 40-140 140+ Q2 NAFTA EMEA LATAM APAC Worldwide Production (*) JulyExcluding 2015 29th, HP HP Q3-13 (3%) (17%) (7%) (9%) HP quarter 1% (31%) 5% Units (26%) (19%) FY (31%) management Inventory inventory 2015 2% and (4%) (17%) Flat (10%) Equipme
Slide 16: Agricultural Equipment Market Drivers and Cost Containment
Agricultural Management MANAGEMENT TOTAL PRODUCTION (41%) Q2 Continuous containment INDUSTRY MONTHLY $600 $528 $800 $400 $355 $210 $203 $200 08 $0 $167 Jan SOYBEANS US 100 110 80 90 60 70 2005 40 50 (1.3%) CORN CNH FIRST While First Delta (*) July08 83.7 56.8 Source: 14 ACREAGE Jun 90.6 29th, plant
Slide 17: Construction Equipment Q2 Results
7July Construction Q2 NET 12% 10% 58% EMEA APAC Net 43% Other Heavy Light 56% 20% (down Volume OPERATING 28 10 264.7% 3.0% (23) Q2 2015 sales NAFTA LATAM SALES 520.5% 1% Operating Mix margin at(primarily Efficiency and ‘14 R&D 29th,35 Financial were Volume Equipment BY 4.7%as PROFIT costs 2015 $740m
Slide 18: Construction Equipment Inventory and Production
Construction Inventory Q2-13 Company Second Industry NAFTA EMEA LATAM APAC Worldwide Q2 Note: for JulyHeavy 2015 29th, As Q3-13 (11%) (25%) 1% (2%) quarter 6% (6%) Units (22%) (43%) FY overproduction ofmanagement Inventory 2015 Construction Flat (1%) (18%) Q2 Flat 2015E Flat Equipment (10%) (20%) Q4
Slide 19: Commercial Vehicles Q2 Results
Commercial Q2 NET 9% 14% 16% Specialty APAC Buses LATAM OPERATING 75% 77% 16 56 21 (2) (21) Mix 5units) (8) 2015 (0.8%) July Net 9% 67 Trucks EMEA SALES reported) partially APAC Operating Volume Pricing Industrial (K 37.8 40.2 31.4 25.6 +14% 3.5 4.5 EMEA Q2 ‘14 2015 4.1 3.7 Sales2.7% 29th, Q2 33.1 2
Slide 20: Commercial Vehicles Inventory and Production
Commercial Inventory Q1 Company CVs Second Industry Q2 EMEA* LATAM* APAC* *Overproduction New July Reflects ‘13 2015 29th, Retail Zealand Q2 quarter (6.3%) Units 17.4% FY(35.2%) management Inventory 2015 aggregate ‘13 Sales* Vehicles 2015E Q3 overproduction ~10% Q2 in(10%) CVs ‘13 Q2 (35%) &Dealer f
Slide 21: Commercial Vehicles Focus on European Trucks
Commercial Focus EUROPEAN (INDEXED 1990 20 40 60 80 100 120 EMEA +49% •and 35% Q2 IVECO Light: Premium Medium: Heavy: EU28 31.7% Q1 7.7% European 11.5% Light Medium *Heavy July Light Medium Sources: ‘14 AME 29th, and 1992 Medium at –on (EU28 leverage up at TRUCKS Trucks up Q2 capitalize TRUCKS—EUROP
Slide 22: Powertrain Q2 2015 Results
Q2 2015 Powertrain NET 15% 8% KEY 87% Axles Gearboxes Engines 2% 11% 74% APAC LATAM EMEA Net transition Operating Product Industrial including JulyNAFTA sales 29th, 3% SALES HIGHLIGHTS Mix Financial were engine purchasing efficiencies 2015 profit Volumes BY$947mn, Q2 of inventory REGION Results $53m
Slide 23: Powertrain Key Highlights
Powertrain Q2 ENGINES TRANSMISSIONS AXLES KEY Units 69k Transmissions Axles Engines July’15 units 29th, HIGHLIGHTS Sold sold up vs. down sold 17% 17% 2015 by Q2 (% (16%) to business at ’14 change 16% up third Q251.8k 14% &to 14% party H1 y-o-y) 134.8k line to units 20.9k 2015 at 51% units Results un
Slide 24: FY 2015E US GAAP Financial Targets
FY 2015E US GAAP Financial Targets 24
Slide 25: Preliminary Industry Outlook by Segment
H2H1 Preliminary AG (28%) ~(21%) CE (2%) (10%) CV +12% NEW +15% H1 Ä Agricultural Further Construction Depressed NAFTA Commercial EMEA LATAM Continuous July2015E 2014 Unit Unit 29th, (18%) ‘15 OLD +15% (12%) +4% recovery downward (14%) and Production depressed Production H1 vs. 2015 market tight vie
Slide 26: FY 2015E US GAAP Financial Targets
FY a2015E As will Full impact between Net Note: July sales industrial adjust year 29th, result Guidance on5.6% guidance of 2015 working US production ofIndustrial continued debt GAAP and Q2 – FX 6.0%; is at capital &therefore the Financial $/€ H1 Activities accordingly demand end assumed 2015 dueoft
Slide 27: Appendix
27 Appendix
Slide 28: Q2 2015 Results Highlights
Q2 2015 Results REVENUES Agricultural Construction Commercial Powertrain Other Industrial Financial Eliminations NET (IFRS) Attributable Group July 29th, PROFIT Activities, 7,060 177 Ä (US highlights Services (US Activities 2015 (226) 949 GAAP) to Equipment Vehicles (1,948) (128) Equipment Trading /
Slide 29: H1 2015 Results Highlights
H1 2015 Results REVENUES Agricultural Construction Commercial Powertrain Other Industrial Financial Eliminations NET (IFRS) Attributable Group July 29th, PROFIT Activities, 13,127 207 Ä highlights Services (US Activities 2015 (342) 1,853 to Equipment Vehicles (237) Equipment Trading (3,525) /GAAP) C
Slide 30: Efficiency Program Update
Efficiency Q2 Total Agricultural Construction *Commercial July2015 charges $1mn Program 29th, Program Equipment Vehicles Equipment $21mn 2015restructuring Q2to&–date *$18mn update $217mn H1$3mn — $39mn charge $126mn 2015$52mnreferring Results Reviewto FS 30 excluded from the Efficiency Program
Slide 31: H1 2015 From Operating Profit to Net Income
H1 2015 From ($mn) Industrial Financial Elimination Operating Restructuring Interest Other, Income Equity Net ($) EPS Basic July Income 29th, (basic) (diluted) Operating EPS H1 net intaxes expenses before income Services Activities 2015 (168) Profit before /145 attributable 0.11 &(Loss) (203) 0.11 e
Slide 32: Restructuring and Exceptional Items
Q2 & Second 2015 Restructuring Other Net 143 attributable Weighted Basic July Income 378 29th, 2014 EPS H1 exceptional Quarter 175 2015 average 2015 before 2015 to /554 122 before (Loss) expenses, CNH Q2 First 358 2014 restructuring items, shares restructuring & Industrial to 145 Half H1 Net net net
Slide 33: Reconciliation of Operating Profit US GAAP to IFRS
Q2of& Operating The Second % 2015 Net US Development Reclassification Other Total IFRS—Industrial JulyGAAP—Industrial Sales following 29th, % Adjustments 2014 Adjustments H1Quarter of2015 Net 2015 Profit % 2015 of costs, Sales reconciles Q2 First %of 2014 US Trading & of Interest && Net net GAAP Rec
Slide 34: Reconciliation of Net Income and EPS US GAAP to IFRS
Q2 & The Second 2015 Plus: Net Development Others, Taxes Total Profit/(loss) Less: Profit/(Loss) July Income following 29th, EPS Net adjustment Profit/(Loss) H1 21net Quarter (46) Income 2015 2015 2014 15 / attributable attributable in(Loss) costs, 15 9reconciles accordance Q2 EPS First 38 55 (48) a
Slide 35: Equity Reconciliation US GAAP to IFRS
June 30, Jun. Total (a) (b) (c) (d) (e) 30, Equity 2015 Development 2015in –impact Dec. US accordance Goodwill Defined GAAP 31, and benefit Restructuring Other costs, 2014 towith other plansIFRS net US 2,655 Reconciliation intangible provision(33)(8) GAAP (6) 2,819 (12) 4,838 assets 4,961 (117) (122
Slide 36: Change in Net Industrial Debt
Q2 Excluding Cash (US$/mn) Amortization (61) July&income Flow H1 commitments Investments Other Capital Currency Change Net (*) 24 2015 Q2 provision –(85) Industrial Debt 29th, changes 122 Change and 2015 increases, inof 358 (116) 4depreciation translation 2015 working Net Q2 Industrial inand assets
Slide 37: Gross Debt Breakdown
Q2 2015 Gross Industrial 3.2 4.9 0.2 8.3 0.0 0.8 9.1 3.3 2.7 3.1 Note: July2.3 3.5 0.1 5.9 10.0 1.1 1.4 12.5 3.3 21.6 0.8 1.8 19.0 29th, Numbers Debt—Breakdown Warehouse Bank Capital Other Sale Intersegment Cash ABS Total Securitization Net Financial 2015 of Debt Maturities & Debt Debt /Debt Receiva
Slide 38: Debt Maturity Schedule and Liquidity
Q2 2015 Debt 6M Outstanding June 5.2 9.1 0.2 14.6 (5.0) (0.7) (2.8) (7.8) Note: JulyBank Capital Other 2015 29th, Cash 30, Total Cash of Undrawn Maturity Numbers which 2015 Debt 2016 Debt 2015 Portion Available & Market Marketable ABS Schedule—Breakdown 1.3 committed 2017 0.1 may Q2of 1.7 0.0 1.1 &
Slide 39: Geographic Market Share Information
Geographic Consistent NAFTA: LATAM: APAC: EMEA: Market Certain retail European Europe, independent Not Southeast For Turkey, In to July determine this addition, Commercial all 29th, and report, agricultural Continental Share industry South 28 the United Central shipment Construction Asia, 2015 with
Slide 40: Non-GAAP Financial Measures
Non-GAAP results make may US Operating defined Trading of Net repayment evaluates Working Constant CNH currency July Industrial GAAP income Debt 29th, not Industrial decisions and as Profit be Capital capital in Currency and the 2015 Profit revenues, and/or of enhance comparable order (loss) Financi
Slide 41: Investor Contacts
Investor Contacts Federico Noah e-mail: July 29th, Weiss investor.relations@cnhind.com Relations Donati 2015 – Investor Q2 – Head Team & H1 Relations of2015 Investor Results North Relations website: America Review+3941 www.cnhindustrial.com +1(011) (630)00887 —62756 —3745