Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2024 Earnings Presentation
32 slides from Cnh Industrial's earnings presentation, May 2, 2024
Slide 1: Q1 2024 Results Review
Q1 2024 RESULTS REVIEW May 2, 2024
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 competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) pe
Slide 3: Main Achievements
Q1 2024 | MAIN ACHIEVEMENTS Markets weak; profits resilient Proactive cost reductions Continued progress on in-house tech 3 Q1 2024 results review | May 2, 2024
Slide 4: Q1 2024 Results
Q1 2024 | RESULTS Consolidated Adj. EBIT1 Net Income Diluted EPS Revenues Industrial Activities $4.8B $405M $402M $0.31 (10)% (27)% (17)% ($0.04) Net Sales Adj. EBIT%1 Adjusted Adjusted Industrial Activities Industrial Activities Net Income1 Diluted EPS1 $4.1B 9.8% $421M $0.33 (14)% (180) bps (11)%
Slide 5: Business Highlights
Q1 2024 | BUSINESS HIGHLIGHTS Retail deliveries outperformed market More aggressively addressing dealer inventories Restructuring program on track to be completed in Q2 Agriculture price realization despite competitive pressure Construction profit improvement supported by cost actions Financial Serv
Slide 6: Strategic Priorities
STRATEGIC PRIORITIES CUSTOMER TECHNOLOGY BRAND OPERATIONAL SUSTAINABILITY INSPIRED LEADERSHIP AND DEALER EXCELLENCE STEWARDSHIP INNOVATION STRENGTH 6 Q1 2024 results review | May 2, 2024
Slide 7: Technology Leadership: Offboard Management
TECHNOLOGY LEADERSHIP: OFFBOARD MANAGEMENT Introducing an easier way to farm—anywhere, at any time 7 Q1 2024 results review | May 2, 2024
Slide 8: Technology Leadership: Satellite Connectivity
TECHNOLOGY LEADERSHIP: SATELLITE CONNECTIVITY Collaboration with Intelsat 8 Q1 2024 results review | May 2, 2024
Slide 9: Operational Excellence – Cost Programs
OPERATIONAL EXCELLENCE – COST PROGRAMS Ongoing focus on both COGS and SG&A of Industrial Activities Q1 Actions Q2-Q4 Actions Impact by Quarter1 ($M) ~310-365 COGS ✓ Logistics costs Lean manufacturing Reduction ✓ Manufacturing efficiencies Kaizen events Some savings held in Strategic Sourcing Program
Slide 10: Financial Highlights
Q1 2024 | FINANCIAL HIGHLIGHTS ($M) (14)% (11)% ($0.02) (536) 4,776 475 $0.35 4,131 421 $0.33 (673) (1,209) Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Net Sales Adjusted Adjusted Free Cash Flow1 Industrial Activities Net Income1 Diluted EPS1 Industrial Activities Δ YoY 10 Q1 202
Slide 11: Agriculture
Q1 2024 | AGRICULTURE ($M) Net Sales Gross Margin1 (14)% (240) bps 3,927 26.2% 3,373 23.8% Q1 2023 Q1 2024 Δ YoY Q1 2023 Q1 2024 Adjusted EBIT2 14.5% 12.5% Vol. Pricing, Prod. FX & Q1 2023 SG&A R&D Q1 2024 & Mix Net Cost Other (1) Gross Margin calculated as Gross Profit divided by Net Sales, as show
Slide 12: Construction
Q1 2024 | CONSTRUCTION ($M) Net Sales Gross Margin1 (11)% +150 bps 849 17.4% 758 15.9% Q1 2023 Q1 2024 Δ YoY Q1 2023 Q1 2024 Adjusted EBIT2 6.7% 5.2% Vol. Pricing, Prod. FX & Q1 2023 SG&A R&D Q1 2024 & Mix Net Cost Other (1) Gross Margin calculated as Gross Profit divided by Net Sales, as shown in t
Slide 13: Financial Services
Q1 2024 | FINANCIAL SERVICES Net Income Profitability Ratios ($M) 3.7% 4.0% 3.0% 3.2% Q1 2023 78 3.0% 2.6% 1.8% 1.9% 2.0% Q1 2024 118 1.0% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Gross Margin / Average Assets on Book RoA1 Managed Portfolio2 & Retail Originations2 Delinquencies on Book
Slide 14: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Support future growth through operating cash flow reinvestments BALANCE SHEET & CREDIT RATING Sustain healthy liquidity levels and investment grade credit rating SHAREHOLDER RETURNS Maintain a dedicated and consistent dividend and share repurchase policy
Slide 15: 2024 Outlook – Agriculture
2024 OUTLOOK – AGRICULTURE Total Industry Unit Performance1 North South EMEA APAC America America LHP Tractors ~(10)% ~(10)% ~(10)% (5)% – flat HHP Tractors (15)–(10)% Combines (15)–(10)% (15)–(10)% (25)–(20)% ~flat Total Industry Volume % change FY 2024 vs. FY 2023 reflecting the aggregate for key
Slide 16: 2024 Outlook – Construction
2024 OUTLOOK – CONSTRUCTION Total Industry Unit Performance1 North South EMEA APAC America America Light (5)% – flat (15)–(10)% flat (10)–(5)% Heavy (5)% – flat (10)–(5)% flat – 5% (5)% – flat Total Industry Volume % change FY 2024 vs. FY 2023 reflecting the aggregate for key markets where the Compa
Slide 17: 2024 Outlook – Financial Targets
2024 OUTLOOK – FINANCIAL TARGETS Industrial previous current Activities Net Sales (12)-(8)% YoY (14)-(10)% YoY Free Cash Flow1 $1.2B - $1.4B $1.1B - $1.3B Company previous current Adj. Diluted EPS1 $1.50 - $1.60 $1.45 - $1.55 17 Q1 2024 results review | May 2, 2024 (1) Non-GAAP measure (definition i
Slide 18: The Path Forward
THE PATH FORWARD Leaner and more resilient company Great iron + great tech Simpler capital market profile Experienced team ready for the challenges ahead 18 Q1 2024 results review | May 2, 2024
Slide 19: Appendix
APPENDIX a a
Slide 20: Unit Performance vs. Q1 2023
Q1 2024 | UNIT PERFORMANCE VS. Q1 2023 NORTH SOUTH EMEA1 APAC1 AMERICA1 AMERICA1 0-140 HP – Small Tractors (15)% (15)% (18)% (12)% 140+ HP – Large Tractors (2)% Total Industry Combines (17)% (24)% (40)% 16% Light (9)% (20)% (10)% 5% Heavy 6% (6)% (9)% 1% TRACTORS COMBINES LIGHT HEAVY Company Q1'23 Q
Slide 21: Financial Summary
Q1 2024 | FINANCIAL SUMMARY ($M) Q1 2023 Q1 2024 Δ YoY U.S. GAAP Revenues 5,342 4,818 (10)% Net Sales | Industrial Activities 4,776 4,131 (14)% Net Income 486 402 (17)% Diluted EPS $0.35 $0.31 ($0.04) Non – GAAP1 Net Sales | Industrial Activities @CC2 4,776 4,108 (14)% Adjusted EBIT | Industrial Act
Slide 22: Industrial Activities Net Sales
Q1 2024 | INDUSTRIAL ACTIVITIES NET SALES Agriculture Construction Industrial Activities1 $3,373M $758M $4,131M Q1 2023 (14)% YoY (15)% @CC2 (11)% YoY (11)% @CC2 (14)% YoY (14)% @CC2 Q1 2024 By Region By Region By Region as reported as reported as reported NA EMEA SA APAC NA EMEA SA APAC NA EMEA SA
Slide 23: Financials by Segment
Q1 2024 | FINANCIALS BY SEGMENT ($M) Revenues & Adj. EBIT Gross Profit Gross Margin Adj. EBIT1 Net Sales Margin1 Q1 23 Q1 24 Q1 23 Q1 24 Q1 23 Q1 24 Q1 23 Q1 24 Q1 23 Q1 24 Agriculture 3,927 3,373 1,030 804 26.2% 23.8% 570 421 14.5% 12.5% Construction 849 758 135 132 15.9% 17.4% 44 51 5.2% 6.7% Elim
Slide 24: CapEx and R&D
Q1 2024 | CAPEX AND R&D ($M) Q1 2023 Q1 2024 Investments in property, plant and equipment, and intangible assets 90 96 Breakdown by Category New Product & Technology 45% 46% Maintenance & Other 44% 50% Industrial Capacity Expansion & LT Investments 11% 4% Breakdown by Segment Agriculture 90% 87% Con
Slide 25: Debt Maturity Schedule | Breakdown
DEBT MATURITY SCHEDULE | BREAKDOWN ($B) Outstanding Mar. 31, 2024 2024 2025 2026 2027 2028 Beyond 4.7 Bank Debt 1.9 1.1 0.3 0.4 0.3 0.7 11.1 Capital Market 2.2 2.6 2.2 1.5 0.8 1.7 0.1 Other Debt 0.1 - - - - - 16.0 Cash Portion of Debt Maturities 4.2 3.8 2.5 1.9 1.1 2.4 of which Industrial Activities
Slide 26: Reconciliations
RECONCILIATIONS a a
Slide 27: Reconciliation of Net Income to Adj. EBIT of Industrial Activities
RECONCILIATION OF NET INCOME TO ADJ. EBIT OF INDUSTRIAL ACTIVITI ES ($M) Q1 2023 Q1 2024 Net Income 486 402 Less: Consolidated income tax expense (173) (77) Consolidated income before taxes 659 479 Less: Financial Services Financial Services Net Income 78 118 Financial Services Income Taxes 29 19 Ad
Slide 28: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW OF IND. ACTIVITIES UNDER U.S. GAAP ($M) Q1 2023 Q1 2024 Net cash provided by (used in) Operating Activities (701) (894) Cash flows from Operating Activities of Financial Services net of eliminations 158 (198) Cha
Slide 29: Reconciliation of Adj. Net Income and Adj. Income Tax
RECONCILIATION OF ADJ. NET INCOME AND ADJ. INCOME TAX (EXPENSE) BENEFIT TO NET INCOME (LOSS) AND INCOME TAX (EXPENSE) BENEFIT AN D CALCULATION OF ADJ. DILUTED EPS AND ADJ. ETR UNDER U.S. GAAP Q1 2023 Q1 2024 ($M) Net income (loss) 486 402 Adjustments impacting Income (loss) before income tax (expens
Slide 30: Geographic Information
GEOGRAPHIC INFORMATION The composition of our regions part of the geographic information is as follows: ▪ North America: United States, Canada, and Mexico ▪ Europe, Middle East, and Africa (EMEA): member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, B
Slide 31: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CNH monitors its operations through the use of several non-GAAP financial measures. CNH’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH’s fi
Slide 32: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS investor.relations@cnh.com Jason Omerza +1 (630) 740 8079 | jason.omerza@cnh.com Federico Pavesi +39 (345) 605 6218 | federico.pavesi@cnh.com www.cnh.com