Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2015 Earnings Presentation
40 slides from Cnh Industrial's earnings presentation, Apr 30, 2015
Slide 1: Q1 2015 Results Review
Exhibit 99.2 Q1 2015 Results Review April 30 th, 2015
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures April 30th, 2015 Q1 2015 Results Review 2
Slide 3: Q1 2015 Executive Summary
Q1 2015 Executive Summary Industrial Activities net sales at $5.6bn down 11.9% on a constant currency basis vs. last year Operating profit of Industrial Activities at $223mndown 39.4% on a constant currency basis vs. last year; operating margin at 4.0% EPS at $0.02 down $0.05; EPS excluding restruct
Slide 4: Financial Highlights
Financial Highlights 4
Slide 5: Highlights
Q1 2015 Highlights Consolidated Revenuesat $6.0bn,down11.1%on a constant currencybasis (down21.0%asreported) Net incomeat $23mn,down $78mnvs. last year;Net incomebefore restructuring and other exceptionalitems at $33mn EPSat $0.02; EPSbefore restructuring and other exceptionalitems at $0.02 Availabl
Slide 6: From Operating Profit to Net Income
Q1 2015 From Operating Profit to Net Income ($mn) Q1 2015 Q1 2014 Industrial Activities Operating profit 223 412 (189) Financial Services Operating profit 129 134 (5) Elimination & Other (68) (80) 12 Operating Profit 284 466 (182) Restructuring expenses (12) (12) - Interest expenses of Industrial Ac
Slide 7: Cash Flow – Change in Net Industrial Debt
Q1 2015 Cash Flow C – hange in Net Industrial Debt NET INDUSTRIAL CASH FLOW ($MN) (992) (2,691) (3,051) 172 23 (55) 630 2 (1,039) (88) (5) DEC 31, NET D&A CHANGE IN CHANGE TANGIBLE & CHANGE IN CAPITAL INCREASE, FX TRANSLATION MAR 31, 2014 INCOME FUNDS & IN WC INTANGIBLE INVESTMENT, DIVIDENDS & EQUIT
Slide 8: Industrial Activities Capex - breakdown
Q1 2015 Industrial Activities Capex - breakdown Delta % Q1 ’15 vs. Q1 ‘14 April 30th, 2015 Q1 2015 Results Review 8
Slide 9: Financial Services performance
Q1 2015 Financial Services performance KEYHIGHLIGHTS NETINCOME Net incomewas $85mn,flat comparedto Q1 2014 ($MN) • Negative impact of currency translation and lower interest margin 86 85 were offset by lower provisions for credit losses and lower SG&A spending -1.2% Retail originations at $2.1bn, do
Slide 10: Liquidity & Debt Maturity (March 31st, 2015)
Q1 2015 Liquidity& DebtMaturity (March31st, 2015) COMPANYAVAILABLE LIQUIDITY Available 1 DebtMaturitySchedule ($bn) Available liquidity at March 31, 2015 was $7.2bn, compared to Liquidity ($bn) $8.9bn at December 31, 2014 Increase in Bank Debt Seasonal cash absorption from $7.2 operating activities
Slide 11: Focus on Industrial Debt breakdown
Q1 2015 Focus on Industrial Debt breakdown Dec. 31, 2014 ($BN) Mar. 31, 2015 Key Highlights Capital Market debt reduction due to €1bn bond repaid on 3.5 Bank Debt 3.2 (0.3) 6.5 Capital Market 4.9 (1.6) March 18, 2015 0.2 Other Debt 0.2 - Proactive Financial Services (FS) funding decoupling from 10.2
Slide 12: Industrial Activities Overview
Industrial Activities Overview 12
Slide 13: Industrial Activities (Net Sales and Operating Profit Composition)
Q1 2015 Industrial Activities (Net Sales and Operating Profit Composition) 13
Slide 14: Industrial Activities (Net Sales & Operating Profit by Segment)
Q1 2015 Industrial Activities (Net Sales & Operating Profit by Segment) NETSALES ($MN) OPERATING PROFIT($MN) Q1 2014 Q1 2015 Q1 2014 Q1 2015 464 412 7,213 5,625 204 223 3,706 2,577 -45.9% 2,308 2,037 -22.0% 34 36 1,201 -56.0% -30.5% 774 602 901 -11.7% (70) 1 (19) (18) -22.2% -25.0% (776) (492) 3 0 +
Slide 15: Agricultural Equipment
Agricultural Equipment Q1 2015 Financial Results 15
Slide 16: Agricultural Equipment
Agricultural Equipment Inventory management (units of equipment) – Industry units Industry Units AGRICULTURAL EQUIPMENT (MAJOR EQUIPMENT) Q1 2015 FY 2015E 0-40 HP 2% Flat 40-140 HP 4% Flat to 5% 140+ HP (26%) (20%) to (25%) NAFTA (2%) Flat to (5%) EMEA (14%) Flat to (5%) LATAM (10%) (15%) to (20%) A
Slide 17: Agricultural Equipment
Agricultural Equipment Proactive measures for row crop market conditions HHP TRACTOR PRODUCTION COMBINEPRODUCTION SPRAYERS & OTHER PRODUCTION (34%) (49%) (41%) Q1 14 Q1 15 Q1 14 Q1 15 Q1 14 Q1 15 NAFTA HHP Tractor Production (38%) TOTALROW CROPPRODUCTION AG SG&A EXPENSE ($MIL) AG HEADCOUNT (EMPLOYEE
Slide 18: Construction Equipment
Construction Equipment Q1 2015 Financial Results NETSALESBYREGION& PRODUCT ($) OPERATING PROFIT WALK($) 9% 3 Breakeven 17% NAFTA 7 1 EMEA 0.4% 53% LATAM 12 APAC 3% 21% 47% 3 Light 1 Heavy Other (27) Q1 '14 Volume / Pricing, net Prod. Cost SG&A R&D FX / Other Q1 '15 50% Mix Net saleswere $602mndown 1
Slide 19: Construction Equipment
Construction Equipment Inventorymanagement(unitsof equipment)–Industryunits Industry Units CONSTRUCTION EQUIPMENT Q1 2015 FY 2015E (L IGHT & HEAVY) NAFTA 11% Flat to 5% EMEA 1% Flat to 5% LATAM (20%) (20%) to (25%) APAC (18%) Flat to (5%) Worldwide (4%) Flat Q1 2015 FY 2015E Q1-13 Q2-13 Q3-13 Q4-13
Slide 20: Commercial Vehicles
Commercial Vehicles Q1 2015 Financial Results NETSALESBYREGION& PRODUCT ($) OPERATING PROFITWALK($) 9% 7% EMEA 16% 3 5 1 14% LATAM Trucks 42 Buses APAC 27 1 0.0% Specialty Vehicles (3.0%) 77% (7) (70) 77% Q1 '14 Volume / Pricing, net Prod. Cost SG&A R&D FX / Other Q1 '15 Mix Net Salesat $2.0bn,up 5.
Slide 21: Commercial Vehicles
Commercial Vehicles Inventory management (units of equipment) – Industry units Industry Units COMMERCIAL VEHICLES (ALL EQUIPMENT) Q1 2015 FY 2015E EMEA* 12% 5% to 10% LATAM* (33%) (25%) to (30%) APAC* (5%) (5%) to (10%) Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2'14 Q3 '14 Q4 14 Q1 '15 Company Inventory D
Slide 22: Commercial Vehicles
Commercial Vehicles Efficiency ProgramProduct - specialization of Spanish and Italian operations Valladolidwill be transformed into a center of excellence for heavy OnApril10 th, 2015, CNHIndustrialannouncedplansto commercial vehicles cab production focus the operations of its Commercial Vehicles ma
Slide 23: Powertrain
Powertrain Q1 2015 Financial Results NETSALES BYREGION& PRODUCT ($) NAFTA EMEA KEYHIGHLIGHTS LATAM APAC Net saleswere $901mn,down 10.3%on a constant currencybasis compared to 2014 (down 25% as reported), on lower volumes mainly in the captive portion of the business as a result of decreased agricult
Slide 24: Powertrain
Powertrain Units Sold (% change y-o-y) Units Sold Q1 ‘15 vs. Q1 ‘14 KEYHIGHLIGHTS Units sold by business line ENGINES (17.6%) • Engines down 17.6% to 129.7k units (CV 30%, AG 11%, CE 5% and 54% to external customers); third party sales at TRANSMISSIONS (8.2%) 70k units, up 1.4% vs. last year AXLES 3
Slide 25: FY 2015E US GAAP Financial Targets
FY 2015E US GAAP Financial Targets 25
Slide 26: FY 2015E US GAAP Financial Targets
FY 2015E US GAAP Financial Targets Full year guidance is confirmed reflecting current currency exchange rates as follows: Net salesof IndustrialActivitiesin the rangeof $26-27bn,with an operating marginof IndustrialActivitiesbetween6.1%and6.4%; Net industrialdebt at the end of 2015 between$2.1bnand$
Slide 27: Appendix
Appendix 27
Slide 28: Results highlights (IFRS $ & US GAAP $) – delta with previous year
Q1 2015 Resultshighlights(IFRS$ & USGAAP$) – deltawith previousyear ($MN) REVENUES Trading Profit Operating Profit MARGIN (IFRS) (US GAAP) (IFRS) (US GAAP) (IFRS) (US GAAP) Agricultural Equipment 2,577 (1,129) 2,577 (1,129) 157 (285) 204 (260) 6.1% 7.9% Construction Equipment 602 (172) 602 (172) (4)
Slide 29: Efficiency Program – update
Q1 2015 EfficiencyProgram– update Q1 2015 Program to date Total charges $12mn $196mn Agricultural Equipment $6mn $49mn Construction Equipment - $39mn Commercial Vehicles $6mn $108mn th April 30 , 2015 Q1 2015 Results Review 29
Slide 30: Net Income to Net Income and basic EPS before Restructuring and Exceptional Items
Q1 2015 Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) First Quarter ($MN) 2015 2014 Net Income 23 101 Restructuring expenses, net of tax 10 12 Other exceptional items, net of tax - 64 Net Income before restructuring and other exceptional items 3
Slide 31: Operating Profit US GAAP to Trading Profit IFRS - Reconciliation
Q1 2015 OperatingProfitUSGAAPto TradingProfitIFRS- Reconciliation The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading Profit under IFRS: First Quarter ($MN) % of % of 2015 Net Sales 2014 Net Sales US GAAPIndustrial - Operating Profit 223 4.0% 412 5.7% Development cos
Slide 32: Net Income US GAAP to Profit under IFRS - Reconciliation
Q1 2015 NetIncome/ (Loss)USGAAPto Profit/ (Loss)underIFRS- Reconciliation The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: First Quarter ($MN) 2015 EPS 2014 EPS Net Income attributable to CNH Industrial N.V. 22 0.02 100 0.07 Plus: Net Income / (Loss) attributabl
Slide 33: Total Equity – US GAAP to IFRS Reconciliation
Q1 2015 TotalEquity– USGAAPto IFRSReconciliation Mar. 31, 2015 Dec. 31, 2014 ($MN) Total Equity in accordance with US GAAP 4,955 4,961 (a) Development costs, net 2,565 2,819 (b) Goodwill and other intangible assets (119) (122) (c) Defined benefit plans (18) (6) (d) Restructuring provision (7) (12) (
Slide 34: Cash Flow – Change in Net Industrial Debt (US GAAP)
Q1 2015 Cash Flow C – hange in Net Industrial Debt (US GAAP) (US$/mn) Q1 2015 Q1 2014 Net Debt of Industrial Activities at the beginning of period (2,691) (2,214) (477) Net income 23 101 (78) Amortization and depreciation (*) 172 175 (3) Changes in provisions and similar, and items related to assets
Slide 35: Gross Debt Breakdown
Q1 2015 Gross Debt Breakdown - DECEMBER 31, 2014 MARCH 31, 2015 Industrial Financial Services Industrial Financial Services 10.2 5.9 Cash Portion of Debt Maturities 8.3 5.9 3.5 2.1 Bank Debt 3.2 2.3 6.5 3.5 Capital Market 4.9 3.5 0.2 0.2 Other Debt 0.2 0.1 0.0 13.6 Securitization and Sale of Receiva
Slide 36: Debt Maturity Schedule Breakdown
Q1 2015 Debt Maturity ScheduleBreakdown - Outstanding ($BN) 9M 2015 2016 2017 2018 2019 Beyond March 31, 2015 5.5 Bank Debt 2.2 1.3 0.7 0.6 0.5 0.2 8.4 Capital Market 1.1 0.9 2.1 1.9 1.6 0.8 0.3 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 14.1 Cash Portion of Debt Maturities 3.4 2.3 2.8 2.5 2.2 1.0 (4.5) Cas
Slide 37: Geographic Information
Geographic Information th April 30 , 2015 Q1 2015 Results Review 37
Slide 38: 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 39: Accounting standards, reporting currency and segment realignment
Accounting standards, reporting currency and segment realignment Beginningwith the filing with the U.S.Securitiesand ExchangeCommission(“SEC”)of its annual report on Form 20-Ffor the fiscal year ended December31, 2013, prepared in accordancewith U.S.GAAP,CNHIndustrial reports quarterly and annual co
Slide 40: Investor Relations Team
Contacts Investor Relations Team Federico DonatiHead – of Investor Relations +39 (011) 00 6 - 2756 Noah Weiss Investor – Relations North America +1 (630) 887 3 - 745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com th April 30 , 2015 Q1 2015 Results Review 40