Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q4 2020 Earnings Presentation
53 slides from Cnh Industrial's earnings presentation, Feb 3, 2021
Slide 1: Q4 & FY 2020 Results Review
Q4 & FY 2020 Results Review February 3rd, 2021
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures 2 All statements other than statements of historical fact contained in this presentation including statements regarding our future responses to and effects of the COVID-19 pandemic; competitive strengths; business strategy; future financial position or operating
Slide 3: FY 2020 | A Year of Firsts
FY 2020 | A Year of Firsts 3 Facing the Pandemic: prioritized the health and safety of our workforce, while supporting our dealers, customers and suppliers Net cash positive: year-end Industrial Activities net financial position of $0.8bn Embraced new ways of working, continued to invest in product
Slide 4: Q4 20 vs. Q4 19 Industry Unit Performances
Q4 20 vs. Q4 19 | Industry Unit Performances Worldwide Industry (Monthly Performances) 4 TRACTORS NA EU SA RoW WW October November December 0-140 HP 27% 7% 29% 30% 27% 14% 43% 31% 140+ HP 17% COMBINES (1%) 22% 22% Flat 8% 16% 14% (1%) COMPACT AND SERVICE EQ. NA EU SA RoW WW October November December
Slide 5: Q4 2020 WW Company Unit Statistics
Q4 2020 | WW Company Unit Statistics (Retail | Wholesale | Production) 5 TRACTORS COMBINES 29% 17% FY 2020 WW Tractors and Combines underproduction vs. 46% retail at 13% and 19%, respectively NA row crop underproduction vs. retail at 17% in FY 10% 16% 23% 2020 Q419 Q420 Q419 Q420 COMPACT AND SERVICE
Slide 6: Q4 2020 Worldwide Channel Inventory Statistics
Q4 2020 | Worldwide Channel Inventory Statistics (units) 6 Channel Inventory Channel Inventory WW Tractors Company and Dealer inventories down (31%) (40%) 49% and 19% respectively vs. last year TRACTORS COMBINES WW Combines Company and Dealer inventories down 61% and 28% respectively vs. last year N
Slide 7: Q4 & FY 2020 Financial Highlights
Q4 & FY 2020 | Financial Highlights 7 Q4 2020 FY 2020 Industrial Activities Net Sales Q4 Net Sales up 12%, higher volumes and price realization, mainly in AG and C&SV FY Net Sales down 7%, adverse COVID-19 impact in H1 and actions to lower inventory levels, only partially offset by higher $8.0bn $24
Slide 8: Q4 2020 Industrial Activities Net Sales
Q4 2020 | Industrial Activities Net Sales 8 17% 19% NA (North America) ($mn) 10% EU (Europe) BY REGION SA (South America) CHANGE IN NET SALES AT RoW (Rest of World) CONSTANT CURRENCY 54% 821 11.4% EUR 47% GBP 1% 7,183 560 60 214 141 (154) 8,004 31 8,035 USD 24% AUD 3% BY CURRENCY FX ELIM & Q4 2020 B
Slide 9: Q4 2020 IA Adj. EBIT walk by Segment & driver
Q4 2020 | IA Adj. EBIT walk by Segment & driver 9 INDUSTRIAL ACTIVITIES CHANGE IN ADJUSTED EBIT ($mn) 219 6.5% 4.2% 301 167 129 3 11 (5) (22) (64) 520 Q4 UNALLOCATED, Adj. EBIT VOL & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Adj. EBIT ELIM & OTHER 2019 2020 IA - Adj. EBIT walk by driver Agricult
Slide 10: Q4 2020 Financial Services
Q4 2020 | Financial Services 10 ($mn) Net Income Managed Portfolio (*) & Retail Originations (*) 93 60 7% 7% Q4 ’20 retail originations at $2.9bn, up $0.3bn compared to Q4 2019 39% $26.6bn 54% 36% $26.6bn 57% Managed portfolio* at $26.6bn, flat compared to December 31, 2019 (down $0.4bn on a Q4 2019
Slide 11: Net Industrial (Debt) / Cash and Free Cash Flow
Q4 2020 | Net Industrial (Debt) / Cash and Free Cash Flow 11 ($mn) FREE CASH FLOW OF INDUSTRIAL ACTIVITIES 2,365 (1,544) 775 (35) 1,964 (60) (253) (26) (4) (31) 786 CHANGE IN CASH INTEREST CHANGE IN WORKING DIVIDENDS & EQUITY Sep 30, 2020 IA | ADJ EBITDA AND TAXES CAPITAL PROVISIONS & PP&E CAPEX (2)
Slide 12: Available Liquidity and Debt Maturity Schedule
Q4 2020 | Available Liquidity and Debt Maturity Schedule 12 AVAILABLE LIQUIDITY DEBT MATURITY SCHEDULE (1) ($bn) ($14.1BN) 8.7 8.9 9.3 8.8 9.4 8.9 11.3 15.9 3.9 2.3 2.0 1.7 1.1 3.2 Dec-end ‘13 Dec-end ‘14 Dec-end ‘15 Dec-end ‘16 Dec-end ‘17 Dec-end ‘18 Dec-end ‘19 Dec-end ‘20 2021 2022 2023 2024 202
Slide 13: FY 2020 Final Remarks
FY 2020 Final Remarks Corporate Presentation 2017
Slide 14: Organic Growth – AG – Digitalization & Precision Farming
Q4 2020 | Organic Growth – AG - Digitalization & Precision Farming 14 FIELD In-Field Process Productivity Continued successful roll out and expansion of (Yield/Cost) end-to-end solutions driving customer satisfaction Recent Releases Next Releases and product competitiveness 23 24 FLEET FIELD FARM Op
Slide 15: Iveco and Nikola quarterly update
Q4 2020 | Iveco and Nikola quarterly update 15 NIKOLA TRE US BEV Prototypes continued to be tested on test tracks. In the coming months, as planned, we proceed in expanding validation work. Schedule has been confirmed, with starting of production at the end of 2021 Q4 & FY 2020 Results Review Februa
Slide 16: Sustainability | Our recognitions in 2020
Sustainability | Our recognitions in 2020 16 DOW JONES SUSTAINABILITY INDEX With a score of 89/100, CNH Industrial is confirmed as the Industry Leader (*) in the Dow Jones Sustainability World and Europe Indices for the 10th consecutive year CDP CLIMATE CHANGE CNH Industrial included in the prestigi
Slide 17: FY 2021E Preliminary Guidance
FY 2021E Preliminary Guidance Corporate Presentation 2017
Slide 18: CEO – 2021 Overview
FY 2021E Preliminary Guidance | CEO – 2021 Overview 18 Strengthening industries, rebounding economies and solid AG demand offer opportunity Disruptions from COVID, material cost increases: headwinds, hard work to be done On-Highway spin-off execution on track Lean inventory profile: production keeps
Slide 19: Industry Outlook
FY 2021E Preliminary Guidance | Industry Outlook (*) 19 TRACTORS NA EU SA RoW WW 0-140 HP Flat Flat – 5% Flat – 5% Flat – 5% Flat – 5% 140+ HP 10%+ COMBINES 10%+ 5% - 10% Flat Flat – 5% 5% LIGHT NA EU SA RoW WW 5% Flat 15% - 20% Flat – 5% Flat – 5% HEAVY Flat 5% – 10% 10% 5% 5% TRUCKS > 3.5T NA EU S
Slide 20: WW Company's production level
FY 2021E Preliminary Guidance | WW Company’s production level 20 TRACTORS WW production expected up double-digit for both Tractors and Combines for FY 2021E vs. FY 2020 COMBINES Majority of the production increase in H1 2021E vs. H1 2020 Low single-digit overproduction vs. retail in FY 2021E Q1E Q2E
Slide 21: FY 2021E Financials
FY 2021E Preliminary Guidance | FY 2021E Financials 21 Net Sales of Industrial Activities (*) Up between 8% and 12% (including currency-translation effects) SG&A ≤ 7.5% of Net Sales Industrial Activities R&D ~ 4.5% of Net Sales Industrial Activities Free Cash Flow of Industrial Activities Positive b
Slide 22: CEO – Takeaway messages
FY 2021E Preliminary Guidance | CEO – Takeaway messages 22 Customer centricity: Focus on farmer/worker/driver Accelerating innovation: Digital, alternative fuels, sustainability Driving Gross Margin improvement through World Class Enterprise Uncompromising focus on Safety and Ethics Continue to deli
Slide 23: Appendix
Appendix INDUSTRIAL
Slide 24: Q4 & FY 2020 Financial Summary
Q4 & FY 2020 | Financial Summary 24 Q4 2020 Q4 2019 Δ FY 2020 FY 2019 Δ U.S. GAAP Revenues ($bn) 8,501 7,695 10.5% 26,032 28,079 (7.3%) Net Sales | Industrial Activities ($bn) 8,035 7,183 11.9% 24,285 26,149 (7.1%) Net Income ($mn) 187 120 55.8% (438) 1,454 n.m. Diluted EPS ($) 0.12 0.08 50.0% (0.36
Slide 25: Industrial Activities Q4 2020 Net Sales Split
Industrial Activities | Q4 2020 Net Sales Split 25 Chg. Chg. Agriculture Q4 2020 | Split Construction Q4 2020 | Split vs. Q4 ’19 vs. Q4 ’19 By region: By region: NA 33% 3% NA 48% (0%) EU 36% 30% EU 19% 15% SA 15% 5% SA 13% 11% RoW 16% 39% RoW 20% 13% By product: By product: TRACTORS 61% 22.4% C&S (*
Slide 26: Q4 2020 Financials by Segment
Q4 2020 | Financials by Segment 26 Q4 2020 Q4 2019 % Chg % Chg. @cc Q4 2020 $ Chg. Margin p.p. Chg. Gross Profit REVENUES Agriculture 718 142 21.0% 1.3 p.p. Agriculture 3,425 2,928 17.0% 19.1% Construction 84 1 11.2% (0.5) p.p. Construction 752 707 6.4% 8.4% 3,290 2,996 9.8% 7.1% Commercial & Specia
Slide 27: AG Financial Results
AG | Financial Results 27 ($mn) Net Sales Q4 ’20 Change vs. prior year Q4 ’20 Change vs. prior year Δ 2020 2019 Δ At CC NA EU SA RoW TRACTORS COMBINES OTHERS Q4 3,425 2,928 17.0% 19.1% Adj. EBIT walk Higher volumes across regions, positive price realization and continued cost containment actions i
Slide 28: CE Financial Results
CE | Financial Results 28 ($mn) Net Sales Q4 ’20 Change vs. prior year Q4 ’20 Change vs. prior year Δ 2020 2019 Δ At CC NA EU SA RoW C&S (*) General CE (*) R&S (*) Q4 752 707 6.4% 8.4% Adj. EBIT walk Higher volume and mix, positive price realization and cost containment actions Negative producti
Slide 29: C&SV Financial Results
C&SV | Financial Results 29 ($mn) Net Sales Q4 ’20 Change vs. prior year Q4 ’20 Change vs. prior year Δ 2020 2019 Δ At CC NA EU SA RoW TRUCKS BUSES SPECIALTY VEHICLES Q4 3,290 2,996 9.8% 7.1% N.M. Adj. EBIT walk Higher volumes and favorable mix in EU and SA, and positive price realization Positi
Slide 30: PT Financial Results
PT | Financial Results 30 ($mn) Net Sales Q4 ’20 Change vs. prior year Q4 ’20 Change vs. prior year Δ 2020 2019 Δ At CC NA EU SA RoW ENGINES TRANSM. AXLES Q4 1,204 1,008 19.4% 14.0% (*) (*) 3rd Party sales at 50% in Q4 20 vs. 57% in Q4 19 Adj. EBIT walk Favorable volume and mix and reduced spendin
Slide 31: Industrial Activities FY 2020 Net Sales Split
Industrial Activities | FY 2020 Net Sales Split 31 Chg. Chg. Agriculture FY 2020 | Split Construction FY 2020 | Split vs. FY '19 vs. FY '19 By region: By region: NA 35% (4%) NA 44% (31%) EU 35% (1%) EU 19% (15%) SA 14% (8%) SA 15% (7%) RoW 16% 17% RoW 22% (12%) By product: By product: TRACTORS 58% (
Slide 32: FY 2020 Financials by Segment
FY 2020 | Financials by Segment 32 FY 2020 $ Chg. Margin p.p. Chg. FY 2020 FY 2019 % Chg % Chg. @cc Gross Profit REVENUES Agriculture 2,087 (196) 19.1% (1.7) p.p. Agriculture 10,923 10,959 (0.3%) 2.6% Construction 81 (269) 3.7% (8.9) p.p. Construction 2,170 2,768 (21.6%) (18.8%) Commercial & Special
Slide 33: FY 2020 Industrial Activities Net Sales
FY 2020 | Industrial Activities Net Sales 33 14% AG CHANGE IN NET SALES AT CONSTANT CURRENCY ($mn) 42% CE (1,447) BY SEGMENT (5.5%) C&SV 36% PT 8% EUR 46% GBP 1% USD 26% AUD 3% BY 26,149 286 (520) (981) (520) 288 24,702 (417) 24,285 CURRENCY BRL 7% OTHER 14% FX ELIM & FY 2020 CAD 3% FY 2019 AG CE C&
Slide 34: FY 2020 IA Adj. EBIT walk by Segment & driver
FY 2020 | IA Adj. EBIT walk by Segment & driver 34 INDUSTRIAL ACTIVITIES CHANGE IN ADJUSTED EBIT ($mn) (838) 5.3% 2.3% 1,390 (754) 128 (120) 170 99 (238) (123) 552 FY UNALLOCATED ITEMS Adj. EBIT VOL & MIX PRICING NET (*) PROD COST SG&A R&D FX | OTHER ELIM & OTHERS Adj. EBIT 2019 2020 IA - Adj. EBIT
Slide 35: Q4 & FY 2020 Organic Investment in Future Growth
Q4 & FY 2020 | Organic Investment in Future Growth 35 ($mn) CAPEX (1) R&D (1) Total spending (Capex + R&D) in new products was $304mn, up 3% vs. Q4 ‘19 32% 48% 310 253 275 289 Q4 Q4 2019 2020 2019 2020 20% 633 481 1,030 932 FY FY 2019 2020 2019 2020 Digitalization; Electrification; Autonomous & Tele
Slide 36: FY 2021E Preliminary Industry Outlook
FY 2021E | Preliminary Industry Outlook (*) 36 TRACTORS NA EU SA RoW WW 0-140 HP Flat Flat – 5% Flat – 5% Flat – 5% Flat – 5% 140+ HP 10%+ COMBINES 10%+ 5% - 10% Flat Flat – 5% 5% COMPACT AND SERVICE EQ. NA EU SA RoW WW Flat – 5% Flat 15% Flat Flat GENERAL CONSTRUCTION | ROAD BUILDING AND SITE PREPA
Slide 37: Reconciliation of Net Income to Adj. EBIT by Segment (Q4 2020)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 37 Q4 2020 Unallocated ($mn) AG CE CV PT Items, Elim. & Industrial Activities Other Consolidated Net income (loss) 187 Less: Consolidated Income tax benefit (expense) (28) Consolidated Income (loss) before taxes 215 Less: Financia
Slide 38: Reconciliation of Net Income to Adj. EBIT by Segment (Q4 2019)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 38 ($mn) Q4 2019 Unallocated Industrial AG CE CV PT Items, Elim. & Activities Other Consolidated Net income (loss) 120 Less: Consolidated Income tax benefit (expense) 10 Consolidated Income (loss) before taxes 110 Less: Financial
Slide 39: Reconciliation of Net Income to Adj. EBIT by Segment (FY 2020)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 39 FY 2020 Unallocated Industrial ($mn) AG CE CV PT Items, Elim. & Activities Other Consolidated Net income (loss) (438) Less: Consolidated Income tax benefit (expense) 50 Consolidated Income (loss) before taxes (488) Less: Financ
Slide 40: Reconciliation of Net Income to Adj. EBIT by Segment (FY 2019)
Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP) 40 FY 2019 ($mn) Unallocated Industrial AG CE CV PT Items, Elim. & Activities Other Consolidated Net income (loss) 1,454 Less: Consolidated Income tax benefit (expense) 271 Consolidated Income (loss) before taxes 1,183 Less: Finan
Slide 41: Reconciliation of Adj. net income and Adj. diluted EPS
Q4 & FY 2020 41 Reconciliation of Adj. net income and Adj. income tax benefit (expense) to Net Income (loss) and Income tax benefit ($mn) (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP FY 2020 FY 2019 Q4 2020 Q4 2019 (438) 1,454 Net income (loss) 187 120 1,051 320 Adjustme
Slide 42: Reconciliation of Adj. net income, adjustments detail
Q4 & FY 2020 42 Reconciliation of Adj. net income and Adj. income tax benefit (expense) to Net Income (loss) and Income tax benefit ($mn) (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP FY 2020 FY 2019 Q4 2020 Q4 2019 (a) Adjustments impacting Income (loss) before income ta
Slide 43: Capex
Capex (1) 43 Q4 Q4 FY FY ($mn) 2020 2019 2020 2019 Investments in property, plant and equipment, and intangible assets (1) 253 310 481 633 Breakdown by Category NEW PRODUCT & TECHNOLOGY 43% 44% 47% 44% MAINTENANCE & OTHER 54% 53% 51% 53% INDUSTRIAL CAPACITY EXPANSION & LT INVESTMENTS 3% 3% 2% 3% Bre
Slide 44: Reconciliation of Total Debt to Net Debt (US GAAP)
Reconciliation of Total Debt to Net Debt (US GAAP) 44 Consolidated Industrial Activities Financial Services ($mn) December 31, December 31, December 31, December 31, December 31, December 31, 2020 2019 2020 2019 2020 2019 Third party debt 26,053 24,854 7,271 5,226 18,782 19,628 Intersegment notes pa
Slide 45: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt 45 Dec 31, Dec 31, ($mn) Q4 2020 Q4 2019 2020 2019 Total (Debt) (1) (26,053) (24,854) Net (debt)/cash of Industrial Activities at beginning of period (1,544) (2,370) Adjusted EBIT of Industrial Activities 520 301 Financial Services Third Party Debt 18,782 19,62
Slide 46: Reconciliation of Operating Activities cash to Free cash flow
Reconciliation of Net cash provided by (used in) Operating Activities to Free 46 cash flow of Industrial Activities under U.S. GAAP ($mn) Q4 2020 Q4 2019 FY 2020 FY 2019 Net cash provided by (used in) Operating Activities 2,766 1,970 5,529 1,826 Less: Cash flows from Operating Activities of Financia
Slide 47: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown 47 ($mn) Outstanding Dec 31, 2020 2021 2022 2023 2024 2025 Beyond 3.4 Bank Debt 1.8 0.8 0.3 0.2 0.1 0.1 10.4 Capital Market 1.9 1.3 1.7 1.5 1.0 3.1 0.4 Other Debt 0.1 0.2 0.0 0.0 0.0 0.0 14.1 Cash Portion of (Debt) Maturities 3.9 2.3 2.0 1.7 1.1 3.2 (9.7) Cash & Ca
Slide 48: Q4 2020 Debt Maturity Schedule
Q4 2020 | Debt Maturity Schedule 48 Industrial Activities Financial Services (0.7) (1.1) (1.1) (0.9) (0.9) (2.6) (3.2) (1.3) (0.9) (0.7) (0.2) (0.6) 2021 2022 2023 2024 2025 Beyond 2021 2022 2023 2024 2025 Beyond Capital Market Bank Debt Other Q4 & FY 2020 Results Review February 3rd, 2021
Slide 49: Europe Trucks | Company performance (Q4)
Europe Trucks | Company performance 49 Q4 2017 2018 2019 2020 MKT SHARE(1) Light (3.5-7.49t) 16.4% 13.5% 13.4% 12.7% M&H (≥7.5t) 9.5% 6.6% 7.6% 9.0% Europe (*) 13.6% 11.0% 11.5% 11.5% B-TO-B Light (3.5-7.49t) 1.02 0.94 0.92 0.93 M&H (≥7.5t) 0.91 0.97 1.03 1.05 Europe 0.99 0.94 0.95 0.96 Δ 17/18 Δ 18
Slide 50: Europe Trucks | Company performance (FY)
Europe Trucks | Company performance 50 FY 2017 2018 2019 2020 MKT SHARE(1) Light (3.5-7.49t) 15.0% 13.9% 13.2% 11.5% M&H (≥7.5t) 9.4% 7.6% 6.6% 8.8% Europe (*) 12.8% 11.6% 10.9% 10.7% B-TO-B Light (3.5-7.49t) 1.03 0.99 0.98 1.20 M&H (≥7.5t) 1.03 0.92 1.02 1.17 Europe 1.03 0.98 0.99 1.19 Δ 17/18 Δ 18
Slide 51: Geographic Information
Geographic Information 51 The composition of our regions part of the geographic information is as follow: ▪ North America: United States, Canada and Mexico; ▪ Europe: member countries of the European Union, European Free Trade Association, Ukraine, and Balkans; ▪ South America: Central and South Ame
Slide 52: Non-GAAP Financial Measures
Non-GAAP Financial Measures 52 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 operating results and enhance the readers’ a
Slide 53: Investor Relations Team
Investor Relations Team ▪ 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 ▪ Giovanni Somajni – Investor Relations Europe +44 (207) 76 - 60369 e-mail: investor.relations@cnhind.co