Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q4 2024 Earnings Presentation
36 slides from Cnh Industrial's earnings presentation, Feb 4, 2025
Slide 1: Q4 2024 Results Review
Q4 2024 RESULTS REVIEW February 4, 2025
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: Q4 2024 Main Achievements
Q4 2024 | MAIN ACHIEVEMENTS Dealer inventory1 reduced by $700M+ supported by sales campaigns and lower production hours Achieved ~$600M annual run rate savings through operational improvements and restructuring Completed comprehensive review of field issues and launched customer service support plan
Slide 4: Q4 2024 Results
Q4 2024 | RESULTS Consolidated Adj. EBIT1 Net Income Diluted EPS Revenues Industrial Activities $4.9B $194M $176M $0.14 (28)% (71)% (70)% $(0.30) Net Sales Adj. EBIT%1 Adjusted Adjusted Industrial Activities Industrial Activities Net Income1 Diluted EPS1 $4.1B 4.7% $196M $0.15 (31)% (630) bps (63)%
Slide 5: FY 2024 Results
FY 2024 | RESULTS Consolidated Adj. EBIT1 Net Income Diluted EPS Revenues Industrial Activities $19.8B $1.4B $1.3B $0.99 (20)% (47)% (45)% $(0.70) Net Sales Adj. EBIT%1 Adjusted Adjusted Industrial Activities Industrial Activities Net Income1 Diluted EPS1 $17.1B 8.2% $1.3B $1.05 (23)% (370)bps (40)%
Slide 6: Q4 2024 Business Highlights
Q4 2024 | BUSINESS HIGHLIGHTS Prioritized inventory reduction and pricing discipline Successful retail sales campaigns amid overall weak industry demand Ag production hours down 34% YoY as planned Resilient Construction gross margin through cost takeouts Solid Financial Services net income with soun
Slide 7: Q4 / FY 2024 Financial Highlights
Q4 / FY 2024 | FINANCIAL HIGHLIGHTS ($B, except EPS) 22.1 2.2 $1.63 1.6 17.1 1.2 1.3 $1.05 0.8 6.0 0.5 $0.39 4.1 -48% n/a 0.2 $0.15 -31% -23% -63% -40% -$0.24 -$0.58 (0.4) Q4 FY Q4 FY Q4 FY Q4 FY Net Sales Adjusted Adjusted Free Cash Flow1 Industrial Activities Net Income1 Diluted EPS1 Industrial Ac
Slide 8: Q4 / FY 2024 Agriculture
Q4 / FY 2024 | AGRICULTURE Net Sales ($B) Gross Margin1 18.1 25.5% 23.3% 20.6% 22.9% 14.0 4.9 2023 3.4 2024 -31% -23% Δ YoY -2.7pp -2.6pp Q4 FY Q4 FY Adjusted EBIT ($M) 12.8% o/w Warranty: Q4 (52) FY (146) 7.2% Q4 Vol. Pricing, Prod. FX & 2023 SG&A R&D 2024 & Mix Net Cost Other 2,636 (1,549) 91 107
Slide 9: Q4 / FY 2024 Construction
Q4 / FY 2024 | CONSTRUCTION Net Sales ($B) Gross Margin1 3.9 14.8% 14.8% 15.6% 16.3% 3.1 1.1 2023 0.7 2024 -33% -22% Δ YoY 0.0pp +0.7pp Q4 FY Q4 FY Adjusted EBIT ($M) 5.8% 2.5% Q4 Vol. Pricing, Prod. FX & 2023 SG&A R&D 2024 & Mix Net Cost Other 238 (181) (22) 107 37 9 (19) 169 FY 6.1% 5.5% (1) Gross
Slide 10: Q4 / FY 2024 Financial Services
Q4 / FY 2024 | FINANCIAL SERVICES Net Income Profitability Ratios ($M) 4.0% 3.4% 379 3.2% 3.2% 371 3.0% 2.4% 2.1% 2023 1.7% 2.0% 2024 113 92 Δ YoY 1.0% -19% +2% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q4 FY Gross Margin / Avg. Assets on Book Return on Assets1 Managed Portfolio2 & Retai
Slide 11: Cost Reduction Actions
COST REDUCTION ACTIONS Ongoing focus on both COGS and SG&A of Industrial Activities 2024 Results1 2025 Tailwinds & Headwinds COGS ✓ $304M cost out + $60-80M2 carryover benefit - Manufacturing labor & in 2025 from 2024 actions overhead cost inflation ✓ Manufacturing efficiencies + No repeat of certai
Slide 12: 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 13: 2025 Outlook – Agriculture
2025 OUTLOOK – AGRICULTURE Total Industry Unit Forecast1 North South EMEA APAC America America LHP Tractors (10)% – (5)% (5)% – flat flat (5)% – flat HHP Tractors (30)% – (25)% Combines (25)% – (20)% flat – 5% flat (10)% – (5)% Total Industry Volume % change FY 2025 vs. FY 2024 reflecting the aggreg
Slide 14: 2025 Outlook – Construction
2025 OUTLOOK – CONSTRUCTION Total Industry Unit Forecast1 North South EMEA APAC America America Light (10)% – (5)% (5)% – flat flat – 5% (5)% – flat Heavy (10)% – (5)% (5)% – flat flat – 5% (5)% – flat Total Industry Volume % change FY 2025 vs. FY 2024 reflecting the aggregate for key markets where
Slide 15: 2025 Outlook – Financial Targets
2025 OUTLOOK – FINANCIAL TARGETS 2024 A 2025 E Net Sales $17.1B (17)-(12)% YoY1 Industrial Activities Adj. EBIT margin2 8.2% 6.0% - 7.0% R&D expenses $0.9B ~$0.8B Capex $0.5B ~$0.5B Free Cash Flow2 $(0.4)B $0.2B - $0.5B Company Adj. Effective Tax rate2 22.7% 24% - 26% Adj. Diluted EPS2 $1.05 $0.65 -
Slide 16: 2025 Priorities & Outlook
2025 PRIORITIES & OUTLOOK Closely observing regional demand indicators Production levels to remain fairly low through H1 by design Further improvement of quality and customer service Sustained investments in key technologies Continued focus on sourcing and manufacturing efficiencies Investor Day to
Slide 17: Appendix
APPENDIX a a
Slide 18: Q4 / FY 2024 YoY Unit Performance
Q4 / FY 2024 | YOY UNIT PERFORMANCE NORTH SOUTH EMEA1 APAC1 AMERICA1 AMERICA1 Q4 FY Q4 FY Q4 FY Q4 FY 0-140 HP – Small Tractors (10)% (13)% Total Industry2 (6)% (13)% (5)% (9)% 10% (1)% 140+ HP – Large Tractors (34)% (16)% Combines (33)% (22)% (31)% (43)% (21)% (31)% (1)% 11% Light 4% (5)% (17)% (19
Slide 19: Q4 / FY 2024 Financial Summary
Q4 / FY 2024 | FINANCIAL SUMMARY ($M) Q4 2023 Q4 2024 Δ YoY FY 2023 FY 2024 Δ YoY U.S. GAAP Revenues 6,792 4,876 (28)% 24,687 19,836 (20)% Net Sales | Industrial Activities 6,018 4,129 (31)% 22,080 17,060 (23)% Net Income 583 176 (70)% 2,287 1,259 (45)% Diluted EPS $0.44 $0.14 $(0.30) $1.69 $0.99 $(
Slide 20: Q4 2024 Industrial Activities Net Sales
Q4 2024 | INDUSTRIAL ACTIVITIES NET SALES Agriculture Construction Industrial Activities1 $3,411M $718M $4,129M Q4 2023 (31)% YoY (30)% @CC2 (33)% YoY (31)% @CC2 (31)% YoY (30)% @CC2 Q4 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 21: FY 2024 Industrial Activities Net Sales
FY 2024 | INDUSTRIAL ACTIVITIES NET SALES Agriculture Construction Industrial Activities1 $14,007M $3,053M $17,060M FY 2023 (23)% YoY (22)% @CC2 (22)% YoY (21)% @CC2 (23)% YoY (22)% @CC2 FY 2024 By Region By Region By Region as reported as reported as reported NA EMEA SA APAC NA EMEA SA APAC NA EMEA
Slide 22: Q4 / FY 2024 Financials by Segment
Q4 / FY 2024 | FINANCIALS BY SEGMENT ($M) Revenues & Adj. EBIT Gross Profit Gross Margin Adj. EBIT1 Net Sales Margin1 Q4 23 Q4 24 Q4 23 Q4 24 Q4 23 Q4 24 Q4 23 Q4 24 Q4 23 Q4 24 Agriculture 4,947 3,411 1,154 701 23.3% 20.6% 635 244 12.8% 7.2% Construction 1,071 718 159 106 14.8% 14.8% 62 18 5.8% 2.5
Slide 23: Q4 / FY 2024 CapEx and R&D
Q4 / FY 2024 | CAPEX AND R&D ($M) Q4 2023 Q4 2024 FY 2023 FY 2024 Investments in property, plant and equipment, and intangible assets 240 204 637 533 Breakdown by Category New Product & Technology 25% 32% 31% 41% Maintenance & Other 68% 61% 61% 53% Industrial Capacity Expansion & LT Investments 7% 7
Slide 24: Debt Maturity Schedule Breakdown
DEBT MATURITY SCHEDULE | BREAKDOWN ($B) Outstanding DeC. 31, 2024 2025 2026 2027 2028 2029 Beyond 3.6 Bank Debt 2.0 0.4 0.2 0.2 0.2 0.6 11.1 Capital Market 2.7 2.5 2.4 1.0 1.7 0.8 0.2 Other Debt 0.2 - - - - - 14.9 Cash Portion of Debt Maturities 4.9 2.9 2.6 1.2 1.9 1.4 of which Industrial Activities
Slide 25: Reconciliations
RECONCILIATIONS a a
Slide 26: Reconciliation of Net Income to Adj. EBIT of Industrial Activities
RECONCILIATION OF NET INCOME TO ADJ. EBIT OF INDUSTRIAL ACTIVITI ES ($M) Q4 2023 Q4 2024 FY 2023 FY 2024 Net Income 583 176 2,287 1,259 Less: Consolidated income tax expense (58) (89) (594) (336) Consolidated income before taxes 641 265 2,881 1,595 Less: Financial Services Financial Services Net Inc
Slide 27: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW OF IND. ACTIVITIES UNDER U.S. GAAP ($M) Q4 2023 Q4 2024 FY 2023 FY 2024 Net cash provided by (used in) Operating Activities 1,515 1,692 907 1,968 Cash flows from Operating Activities of Financial Services net of
Slide 28: 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 ($M) Q4 2023 Q4 2024 FY 2023 FY 2024 Net income (loss) 583 176 2,287 1,259 Adjustments impacting Income (los
Slide 29: Geographic Information
GEOGRAPHIC INFORMATION The composition of our regions part of the geographic information is as follows: ▪ North America: United States, Canada, and Mexico ▪ Europe, Middle East, and Africa (EMEA): member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, B
Slide 30: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CNH monitors its operations through the use of several non-GAAP financial measures. CNH’s management believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the readers’ ability to assess CNH’s fi
Slide 31: Accounting Revision
ACCOUNTING REVISION a a
Slide 32: Accounting Revision by Quarter (1/2)
ACCOUNTING REVISION BY QUARTER (1/2) ($M) Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 H1 2024 Equity in income of unconsolidated subsidiaries and affiliates As reported 33 64 79 98 274 77 79 156 Revision (15) (17) (30) (34) (96) (33) (34) (67) As revised 18 47 49 64 178 44 45 89 Net income (loss) As
Slide 33: Accounting Revision by Quarter (2/2)
ACCOUNTING REVISION BY QUARTER (2/2) ($M) Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 H1 2024 (1) Adjusted net income As reported 475 711 570 557 2,313 421 485 906 Revision (15) (17) (30) (34) (96) (33) (34) (67) As revised 460 694 540 523 2,217 388 451 839 Adjusted diluted EPS(1) As reported $0.35
Slide 34: Reconciliation of Adj. EBIT for Industrial Activities to Net Income
RECONCILIATION OF ADJ. EBIT FOR INDUSTRIAL ACTIVITIES TO NET INCOME ($M) Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 H1 2024 Net Income (loss) - as reported 486 710 570 617 2,383 402 438 840 Revision impacts (15) (17) (30) (34) (96) (33) (34) (67) Net income (loss) - as revised 471 693 540 583 2,287
Slide 35: Reconciliation of Adjusted Net Income and Recasted Adjusted Diluted EPS
RECONCILIATION OF ADJUSTED NET INCOME TO NET INCOME AND CALCULATION OF THE RECASTED ADJUSTED DILUTIVE EPS ($M) Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 H1 2024 Net Income (loss) - as reported 486 710 570 617 2,383 402 438 840 Revision impacts (15) (17) (30) (34) (96) (33) (34) (67) Net income (lo
Slide 36: 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