Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — H1 2016 Earnings Presentation
36 slides from Cnh Industrial's earnings presentation, Jul 26, 2016
Slide 1: Q2 & H1 2016 Results Review
Q2 & H1 2016 Results Review July 26th, 2016 Exhibit 99.2
Slide 2: Safe Harbor Statement and Disclosures
Safe Harbor Statement and Disclosures July 26th, 2016 All statements other than statements of historical fact contained in this presentation including statements regarding our: competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect
Slide 3: Q2 2016 Highlights
Q2 2016 Highlights July 26th, 2016 Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated (1) Non-GAAP measures (definition in appendix) Industrial Activities operating margin increasing to 7.0% Operating profit (1) and margin increased year-over-year, led by improveme
Slide 4: Financial Highlights
Financial Highlights
Slide 5: Q2 2016 Financial Highlights
Q2 2016 Financial Highlights July 26th, 2016 Q2 2016 Q2 2015 Δ Net Sales Ind. Activities ($bn) 6,450 6,634 -2.8% Net Sales change in Constant currency: -1.8% Operating Profit Ind. Activities ($mn) (1) 453 401 13.0% Operating Margin Ind. Activities 7.0% 6.0% 1.0 p.p. Net Income ($mn) 129 122 7 Dilute
Slide 6: Q2 2016 Net Sales Industrial Activities
Q2 2016 Net Sales Industrial Activities Net Sales Walk By Segment ($Mn) (*) (*) Note: Net Sales: Including Other Activities, Unallocated Items & Adjustment & Eliminations Net Sales By Currency (1) ($mn) Agricultural Equipment Commercial Vehicles Powertrain Construction Equipment (1) Note: Net Sales:
Slide 7: Q2 2016 Operating Profit and Adjusted Net Income Walk
Q2 2016 Operating Profit Industrial Activities and Adjusted Net Income Walk July 26th, 2016 Operating Profit Industrial Activities ($Mn) Adjusted Net Income Walk ($Mn) Consolidated Operating Profit 21 52 401 38 (18) 33 (*) 13 (14) 453 6.0% 7.0% 141 10 22 216 52 (21) (10) (3) 25 (*) Excluding the $25
Slide 8: Q2 2016 Cash Flow – Change in Net Industrial Debt
Q2 2016 Cash Flow – Change in Net Industrial Debt July 26th, 2016 Net Industrial Cash Flow 602 Change in Net Debt 335 Mar 31, 2016 Net Income D&A Change in provision and similar Change in WC Tangible & Intangible Capex Other changes Capital Increase and dividends FX Translation Effects and Other Jun
Slide 9: Q2 2016 Financial Services performance
Q2 2016 Financial Services performance July 26th, 2016 Net Income ($mn) Delta % Q2 ’16 vs. Q2 ‘15 Net income was $87mn, down $11mn compared to Q2 2015 Lower average portfolio and reduction in interest spreads Q2 ’16 Profitability ratios: Gross Margin / Average Assets On-Book = 3.7% RoA ** = 2.0% (**
Slide 10: June 30, 2016 Liquidity & Debt Maturity
June 30, 2016 Liquidity & Debt Maturity July 26th, 2016 Available Liquidity ($bn) Debt Maturity Schedule1 ($bn) 1 Represents cash portion of debt maturities as of 06/30/2016 2 Of which $0.9bn ABS related & Restricted Cash Undrawn M/T Committed Lines Bank Debt Capital Market Cash Other Company Availa
Slide 11: Industrial Activities Overview
Industrial Activities Overview
Slide 12: Agricultural Equipment Q2 2016 Financial Results
Agricultural Equipment Q2 2016 Financial Results July 26th, 2016 Net Sales by Region & Product ($) Net sales were $2.8bn, down 7.5% compared to Q2 2015, (down 6.3% on a constant currency basis) Operating Profit Walk ($Mn) 38 8.7% 10.7% 263 (104) 22 54 18 7 41 301 NAFTA LATAM APAC EMEA Tractors Other
Slide 13: Agricultural Equipment Inventory management
Agricultural Equipment Inventory management (units of equipment) – Industry units July 26th, 2016 (*) Source: CNH Industrial Internal Data Industry Units (1) Sum of 140+/4WD, Combines, Major Crop Production NAFTA Row Crop (1) Production (Units) (31%) (28%) NAFTA row crop (1) Channel Inventory (Units
Slide 14: Construction Equipment Q2 2016 Financial Results
Construction Equipment Q2 2016 Financial Results July 26th, 2016 Net Sales by Region & Product ($) Operating Profit Walk ($Mn) 35 4.7% 2.9% (28) (6) 11 2 1 2 17 (18) Net sales were $595mn, down 19.6% vs. Q2 2015 (down 18.4% on a constant currency basis) Light Other Heavy NAFTA LATAM APAC EMEA Volume
Slide 15: Construction Equipment Inventory management
Construction Equipment Inventory management (units of equipment) – Industry units July 26th, 2016 Note: As of Q2 2014, industry volume data for Heavy Construction Equipment includes compaction equipment, which historically was not in the Light or Heavy Equipment definitions. Further, industry volume
Slide 16: Commercial Vehicles Q2 2016 Financial Results
Commercial Vehicles Q2 2016 Financial Results July 26th, 2016 Net Sales by Region & Product ($) Operating Profit Walk ($Mn) Trucks Specialty Vehicles Buses Net Sales at $2.6bn, up 5.1% vs. Q2 2015 (up 6.0% on a constant currency basis) 42 (*) 0 58 (*) 20 32 6 0 0 100 3.9% NAFTA LATAM APAC EMEA 1.7%
Slide 17: Commercial Vehicles Inventory management
Commercial Vehicles Inventory management (units of equipment) – Industry units July 26th, 2016 Commercial Vehicles (All Equipment) * Reflects aggregate for key markets where the Company competes: EMEA: 27 of the member countries of the European Union; LATAM: Brazil, Argentina and Venezuela; APAC: Ru
Slide 18: Commercial Vehicles Major launches
Commercial Vehicles Major launches July 26th, 2016 Greener & more Efficient Best-in-class driveline New Euro 6 engines delivering higher power and torque Up to 8% more fuel efficient Hi-Matic state-of-the-art automatic transmission now available on full range New Daily BUSINESS UP Open platform app
Slide 19: Powertrain Q2 2016 Financial Results
Powertrain Q2 2016 Financial Results July 26th, 2016 Q2 2016 third party Net sales at 46% vs. 42% in Q2 2015 Net Sales & Operating Profit ($) Units Sold Q2 ’16 vs. Q2 ’15 Engines sold to third party at 54% vs. 51% in Q2 2015 Net sales were $1.0bn, up 8.0% vs. Q2 2015 ( up 7.0% on a constant currency
Slide 20: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets
Slide 21: FY 2016E Industry Units Outlook
FY 2016E Industry Units Outlook July 26th, 2016 1 Reflects aggregate for key markets where Company competes LATAM APAC NAFTA EMEA Agricultural Equipment Tractors Combines 0-140 HP Flat 140+ HP (20%) - (25%) Industry (5%) (15%) - (20%) Construction Equipment Light Heavy Industry Flat (5%) – (10%) Agr
Slide 22: FY 2016E US GAAP Financial Targets
FY 2016E US GAAP Financial Targets July 26th, 2016 CNH Industrial is confirming its 2016 guidance as follows: •Net sales of Industrial Activities between $23 billion and $24 billion, with an operating margin of Industrial Activities between 5.2% and 5.8%; •Net industrial debt at the end of 2016 betw
Slide 23: Appendix
Appendix
Slide 24: Q2 2016 Results highlights (EU-IFRS & US GAAP)
Q2 2016 Results highlights (EU-IFRS $ & US GAAP $) – delta with previous year REVENUES Trading Profit Operating Profit MARGIN (IFRS) Δ (US GAAP) Δ (IFRS) Δ (US GAAP) Δ (IFRS) (US GAAP) Agricultural Equipment 2,808 (227) 2,808 (227) 228 17 301 38 8.1% 10.7% Construction Equipment 595 (145) 595 (145)
Slide 25: H1 2016 Results highlights (EU-IFRS & US GAAP)
H1 2016 Results highlights (EU-IFRS $ & US GAAP $) – delta with previous year REVENUES Trading Profit Operating Profit MARGIN (IFRS) Δ (US GAAP) Δ (IFRS) Δ (US GAAP) Δ (IFRS) (US GAAP) Agricultural Equipment 4,932 (680) 4,932 (680) 247 (121) 391 (76) 5.0% 7.9% Construction Equipment 1,131 (211) 1,13
Slide 26: Q2 & H1 2016 From Operating Profit to Net Income (Loss)
Q2 & H1 2016 From Operating Profit to Net Income (Loss) under US GAAP ($mn) Q2 2016 Q2 2015 Δ H1 2016 H1 2015 Δ Industrial Activities Operating profit 453 401 52 631 624 7 Financial Services Operating profit 119 140 (21) 249 269 (20) Elimination & Other (84) (74) (10) (160) (142) (18) Operating Prof
Slide 27: Reconciliation of Net Income / (Loss) to Adjusted Net Income
Q2 & H1 2016 Reconciliation of Net Income / (Loss) to Adjusted Net Income (US GAAP) July 26th, 2016 Second Quarter First Half 2016 2015 2016 2015 Net Income / (Loss) 129 122 (384) 145 Restructuring expenses, net of tax 10 22 25 34 EC Settlement 49 - 551 - Chinese JV charge for exiting a line of busi
Slide 28: Operating Profit US GAAP to Trading Profit EU-IFRS
Q2 & H1 2016 Operating Profit US GAAP to Trading Profit EU-IFRS - Reconciliation The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading Profit under IFRS: Second Quarter First Half 2016 % of Net Sales 2015 % of Net Sales 2016 % of Net Sales 2015 % of Net Sales US GAAP -
Slide 29: Net Income US GAAP to Profit under EU-IFRS
Q2 & H1 2016 Net Income / (Loss) US GAAP to Profit / (Loss) under EU-IFRS - Reconciliation The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: Second Quarter First Half 2016 EPS 2015 EPS 2016 EPS 2015 EPS Net Income / (Loss) attributable to CNH Industrial N.V. 126
Slide 30: Total Equity – US GAAP to EU-IFRS Reconciliation
June 30, 2016 Total Equity – US GAAP to EU-IFRS Reconciliation July 26th, 2016 Jun. 30, 2016 Dec. 31, 2015 Total Equity in accordance with US GAAP 4,428 4,843 (a) Development costs 2,545 2,536 (b) Goodwill and other intangible assets (110) (113) (c) Defined benefit plans (20) - (d) Restructuring pro
Slide 31: Net Debt under US GAAP
June 30, 2016 Net Debt under US GAAP ($MN) July 26th, 2016 Consolidated Industrial Activities Financial Services Jun. 30, 2016 Dec. 31, 2015 (1) Jun. 30, 2016 Dec. 31, 2015 (1) Jun. 30, 2016 Dec. 31, 2015 (1) Third party debt 26,308 26,301 7,529 7,214 18,779 19,087 Intersegment notes payable - - 714
Slide 32: Q2 2016 Gross Debt – Breakdown
Q2 2016 Gross Debt – Breakdown March 31, 2016 June 30, 2016 Industrial Financial Services Industrial Financial Services 2.1 2.6 Bank Debt 1.9 2.5 4.9 4.1 Capital Market 5.4 4.1 0.2 0.1 Other Debt 0.1 0.1 7.1 6.7 Cash Maturities 7.5 6.6 0.0 9.0 ABS / Securitization 0.0 9.9 0.0 1.2 Warehouse Facilitie
Slide 33: Q2 2016 Debt Maturity Schedule - Breakdown
Q2 2016 Debt Maturity Schedule - Breakdown Outstanding June 30, 2016 6M 2016 2017 2018 2019 2020 Beyond 4.4 Bank Debt 0.7 1.2 1.3 0.7 0.2 0.2 9.5 Capital Market 0.5 2.2 2.6 1.7 0.6 2.0 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 14.2 Cash Portion of Debt Maturities 1.3 3.4 3.9 2.4 0.9 2.3 (5.8) Cash & Ma
Slide 34: Geographic Information
Geographic Information Certain financial and market information in this presentation has been presented by geographic area. CNH Industrial defines its geographic areas as NAFTA: United States, Canada and Mexico LATAM: Central and South America, and the Caribbean Islands APAC: Continental Asia (inclu
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 results and allow management and investors to a
Slide 36: Investor Relations Team
Investor Relations Team Federico Donati – Head of Investor Relations ( +44 (207) 76 - 60386 ( +39 (011) 00 - 62756 Noah Weiss – Investor Relations North America ( +1 (630) 887 - 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com Contacts July 26th, 2016