Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q3 2022 Earnings Presentation
34 slides from Cnh Industrial's earnings presentation, Nov 8, 2022
Slide 1: Q3 2022 Results Review
Q3 2022 RESULTS REVIEW November 8th, 2022 Q3 2022 Results Review | November 8, 2022
Slide 2: Safe Harbor Statement and Disclosures
SAFE HARBOR STATEMENT AND DISCLOSURES All statements other than statements of historical fact contained in this earning release, including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss
Slide 3: Third Quarter 2022 Main Highlights
THIRD QUARTER 2022 MAIN HIGHLIGHTS Revenues - $bn AG Gross Margin - %(1) I.A. Free Cash Flow - $mn(2) Q3 2021 4.7 Q3 2021 22.1% Q3 2021 -70 Q3 2022 5.9 Q3 2022 25.0% Q3 2022 202 Positive, despite seasonality +29% at constant currency Pricing > prod. costs of working capital Supply chain still constr
Slide 4: Agriculture
AGRICULTURE $4.5B +32% $666M 14.8% net sales Q3 22 change net sales adj. EBIT(1) Q3 22 adj. EBIT margin(1) (@CC*) Price / cost positive Gross margin at 25.0%, +290 bps YoY Supply chain driving elevated manufacturing inventories Demand strong, especially in the Americas Accepting orders through Q3 20
Slide 5: Technology Leadership & Customer Inspired Innovation
TECHNOLOGY LEADERSHIP & CUSTOMER INSPIRED INNOVATION Case IH Trident™ 5550 New Holland Case IH Austoft 9900 applicator with Raven Guardian™ sprayers Sugarcane Harvester Autonomy™ with Raven technology Q3 2022 Results Review | November 8, 2022 5
Slide 6: Construction
CONSTRUCTION $895M +20% $24M 2.7% net sales Q3 22 change net sales adj. EBIT(1) Q3 22 adj. EBIT margin(1) (@CC*) Pricing offsetting higher production cost Gross margin at 12.6% Sampierana integration continues Strong order coverage in North America and Europe Launched Minotaur™ Compact Dozer Loader
Slide 7: Third Quarter 2022 | Financial Highlights
THIRD QUARTER 2022 | FINANCIAL HIGHLIGHTS Industrial Activities Consolidated Net Sales Gross Margin Adjusted Diluted EPS(*) ($mn) 23.0% $0.41 5,396 +260 bps +$0.07 +24% 20.4% 4,336 $0.34 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 2022 2021 Adjusted EBIT(*) Free Cash Flow(*) Available Liquidity(
Slide 8: Third Quarter 2022 | Industrial Activities Adj. EBIT Walk
THIRD QUARTER 2022 | INDUSTRIAL ACTIVITIES ADJ. EBIT (1) WALK ($mn) 12.4% 9.7% ADJ. EBIT(1) Unallocated, ADJ. EBIT(1) Vol. & Mix Pricing, Net Prod. Cost SG&A R&D FX | Other Q3’21 Elim. & Other Q3’22 0100 200 300 400 500 600 0100 200 300 400 500 600 -500 -400 -300 -200 -1000 -600 -500 -400 -300 -200
Slide 9: Third Quarter 2022 | Financial Services
THIRD QUARTER 2022 | FINANCIAL SERVICES Net Income Profitability Ratios ($mn) 4.0% 3.6% 3.5% 3.1% Q3 2022 86 3.0% 2.5% 2.2% 1.7% 2.0% Q3 2021 96 1.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2022 Gross Margin / Average Assets on Book ROA(**) Managed Portfolio(*) & Retail Originations(*) Delinquenc
Slide 10: Third Quarter 2022 | Industrial Activities Change in Net Debt
THIRD QUARTER 2022 | INDUSTRIAL ACTIVITIES CHANGE IN NET DEBT (*) ($mn) Shares BB (76) Dividends (1) Free Cash Flow(*) of Industrial Activities 202 Change in Change in Dividends & I.A. Net Debt Cash Interest PP&E Other I.A. Net Debt Adj. EBIT D&A Working Provisions & Equity FX & Other June 30, 2022
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES ORGANIC GROWTH Capex up 18% from Q3 2021, R&D up 36%, both in line with targets CREDIT RATING Current long-term ratings: Moody’s Baa2; S&P BBB and Fitch BBB+ Support growth and GROSS DEBT ensure shareholder Gross Debt stable in Q3 at constant currency returns, while mai
Slide 12: FY 2022 Estimates | Industry Unit Performance vs. FY 2021
FY 2022 ESTIMATES | INDUSTRY UNIT PERFORMANCE VS. FY 2021 NORTH REST OF SOUTH EUROPE(*) APAC(*) AMERICA(*) EMEA(*) AMERICA(*) 0-140 HP Tractors (15%) – (10%) (5%) (5%) – Flat Flat – 5% Flat 140+ Large Tractors 10% – 15% Combines 10% Flat (40%) Flat – 5% 25% Light (5%) (5%) – Flat (10%) – (5%) 20% –
Slide 13: FY 2022 E | Guidance
FY 2022 E | GUIDANCE INDUSTRIAL ACTIVITIES Previous Guidance Updated Guidance Net Sales(1) +12% to +14% +16% to +18% SG&A ≤ 7.5% < 7.5% Free Cash Flow(2) > $1.0B Confirmed R&D ~ $1.4B Confirmed CapEx Significant uncertainties remain, including rising inflation, geopolitical instability, the war in U
Slide 14: Preliminary 2023 Macro Outlook
PRELIMINARY 2023 MACRO OUTLOOK Slowdown of global growth in very uncertain macro scenario Inflation to be monitored; affected by multiple headwinds Farm income sustained despite input cost increases Supply chain still unstable, however progressively improving Tight channel inventories, linked to sup
Slide 15: CNHI Focus and Priorities
CNHI FOCUS AND PRIORITIES Order coverage strong despite limited order windows Investing in technology and products Strategic Sourcing Program roll-out Strike ongoing at 2 of 42 plants; facilities still operational Building the tech stack with Raven as the anchor Voluntarily transition to filing on F
Slide 16: Appendix
APPENDIX Q3 2022 Results Review | November 8, 2022
Slide 17: Q3 2022 | Unit Performance vs. Q3 2021
Q3 2022 | UNIT PERFORMANCE VS. Q3 2021 NORTH SOUTH EUROPE(*) REST OF EMEA(*) APAC(*) AMERICA(*) AMERICA(*) 0-140 HP Tractors (16%) (8%) (2%) 12% 8% 140+ Large Tractors 9% Industry Combines 13% 12% (57%) 20% 12% Light (1%) (6%) (9%) 13% (8%) Heavy 9% (9%) 5% 27% (10%) Order Book(1) Order Book(1) Orde
Slide 18: Q3 / 9M 2022 | Financial Summary
Q3 / 9M 2022 | FINANCIAL SUMMARY ($mn) Q3 2022 Q3 2021 Δ YoY 9M 2022 9M 2021 Δ YoY U.S. GAAP Revenues 5,881 4,746 +24% 16,608 14,016 +18% Net Sales | Industrial Activities 5,396 4,336 +24% 15,189 12,808 +19% Net Income 559 460 +99 1,447 1,337 +110 Diluted EPS ($) 0.41 0.34 +0.07 1.06 0.98 +0.08 Non
Slide 19: Q3 2022 | Industrial Activities Net Sales
Q3 2022 | INDUSTRIAL ACTIVITIES NET SALES AG AG CE Industrial Activities(1)(1) IndustrialActivities $4,501mn $895mn $5,396mn +26% YoY +32% @CC +16% YoY +20% @CC +24% YoY +30% @CC By Region By Region By Region as reported as reported as reported Q3 2022 NA EMEA SA APAC NA EMEA SA APAC NA EMEA SA APAC
Slide 20: Q3 / 9M 2022 | Financials by Segment
Q3 / 9M 2022 | FINANCIALS BY SEGMENT ($mn) Revenues Gross Profit Adj. EBIT Adj. EBIT Margin % Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Agriculture 4,501 3,563 1,127 787 666 415 14.8% 11.6% Construction Equip. 895 773 113 94 24 21 2.7% 2.7% Elimination & Other - - - 3 (20) (16) Industrial Acti
Slide 21: Q3 / 9M 2022 | Net Sales and Adj. EBIT Breakdown
Q3 / 9M 2022 | NET SALES AND ADJ. EBIT BREAKDOWN ($mn) Net Sales Split AG CE AG CE Q3 22 Q3 21 Q3 22 Q3 21 9M 22 9M 21 9M 22 9M 21 NA 38% 36% NA 49% 44% NA 37% 35% NA 48% 44% EMEA 28% 36% EMEA 25% 26% EMEA 32% 40% EMEA 25% 27% LA 23% 18% LA 19% 20% LA 21% 15% LA 19% 16% APAC 11% 10% APAC 7% 10% APAC
Slide 22: Q3 / 9M 2022 | CapEx and R&D
Q3 / 9M 2022 | CAPEX AND R&D ($mn) Q3 2022 Q3 2021 9M 2022 9M 2021 Investments in property, plant and equipment, and intangible assets 106 90 243 195 Breakdown by Category New Product & Technology 50% 37% 38% 42% Maintenance & Other 33% 48% 42% 48% Industrial Capacity Expansion & LT Investments 17%
Slide 23: Debt Maturity Schedule | Breakdown
DEBT MATURITY SCHEDULE | BREAKDOWN ($bn) Outstanding 3M 2022 2023 2024 2025 2026 Beyond Sept 30, 2022 2.0 Bank Debt 0.5 0.8 0.3 0.2 0.1 0.2 9.6 Capital Market 0.6 2.1 2.0 1.4 1.7 1.8 0.1 Other Debt 0.1 0.0 0.0 0.0 0.0 0.0 11.9 Cash Portion of (Debt) Maturities 1.3 2.9 2.3 1.6 1.8 2.0 of which Indust
Slide 24: Reconciliations
RECONCILIATIONS Q3 2022 Results Review | November 8, 2022
Slide 25: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP)
RECONCILIATION OF NET INCOME (LOSS) TO ADJ. EBIT BY SEGMENT (US GAAP) ($mn) Q3 2022 9M 2022 Unall. Items, Industrial Unall. Items, Industrial AG CE AG CE Elim. & Other Activities Elim. & Other Activities Consolidated Net income 559 1,447 Less: Consolidated Income tax (expense) benefit (192) (579) Co
Slide 26: Reconciliation of Net Income (Loss) to Adj. EBIT by Segment (US GAAP)
RECONCILIATION OF NET INCOME (LOSS) TO ADJ. EBIT BY SEGMENT (US GAAP) Q3 2021 9M 2021 ($mn) Unall. Items, Industrial Unall. Items, Industrial AG CE AG CE Elim. & Other Activities Elim. & Other Activities Consolidated Net income 329 1,453 Less: Consolidated Net Income (loss) of Discontinued Operation
Slide 27: Reconciliation of Total Debt to Net Debt (US GAAP)
RECONCILIATION OF TOTAL DEBT TO NET DEBT (US GAAP) ($mn) Consolidated Industrial Activities Financial Services Sept. 30, Dec. 31, Sept. 30, Dec. 31, Sept. 30, Dec. 31, 2022 2021 2022 2021 2022 2021 Third party debt (20,922) (20,897) (4,644) (5,335) (16,278) (15,562) Intersegment notes payable - - (1
Slide 28: Reconciliation of Cash & Cash Equivalents to Available Liquidity
RECONCILIATION OF CASH & CASH EQUIVALENTS TO AVAILABLE LIQUIDITY UNDER U.S.-GAAP ($mn) September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Cash and cash equivalents 3,154 2,855 3,219 5,044 Restricted cash 660 729 842 801 Undrawn committed facilities 4,700 5,002 5,087 5,177 Receivables
Slide 29: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIV ITIES TO FREE CASH FLOW OF INDUSTRIAL ACTIVITIES UNDER U.S. GAAP ($mn) Q3 2022 Q3 2021 9M 2022 9M 2021 Net cash provided by (used in) Operating Activities (Continuing Operations) 272 673 (886) 1,474 Cash flows from Operating Activities
Slide 30: Reconciliation of Adj. Net Income and Adj. Income Tax (1/2)
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 (1/2) ($mn) Q3 2022 Q3 2021 9M 2022 9M 2021 Net income (loss) – Continuing Operations 559 460 1,447 1,337 A
Slide 31: Reconciliation of Adj. Net Income and Adj. Income Tax (2/2)
RECONCILIATION OF ADJ. NET INCOME AND ADJ. INCOME TAX (EXPENSE) BENEFIT TO NET INCOME (LOSS) AND INCOME TAX (EXPENSE) BENEFIT AN D CALCULATION OF ADJ. DILUTED EPS AND ADJ. ETR UNDER U.S. -GAAP (2/2) ($mn) Q3 2022 Q3 2021 9M 2022 9M 2021 (a) Adjustments impacting Income (loss) before income tax (expe
Slide 32: Geographic Information
GEOGRAPHIC INFORMATION The composition of our regions part of the geographic information is as follow: ▪ North America: United States, Canada, and Mexico; ▪ Europe, Middle East, and Africa: member countries of the European Union, European Free Trade Association, the United Kingdom, Ukraine, Balkans,
Slide 33: 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 operating results and enhance the readers’ abil
Slide 34: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS investor.relations@cnhind.com Jason Omerza +1 (630) 740 8079 | jason.omerza@cnhind.com Federico Pavesi +39 (345) 605 6218 | federico.pavesi@cnhind.com