Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2018 Earnings Presentation
37 slides from Cnh Industrial's earnings presentation, Apr 27, 2018
Slide 1: Q1 2018 Results Review
Q1 2018 Results Review April 27, 2018 Exhibit 99.3
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 statements regarding our competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, inco
Slide 3: About this presentation and looking forward
About this presentation and looking forward On January 1, 2018, the Company adopted, on a retrospective basis, updated FASB accounting standards for revenue recognition (ASC 606), retirement benefits accounting (ASU 2017-07) and cash flow presentation (ASU 2016-18). 2017 figures presented in this pr
Slide 4: Q1 2018 Highlights
Q1 2018 | Highlights Net Income at $202mn Adjusted Net Income (1) at $204mn, up $149mn vs. last year Industrial Activities Adj. EBITDA (1) at $547mn up $156mn from last year, with margin at 8.7% Adj. EBIT (1) at $261mn up $120mn from last year, with margin at 4.1% Net Industrial (debt) (1) at $(1.9)
Slide 5: Main Product Launches & Awards
Q1 2018 | Main Product Launches & Awards 2018 AE50 AWARDS: ASABE HONOURED FOUR OF THE COMPANY’S LATEST INNOVATIONS WCM: SOROCABA (BRAZIL) SILVER MEDAL – ULM (GERMANY) BRONZE MEDAL FPT INDUSTRIAL: DIESEL POWERBOAT GUINNESS WORLD SPEED RECORD
Slide 6: Q1 2018 Financial Summary
Q1 2018 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Q1 2018 Q1 2017 Δ U.S. GAAP Revenues ($mn) 6,773 5,785 17% Net Sales | Industrial Activities ($mn) 6,300 5,290 19% Net Income ($mn) 202 46 156 Diluted EPS ($) 0.14 0.03 0.11 Non – GAAP (1) Adjusted EBIT | I
Slide 7: Industrial Activities Net Sales
Q1 2018 | Industrial Activities Net Sales Net Sales split (1) BY REGION BY SEGMENT NAFTA EMEA LATAM APAC AG CE CV PT (1) Note: Net Sales: Excluding Other Activities, Unallocated Items & Adjustment & Eliminations BY CURRENCY EUR 47% USD 25% BRL 5% CAD 4% GBP 2% AUD 3% OTHER 13% Note: Numbers may not
Slide 8: Industrial Activities Adj. EBITDA & Adj. EBIT walk
Q1 2018 | Industrial Activities Adj. EBITDA & Adj. EBIT walk Non-GAAP measures (definition and reconciliation in appendix) 391 250 141 71 31 32 21 (35) 261 286 547 Adj. EBITDA D&A Adj EBIT AG CE CV PT ELIM & OTHER (*) Adj EBIT D&A Adj EBITDA Q1 2017 Q1 2018 CHANGE IN ADJUSTED EBIT 120 85% 7.4% 2.7%
Slide 9: Adjusted Net Income walk
Q1 2018 | Adjusted Net Income walk ($mn) 55 120 17 12 10 (10) 204 Q1 2017 IA | ADJ. EBIT FS | ADJ. EBIT OTHER ITEMS (2) INTEREST EXP, NET TAXES Q1 2018 CHANGE IN ADJUSTED NET INCOME (1) 149 3.7x (1) Reconciliation of Adj. net income and Adj. income taxes to the most comparable GAAP financial measure
Slide 10: Cash Flow: Change in Net Industrial Debt
Cash Flow | Change in Net Industrial Debt ($mn) (908) 547 (162) (1,005) (134) (61) (10) (91) (99) (1,923) Dec 31, 2017 IA | ADJ EBITDA CASH INTEREST AND TAXES CHANGE IN WORKING CAPITAL CHANGE IN PROVISIONS & OTHERS (1) PP&E CAPEX (2) OTHER CHANGES DIVIDENDS & EQUITY CHANGES (3) FX & OTHER Mar 31, 20
Slide 11: Financial Services
Financial Services (*) Including unconsolidated JVs Managed Portfolio (*) & Retail Originations (*) $24.7bn Q1 ’18 retail originations at $2.2bn, up $0.3bn compared to March 31, 2017 Managed portfolio at $26.5bn, up $1.8bn compared to March 31, 2017 (up $0.5bn on a constant currency basis) $26.5bn M
Slide 12: Industrial Activities Overview
Industrial Activities Overview
Slide 13: Q1 2018 Industry Units
Q1 2018 | Industry Units TRACTORS COMBINES LIGHT HEAVY TRUCKS >3.5T NAFTA Flat (2%) 9% 19% - 1% EMEA (3%) 19% 4% 10% 9% LATAM (16%) (16%) 24% 38% 29% APAC 17% (2%) 17% 30% 10% AG CE 0-140 HP 140+ HP (1) Reflects aggregate for key markets where Company competes CV (1)
Slide 14: AG Financial Results
AG | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC TRACTORS COMBINES OTHERS 2,240 2,579 Change vs. prior year Change vs. prior year 8.7% 5.1% 7.2% 10.3% Favorable volume, better mix, and higher production level 2.5% net price realization (including negative FX exchange t
Slide 15: CE Financial Results
CE | Financial Results Adj. EBITDA & Adj. EBIT walk Net Sales ($mn) NAFTA EMEA LATAM APAC LIGHT HEAVY OTHERS n.m. 502 682 Change vs. prior year Change vs. prior year (3.0)% (6.2)% 0.0% 2.3% Higher volumes on improved end-user demand and 30% increase in production Favorable pricing conditions FX exch
Slide 16: CV Financial Results
CV | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC n.m. TRUCKS BUSES OTHERS (1) 2,125 2,495 Change vs. prior year Change vs. prior year 6.7% 0.8% 2.0% 8.3% Favorable end-user demand in light commercial vehicles, improved pricing and manufacturing efficiencies R&D spendin
Slide 17: PT Financial Results
PT | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NAFTA EMEA LATAM APAC ENGINES TRANSM. AXLES 104 30 74 13 7 0 (5) 6 95 34 129 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX | PRICING NET PROD COST SG&A R&D JV | FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2017 Q1 2018 Change vs. prior year Change vs. pr
Slide 18: FY 2018E US GAAP Financial Targets
FY 2018E US GAAP Financial Targets
Slide 19: FY 2018E Industry Units
FY 2018E | Industry Units TRACTORS COMBINES LIGHT HEAVY TRUCKS >3.5T NAFTA Flat - 5% ~ 10% ~ 5% ~ 5% - ~ 5% EMEA (5%) – Flat 5% - 10% ~ 5% 5% - 10% Flat - 5% LATAM Flat – 5% ~ 5% Flat - 5% Flat - 5% 15% - 20% APAC ~ 5% ~ 10% 5% - 10% 5% - 10% ~ 5% AG CE 0-140 HP 140+ HP (1) Reflects aggregate for ke
Slide 20: FY 2018E US GAAP Financial Targets
FY 2018E | US GAAP Financial Targets (1) 2018 guidance reflects current EUR/USD exchange rate of 1.23. Furthermore, 2018 guidance does not include any impacts deriving from the pre-tax gain that the Company will book as a result of the Benefits modification previously mentioned and anticipated on Ap
Slide 21: Appendix
Appendix
Slide 22: Industrial Activities Net Sales split
Industrial Activities | Net Sales split Agricultural Equipment Q1 2018 | Split Chg. Vs. Q1 ‘17 Construction Equipment Q1 2018 | Split Chg. Vs. Q1 ‘17 By region: By region: NAFTA 30% 7% NAFTA 47% 21% EMEA 39% 25% EMEA 22% 57% LATAM 14% (3%) LATAM 11% 41% APAC 17% 27% APAC 20% 57% By product: By produ
Slide 23: Reconciliation of Net Income to Adjusted EBITDA by Segment Q1 2018
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” Q1 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (1) - -
Slide 24: Reconciliation of Net Income to Adjusted EBITDA by Segment Q1 2017
Reconciliation of Net Income (Loss) to Adjusted EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) Q1 2017 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Loss) (
Slide 25: Reconciliation of Adj. net income and Adj. income tax
Q1 2018 Reconciliation of Adj. net income and Adj. income tax (expense) to Net Income (loss) and Income tax (expense) and calculation of Adj. diluted EPS and Adj. ETR under U.S.GAAP Q1 2018 Q1 2017 Net income (loss) 202 46 Adjustments impacting Income (loss) before income tax (expense) and equity in
Slide 26: Adjustments to income before tax and income tax
Q1 2018 Q1 2018 Q1 2017 (a) Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates Restructuring expenses 3 12 Total 3 12 (b) Adjustments impacting Income tax (expense) Tax effect of adjustments impacting Income (loss) befor
Slide 27: Capex
Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q1 2018 Q1 2017 Investments in property, plant and equipment, and intangible assets (1) (61) (74) Breakdown by Category NEW PRODUCT & TECHNOLOGY 34% 35% MAINTENANCE & OTHER 59% 55% INDUSTRIAL CAPACITY EX
Slide 28: Reconciliation to Operating Cash Flow
Reconciliation to Operating Cash Flow (US GAAP) (*) Not included in Net Industrial Debt definition Mar 31, 2018 Mar 31, 2017 Net Cash provided by (used in) Operating Activities (554) (259) Change in Derivatives hedging debt (*) (4) (5) Expenditures on Buyback and Op Lease Assets (196) (229) Operatin
Slide 29: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 03/31/2018 2 Of which $0.8bn Restricted Cash Undrawn M/T Committed Lines Bank Debt Capital Market Cash Other Available Liquidity ($bn) Debt Maturity Schedule (1) ($bn) Available liquidity at March 31, 2018 was $7.6bn, compa
Slide 30: Reconciliation of Total Debt to Net Debt
Reconciliation of Total Debt to Net Debt (US GAAP) Mar 31, 2018 Dec 31, 2017 Mar 31, 2018 Dec 31, 2017 Mar 31, 2018 Dec 31, 2017 Third party debt (24,650) (25,895) (5,537) (6,461) (19,113) (19,434) Intersegment notes payable - - (812) (982) (1,317) (1,641) Total (Debt) (1) (24,650) (25,895) (6,349)
Slide 31: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt Mar 31, 2018 Dec 31, 2017 Total (Debt) (1) (24,650) (25,895) Financial Services Third Party Debt 19,113 19,434 Intersegment Note Payables (812) (982) Intersegment Note Receivables 1,317 1,641 Cash and cash equivalents 3,119 4,901 Restricted cash 1 - Derivatives
Slide 32: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding Mar 31, 2018 9M 2018 2019 2020 2021 2022 Beyond (4.4) Bank Debt (1.2) (1.1) (1.5) (0.3) (0.2) (0.2) (8.6) Capital Market (0.9) (1.3) (0.6) (1.8) (1.2) (2.7) (0.2) Other Debt (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (13.2) Cash Portion of (Debt) Maturities (2
Slide 33: Total Equity – US GAAP to EU-IFRS Reconciliation
Total Equity – US GAAP to EU-IFRS | Reconciliation Mar 31 2018 Dec 31 2017 Total Equity in accordance with US GAAP 4,094 4,232 Development costs 2,498 2,477 Other adjustments (39) (112) Tax impact on adjustments (627) (645) Deferred tax assets and tax contingencies recognition 738 732 Total adjustme
Slide 34: CV Industry performance | Europe Trucks
CV | Industry performance | Europe Trucks (*) Europe: 27 countries reflecting key markets where the segment competes (excluding United Kingdom and Ireland for market share reporting purposes); (1) Company’s estimated market share in the European truck market (GVW ≥3.5 tons) Q1 2015 2016 2017 2018 MK
Slide 35: 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; EMEA: member countries of the European Union, European Free Trade Association, Ukraine,
Slide 36: 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 37: Investor Relations Team
Investor Relations Team e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com 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