Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2014 Earnings Presentation
33 slides from Cnh Industrial's earnings presentation, May 8, 2014
Slide 1: Q1 2014 Results Review
Exhibit 99.4 Q1 2014 Results Review th May 8 , 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this earnings release that are not statements of historical fact constitute forward-looking statements, notwithstanding that such statements are not specifically identified. These statements may include terminology such as “may”, “will”, “expect”
Slide 3: Accounting standards, reporting currency and segment realignment
Accounting standards, reporting currency and segment realignment Beginning with the filing with the U.S. Securities and Exchange Commission (“SEC”) of its annual report on Form 20-F for the fiscal year ended December 31, 2013, prepared in accordance with U.S. GAAP, CNH Industrial reports quarterly a
Slide 4: Q1 '14 Highlights
Q1 ’14 Highlights Consolidated Revenues at $7.5bn in line with last year Net Incomeat $101mn;Net incomebefore restructuringandother exceptionalitems was$177mndown $8mnvs.last year EPSat $0.07; EPSbeforerestructuringand other exceptionalitems at $0.13 Available Liquidity at $8.1bn (inclusive of $2.3b
Slide 5: From operating profit to net income
Q1 ’14 From operating profit to net income ($mn) Q1 2014 Q1 2013 Industrial Activities Operating profit 412 421 (9) Financial Services Operating profit 134 141 (7) Elimination & Other (80) (80) Operating Profit 466 482 (16) Restructuring expenses (12) (9) (3) Interest expenses of Industrial Activiti
Slide 6: Performance by Industrial Activities
Q1 ’14 Performance by Industrial Activities NET SALES ($MN) 7,257 7,213 Net Sales at $3.7bn down 6% (down 3.9% on a constant currency basis) as a result of decreased volumes primarily in LATAM and APAC regions and less favourable product mix 3,944 3,706 -0.6% Operating Profit at $464mn with margin a
Slide 7: Industrial Activities Net Sales & Operating Profit - Growth Composition
Q1 ’14 Industrial Activities Net Sales & Operating Profit * - Growth Composition NET SALES ($MN) 7,257 97 7,354 7,213 974 1,166 1,201 (141) 2,321 2,329 2,308 1.3% -1.9% 754 815 774 3,790 3,706 3,944 Q1 '13 Organic Growth Q1 '14 @ constant currency FX impact Q1 '14 as reported Agricultural Equipment
Slide 8: Cash Flow – Change in Net Industrial Debt
Q1 ’14 Cash Flow – Change in Net Industrial Debt May 8th, 2014 Q1 ‘14 Results Review 8
Slide 9: Net Industrial Debt trend
Q1 ’14 Net Industrial Debt trend NETINDUSTRIAL DEBT TYPICALWORKING CAPITAL DYNAMICS ($MN) Change in Working Capital is a major driver of quarter to quarter changes in Net Industrial Debt within the yearly cadence • Q1: Change in Working • Agricultural Equipment seasonality typically drives cash Capi
Slide 10: Financial Services performance
Q1 ’14 Financial Services performance KEY HIGHLIGHTS NET INCOME ($MN) Retail Originations at $2.3bn down $156mn vs. Q1 ’13 mainly due to 86 +46% reduced Agricultural Equipment volumes 59 ** Managed Portfolio at $27.8bn (of which Retail 65% and Wholesale 35%) up $0.9bn vs. December end (of which Reta
Slide 11: Appendix
Appendix 11
Slide 12: Agricultural Equipment – Operating Profit Variance
Q1 ’14 –Agricultural Equipment Operating Profit Variance OPERATING PROFIT VARIANCE KEY HIGHLIGHTS ($MN) Operating profitwas $464mn for the quarter and operating margin 1 121 468 464 was 0.6 p.p. higher at 12.5%, with net price realization, and improved (9) (5) (25) industrial performance offsetting
Slide 13: Agricultural Equipment – Industry Volumes & Outlook
Q1 ’14 –Agricultural Equipment Industry Volumes & Outlook (% Change y-o-y) Q1 ’14 Industry FY ’14E Industry Q1 ’14 Industry FY ’14E Industry change vs. prior year change vs. prior year change vs. prior year change vs. prior year Worldwide 3% Flat to 5% (8%) (10%) to (15%) NAFTA 4% Flat to 5% (7%) (1
Slide 14: Construction Equipment – Operating Profit Variance
Q1 ’14 –Construction Equipment Operating Profit Variance OPERATING PROFIT VARIANCE KEY HIGHLIGHTS ($MN) Operatingprofitof $3mn comparedto a $26mnloss for Q1 ’13,as a result of favorable volume and mix mainly in heavy equipment, as 2 11 well as continued price discipline and positive contribution fro
Slide 15: Construction Equipment – Industry Volumes & Outlook
Q1 ’14 –Construction Equipment Industry Volumes & Outlook (% Change y-o-y) Q1 ’14 Industry FY ’14E Industry Q1 ’14 Industry FY ’14E Industry change vs. prior year change vs. prior year change vs. prior year change vs. prior year Worldwide 6% Flat to 5% 9% Flat to 5% NAFTA 8% ~5% 10% 5% to 10% EMEA 1
Slide 16: Commercial Vehicles – Operating Profit Variance
Q1 ’14 –Commercial Vehicles Operating Profit Variance OPERATING PROFIT VARIANCE KEY HIGHLIGHTS ($MN) Operatinglossof $70mncomparedwith a lossof $28mnfor Q1 ’13, Volume / Q1 '13 Mix Pricing, net Prod. Cost SG&A R&D Other Q1 '14 as a result of negative market mix related to a significant slowdown of (
Slide 17: Commercial Vehicles – Industry Volumes & Outlook
Q1 ’14 –Commercial Vehicles Industry Volumes & Outlook (% Change y-o-y) Q1 ’14 Industry FY ’14E Industry change vs. prior year change vs. prior year 1 EMEA +8.1% Flat / +5% 2 LATAM (11.6%) (15%) 3 APAC (2.2%) (5%) / Flat Marketsharein EMEAat 11.3%Flatvs.lastyear;LATAMat 11.9%up1.7 p.p.;APACat 2.0%up
Slide 18: Commercial Vehicles – Units Sold & Orders
Q1 ’14 –Commercial Vehicles Units Sold & Orders KEY HIGHLIGHTS Deliveries Orders Total deliveries at 27.8k vehicles, up 2% vs. last year change vs. prior year change vs. prior year • Trucks volumes by segment: 1 • Light up 6.1% on favorable TIV EMEA 9% 9% • Medium down 6.5% as a consequence of pre-b
Slide 19: Powertrain – Units Sold
Q1 ’14 –Powertrain Units Sold (% change y-o-y) KEY HIGHLIGHTS Units Sold change vs. prior year Units sold trend by business line • Engines up 28% to 157k units (25% to Commercial Vehicles, 27% ENGINES +28% to Agricultural Equipment and 4% to Construction Equipment, GEARBOXES while remaining 44% to e
Slide 20: Industrial Activities - Capex breakdown
Q1 ’14 Industrial Activities - Capex breakdown BY CATEGORY TOTAL CAPEX ($MN) New Products & Technology 29% 41% Maintenance & Other Industrial Capacity Expansion & 184 LT Investments -23% 30% 142 BY SEGMENT 9% Agricultural Equipment Q1 2013 Q1 2014 Construction Equipment 50% 35% Commercial Vehicles P
Slide 21: Results highlights (IFRS $ & US GAAP $) – delta with previous year
Q1 ’14 Results highlights (IFRS $ & US GAAP $) – delta with previous year REVENUES Trading Profit Operating Profit MARGIN ($MN) (IFRS) (US GAAP) (IFRS) (US GAAP) (IFRS) (US GAAP) Agricultural Equipment 3,706 (238) 3,706 (238) 442 (4) 464 (4) 11.9% 12.5% Construction Equipment 774 20 774 20 1 29 3 29
Slide 22: Operating Profit US GAAP to Trading Profit IFRS - Reconciliation
Q1 ’14 Operating Profit US GAAP to Trading Profit IFRS - Reconciliation The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading Profit under IFRS: First Quarter ($MN) % of % of 2014 Net Sales 2013 Net Sales US GAAPIndustrial - Operating Profit 412 5.7% 421 5.8% Developme
Slide 23: Net Income US GAAP to Profit under IFRS - Reconciliation
Q1 ’14 Net Income / (Loss) US GAAP to Profit / ( Loss) under IFRS - Reconciliation The following reconciles Net Income / (Loss) in US GAAP to Profit / (Loss) under IFRS: First Quarter ($MN) 2014 EPS 2013 EPS Net Income attributable to CNH Industrial N.V. 100 0.07 111 0.09 Plus: Net Income attributab
Slide 24: Net Income to Net Income and basic EPS before Restructuring and Exceptional Items
Q1 ’14 Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) ($MN) First Quarter 2014 2013 Net Income 101 151 Restructuring expenses, net of tax 12 9 Other exceptional items, net of tax 64 25 Net Income before restructuring and other exceptional items 1
Slide 25: Total Equity – US GAAP to IFRS Reconciliation
Q1 ’14 Total Equity – US GAAP to IFRS Reconciliation ($MN) March 31, 2014 December 31, 2013 Total Equity in accordance with US GAAP 5,081 4,955 (a) Development costs, net 2,925 2,862 (b) Goodwill and other intangible assets (126) (130) (c) Defined benefit plans (41) (29) (d) Restructuring provision
Slide 26: Industry drivers
Industry drivers $800 $536 $522 % change $600 Mar-13 Mar-14 vs. Mar. 13 $400 $310 $324 SOYBEANS $536 $522 -2.6% $200 $309 $222 CORN $309 $222 -28.1% $0 WHEAT $310 $324 4.5% SOYBEANS CORN WHEAT 2011 2012 2013 F Y-o-Y (12/13) 2014 F 2015 F 2016 F Net Farm IncomeUSD - billion IHS Global Insight 118.0 1
Slide 27: Cash Flow – Change in Net Industrial Debt
Q1 ’14 Cash Flow – Change in Net Industrial Debt (US$/mn) Q1 2014 Q1 2013 Net Debt of Industrial Activities at the beginning of period (2,214) (1,961) Net income 101 151 Amortization and depreciation (*) 175 172 Change in provision and similar, and item related to assets sold under buy-back 63 131 c
Slide 28: Industrial Activities Cash Provided (used) by Working Capital
Q1 ’14 Industrial Activities Cash Provided (used) by Working Capital ($MN) Effect of Balance as of Currency Balance as of Cash Provided December 31, Translation and March 31, (Used) by 2013 non-cash 2014 Working Capital Transactions Trade receivables and financing receivables related to sales, net 1
Slide 29: Balance Sheet (March 31, 2014)
Q1 ’14 st Balance Sheet (March 31 , 2014) GROSS DEBT COMPANY LIQUIDITY & MATURITY PROFILE DECEMBER 31, 2013 MARCH31, 2014 Available Debt Maturity Schedule¹ ($bn) Liquidity ($bn) Financial Financial Industrial Industrial $8.1 Services Services 10.1 5.0 Debt Maturities ¹ 11.5 5.2 5.1 2.0 Bank Debt 5.1
Slide 30: Debt Maturity Schedule - Breakdown
Q1 ’14 Debt Maturity Schedule -Breakdown Outstanding ($BN) Next 9 M 2015 2016 2017 2018 Beyond March 31, 2014 7.2 Bank Debt 2.0 1.3 2.2 1.0 0.4 0.4 9.3 Capital Market 0.1 2.5 0.9 2.0 2.3 1.4 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 16.7 Total Debt Maturities ¹ 2.2 3.8 3.2 3.0 2.7 1.9 (5.9) Cash & Mark
Slide 31: Geographic Information
Geographic Information Consistent with the organization structure, certain financial and market information in this presentation has been presented separately by geographic area. CNH Industrial defines its geographic areas as NAFTA: United States, Canada and Mexico LATAM: Central and South America,
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures CNH Industrial monitors its operations through the use of several non-GAAP financial measures. CNH Industrial believes that these non-GAAP financial measures provide useful and relevant information regarding its operating results and enhance the reader’s ability to assess
Slide 33: Investor Relations Team
Contacts Investor Relations Team Federico DonatiHead – of Investor Relations Europe +39 (011) 00- 62756 Noah Weiss Head – of Investor Relations North America +1 (630) 887- 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com th May 8 , 2014 Q1 ‘14 Results Review 33