Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — Q1 2019 Earnings Presentation
40 slides from Cnh Industrial's earnings presentation, May 7, 2019
Slide 1: Q1 2019 Results Review
Q1 2019 Results Review May 7, 2019 Exhibit 99.2
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: Q1 2019 Highlights
Q1 2019 | Highlights Note: All figures are provided herein on a US GAAP $ basis unless otherwise indicated. Non-GAAP measures (definition and reconciliation in appendix) FY 2019E Financial Targets Reaffirmed Note: @CC means at constant currency Industrial Activities Adj. EBIT (1) Up 7% Available Liq
Slide 4: Industry and Company Unit Performances
Q1 2019 | Industry and Company Unit Performances COMPANY ACTUALS (Units) Worldwide deliveries down 2% in Tractors and up 1% in Combines vs. last year Worldwide production down 4% vs. last year Worldwide inventory was up 16% in Tractors and down 5% in Combines Worldwide deliveries down 9% (Compact an
Slide 5: Financial Summary
Q1 2019 | Financial Summary (1) Non-GAAP measures (definition and reconciliation in appendix) Q1 2019 Q1 2018 Δ U.S. GAAP Revenues ($mn) 6,457 6,773 (4.7)% Net Sales | Industrial Activities ($mn) 6,006 6,300 (4.7)% Net Income ($mn) 264 202 30.7% Diluted EPS ($) 0.19 0.14 0.05 Non – GAAP (1) Adjusted
Slide 6: Industrial Activities Net Sales
Q1 2019 | Industrial Activities Net Sales Net Sales split (1) BY SEGMENT AG CE C&SV PT (1) Note: Net Sales: Excluding Other Activities, Unallocated Items and Adjustment & Eliminations BY CURRENCY EUR 48% USD 23% BRL 7% CAD 4% GBP 1% AUD 3% OTHER 14% Note: Numbers may not add due to rounding (*) Note
Slide 7: Adj. EBIT walk
Q1 2019 | Adj. EBIT walk Non-GAAP measures (definition and reconciliation in appendix) 404 49 52 (50) (3) (34) (16) 19 (12) 409 Adj. EBIT VOL & MIX PRICING NET (*) PROD COST SG&A R&D FX | OTHER UNALLOCATED, ELIM & OTHER FS Adj. EBIT Q1 2018 Q1 2019 6.0% 6.3% INDUSTRIAL ACTIVITIES CHANGE IN ADJUSTED
Slide 8: Industrial Activities Adj. EBITDA & Adj. EBIT walk by segment
Q1 2019 | Industrial Activities Adj. EBITDA & Adj. EBIT walk by segment Non-GAAP measures (definition and reconciliation in appendix) 547 286 261 (18) 13 2 1 19 278 247 525 Adj. EBITDA D&A Adj EBIT AG CE C&SV PT ELIM & OTHER (*) Adj EBIT D&A Adj EBITDA Gross Margin 16.6% 21.2% 14.1% 11.5% 15.0% 17.3
Slide 9: AG | Financial Results
AG | Financial Results Adj. EBITDA & Adj. EBIT walk NA EU SA RoW TRACTORS COMBINES OTHERS Q1 ’19 Change vs. prior year 265 79 186 (4) 48 (39) (1) (20) (2) 168 75 243 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 2018 Q1 2019 Net Sa
Slide 10: CE | Financial Results
CE | Financial Results Adj. EBITDA & Adj. EBIT walk NA EU SA RoW C&S (*) General CE (*) R&S (*) 2.3% 0.0% 2.0% 4.2% 16 16 - (6) 18 1 (1) (3) 4 13 14 27 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX PRICING NET PROD COST SG&A R&D FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2018 Q1 2019 Q1 ’19 Change vs. prior y
Slide 11: C&SV | Financial Results
C&SV | Financial Results Adj. EBITDA & Adj. EBIT walk ($mn) NA EU SA RoW n.m. TRUCKS BUSES SPECIALTY VEHICLES 8.3% 2.0% 2.1% 7.3% 206 157 49 54 (14) (16) 3 (8) (17) 51 126 177 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 2018 Q1 2
Slide 12: PT | Financial Results
PT | Financial Results Adj. EBITDA & Adj. EBIT walk NA EU SA RoW ENGINES TRANSM. AXLES 129 34 95 5 4 (4) (3) (1) 96 32 128 Adj. EBITDA D&A Adj. EBIT VOLUME & MIX | PRICING NET PROD COST SG&A R&D FX | OTHER Adj. EBIT D&A Adj. EBITDA Q1 2018 Q1 2019 Q1 ’19 Change vs. prior year Q1 ’19 Change vs. prior
Slide 13: Financial Services
Financial Services (*) Including unconsolidated JVs Managed Portfolio (*) & Retail Originations (*) Q1 ’19 retail originations at $2.2bn, flat compared to March 31, 2018 Managed portfolio* at $26.1bn, down $0.4bn compared to March 31, 2018 (up $1.2bn on a constant currency basis) $26.5bn $26.1bn Mar
Slide 14: Net Industrial Cash Flow and Available Liquidity
Q1 2019 | Net Industrial Cash Flow and Available Liquidity Available Liquidity Cash and Available Committed Lines 5.5 10.0 Change in Working Capital Cash inflow Cash outflow TRADE RECEIVABLES INVENTORIES TRADE PAYABLES OTHER CHG IN WORKING CAPITAL (1.1) Q1 2019 Q1 2018 Non-GAAP measures (reconciliat
Slide 15: Investment in Future Growth
Q1 2019 | Investment in Future Growth Total spending in new products was $149mn, up 23% vs. last year Digitalization; Electrification; Autonomous & Telematics Regulatory Other New Products and Upgrades (1) Excluding assets sold under buy-back commitments and assets under operating leases Capex at $7
Slide 16: FY 2019E US GAAP Financial Targets and Market Outlook
FY 2019E US GAAP Financial Targets and Market Outlook
Slide 17: FY 2019E Industry Outlook
FY 2019E | Industry Outlook (*) NOTE: Total Industry Volume FY 2019E vs. FY 2018 reflecting aggregate for key markets where Company competes (*) New Regional split definition in Appendix TRACTORS COMBINES NA EU SA RoW WW 0-140 HP Flat Flat – 5% Flat – 5% (5%) - Flat Flat 140+ HP Flat – 5% Flat – 5%
Slide 18: FY 2019E US GAAP Financial Targets
FY 2019E | US GAAP Financial Targets (1) 2019 guidance does not include any impacts deriving from the gain resulting from the modification of the healthcare plan in the U.S. previously mentioned, as this gain has been considered non-recurring and therefore treated as an adjusting item for the purpos
Slide 19: Closing Remarks
Closing Remarks
Slide 20: New Initiatives and Awards
Q1 2019 | New Initiatives and Awards AG | ConectarAGRO CNH Industrial signs partnership agreement to bring state-of-the-art connectivity to Brazilian agriculture. The company has participated in the creation of ConectarAGRO, a consortium of eight partners from the agribusiness and telecommunications
Slide 21: New Product Highlights and Concepts
Q1 2019 | New Product Highlights and Concepts IVECO: New Daily MY19 The commercial vehicle that will ‘Change your business perspective. The New Daily sets new standards in on-board living and driving experience and makes important strides towards autonomous driving and enhanced safety features New E
Slide 22: Major initiatives
Q1 2019 | Major initiatives FOOTPRINT OPTIMIZATION Footprint optimization analysis in progress with early findings expected to be unveiled in connection with our strategic plan presentation at our upcoming Capital Markets Day NEW ORGANIZATION Ongoing roll-out of the new organization roles with the a
Slide 23: FY 2019 Corporate Calendar
FY 2019 | Corporate Calendar June July August September October November December Capital Markets Day: September 3rd, 2019 Capital Markets Day Quarterly Results & Analysts’ call conference August 1, 2019 November 6, 2019 September 3, 2019 New York Stock Exchange, NY City Q2 2019 Q3 2019
Slide 24: Appendix
Appendix
Slide 25: Industrial Activities Q1 2019 Net Sales Split
Industrial Activities | Q1 2019 Net Sales Split Agriculture Q1 2019 | Split Chg. vs. Q1 ’18 Construction Q1 2019 | Split Chg. vs. Q1 ‘18 By region: By region: NA 35% 11% NA 47% (6%) EU 37% (2%) EU 21% (3%) SA 14% (3%) SA 11% (8%) RoW 14% (29%) RoW 21% (9%) By product: By product: TRACTORS 58% (5.7%)
Slide 26: Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (Q1 2019)
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” This item includes the pre-tax gain of $30 million as a result of the amortization over approximately 4.5 years of the $527
Slide 27: Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (Q1 2018)
Reconciliation of Net Income (Loss) to Adj. EBIT and EBITDA by Segment (US GAAP) (1) For Industrial Activities, net income / (loss) net of “ Results from intersegment investments” ($mn) Q1 2018 AG CE CV PT Unallocated Items, Elim. & Other Industrial Activities Financial Services Total Net Income (Lo
Slide 28: Reconciliation of Adj. net income and Adj. income tax to Net Income
Q1 2019 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 2019 Q1 2018 Net income (loss) 264 202 Adjustments impacting Income (loss) before income tax (expense) and equity i
Slide 29: Adjustments impacting income before tax and income tax
Q1 2019 Q1 2019 Q1 2018 (a) Adjustments impacting Income (loss) before income tax (expense) and equity in income of unconsolidated subsidiaries and affiliates Restructuring expenses 8 3 Pre-Tax gain related to the modification of certain healthcare benefits in the U.S. (30) - Total (22) 3 (b) Adjust
Slide 30: Capex
Capex (1) (1) Excluding assets sold under buy-back commitments and assets under operating leases Q1 2019 Q1 2018 Investments in property, plant and equipment, and intangible assets (1) 77 61 Breakdown by Category NEW PRODUCT & TECHNOLOGY 42% 34% MAINTENANCE & OTHER 54% 59% INDUSTRIAL CAPACITY EXPANS
Slide 31: Reconciliation to Operating Cash Flow
Reconciliation to Operating Cash Flow (US GAAP) (*) Not included in Net Industrial Debt definition Q1 2019 Q1 2018 Net Cash provided by (used in) Operating Activities (814) (554) Change in Derivatives hedging debt (*) 3 (4) Expenditures on Buyback and Op Lease Assets (100) (196) Operating Cash Flow
Slide 32: Liquidity & Debt Maturity
Liquidity & Debt Maturity 1 Represents cash portion of debt maturities as of 03/31/2019 2 Of which $0.8bn Restricted Cash Undrawn M/T unsecured Committed Lines Bank Debt Capital Market Cash Other Available Liquidity ($bn) 10.0 (2.3) (2.6) (1.9) (1.4) (1.4) (3.4) As of 03/31/19 2019 2020 2021 2022 20
Slide 33: Reconciliation of Total Debt to Net Debt
Reconciliation of Total Debt to Net Debt (US GAAP) Mar 31, 2019 Dec 31, 2018 Mar 31, 2019 Dec 31, 2018 Mar 31, 2019 Dec 31, 2018 Third party debt (23,807) (24,445) (5,242) (5,211) (18,565) (19,234) Intersegment notes payable - - (1,210) (1,136) (1,662) (1,202) Total (Debt) (1) (23,807) (24,445) (6,4
Slide 34: From Total Debt to Net Industrial Debt
From Total Debt to Net Industrial Debt Mar 31, 2019 Dec 31, 2018 Total (Debt) (1) (23,807) (24,445) Financial Services Third Party Debt 18,565 19,234 Intersegment Note Payables (1,210) (1,136) Intersegment Note Receivables 1,662 1,202 Cash and cash equivalents 3,226 4,553 Restricted cash 49 - Deriva
Slide 35: Debt Maturity Schedule | Breakdown
Debt Maturity Schedule | Breakdown Outstanding Mar 31, 2019 2019 2020 2021 2022 2023 2024 Beyond (4.1) Bank Debt (1.2) (1.9) (0.4) (0.2) (0.2) (0.1) (0.1) (8.7) Capital Market (1.0) (0.7) (1.5) (1.2) (1.2) (0.5) (2.6) (0.2) Other Debt (0.1) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (13.0) Cash Portion of
Slide 36: Total Equity – US GAAP to EU-IFRS Reconciliation
Total Equity – US GAAP to EU-IFRS | Reconciliation Note: 2017 figures have been recast following the retrospective adoption, on January 1, 2018, of the updated accounting standards for revenue recognition (ASC 606) and retirement benefits accounting (ASU 2017-07). Mar 31, 2019 Dec 31, 2018 Total Equ
Slide 37: Europe Trucks | Company performance
Europe Trucks | Company performance (*) 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 2016 2017 2018 2019 MKT SHAR
Slide 38: New Geographic Information
New Geographic Information Starting from Q1 2019 the composition of our regions part of the geographic information have been amended as follow: North America (formerly NAFTA): United States, Canada and Mexico; Europe (member countries of the European Union, European Free Trade Association, Ukraine,
Slide 39: 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 40: 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 Giovanni Somajni – Investor Relations Eur