UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of January 2015
Commission File No. 001-36085
CNH
INDUSTRIAL N.V.
(Translation of Registrant’s Name Into English)
Cranes Farm Road
Basildon
Essex SS14 3AD
United Kingdom
Tel. No.: +44 1268 533000
(Address of Principal Executive Offices)
(Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by
furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ¨ No x
If “Yes” is
marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A.
CNH INDUSTRIAL N.V.
Form 6-K for the month of January 2015
The following exhibits
are furnished herewith:
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| Exhibit 99.1 |
|
Press release, dated January 29, 2015 titled: “CNH Industrial closed 2014 with revenues of $32.6 billion, net income of $708 million and net income before restructuring and other exceptional items of $940
million.” |
|
|
| Exhibit 99.2 |
|
CNH Industrial N.V. Fourth Quarter and Full Year 2014 Results Review Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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| CNH Industrial N.V. |
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| By: |
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/s/ Michael P. Going |
| Name: |
|
Michael P. Going |
| Title: |
|
Corporate Secretary |
January 29, 2015
Index of Exhibits
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| Exhibit
Number |
|
Description of Exhibit |
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| Exhibit 99.1 |
|
Press release, dated January 29, 2015 titled: “CNH Industrial closed 2014 with revenues of $32.6 billion, net income of $708 million and net income before restructuring and other exceptional items of $940
million.” |
|
|
| Exhibit 99.2 |
|
CNH Industrial N.V. Fourth Quarter and Full Year 2014 Results Review Presentation |
Exhibit 99.1
2014 FOURTH QUARTER AND FULL YEAR RESULTS
“CNH Industrial closed 2014 with revenues of $32.6 billion, net income of $708 million and net income before restructuring and other
exceptional items of $940 million.”
Financial results under U.S. GAAP(*) (**)
| |
• |
|
Revenues totaled $8.4 billion for the fourth quarter and $32.6 billion for the full year 2014 ($9.3 billion and $33.8 billion for the same periods in 2013). Net sales of Industrial Activities were $8.0 billion
for the quarter and $31.2 billion for the year ($9.0 billion and $32.7 billion for the same periods in 2013), down 5.9% and 2.8%, respectively, on a constant currency basis. |
| |
• |
|
Operating profit of Industrial Activities was $376 million for the quarter ($389 million in Q4 2013), with an operating margin at 4.7% (up 0.4 p.p.). For the full year operating profit of Industrial Activities
was $1,988 million ($2,095 million in 2013). Operating margin stood at 6.4%, flat year over year. |
| |
• |
|
Net income was $87 million (or $0.06 per share) for the quarter and $708 million (or $0.52 per share) for the full year. Net income before restructuring and other exceptional items was $167 million (or $0.12
per share) for the quarter and $940 million (or $0.69 per share) for the full year, up $50 million compared to Q4 2013 and down $7 million for the full year. |
| |
• |
|
Net industrial debt was $2.7 billion at December 31, 2014 ($3.9 billion at September 30, 2014 and $2.2 billion at December 31, 2013). Available liquidity totaled $8.9 billion ($8.7 billion at
December 31, 2013). |
| |
• |
|
The Board of Directors is recommending for 2014 a dividend of €0.20 per common share, totaling approximately $307 million (€271 million). |
| |
• |
|
For 2015 CNH Industrial expects net sales of Industrial Activities at approximately $28 billion, with operating margin of Industrial Activities between 6.1% and 6.4%. Net industrial debt expected between $2.2
billion and $2.4 billion. |
| |
(*) |
Beginning with the filing with the U.S. Securities and Exchange Commission (“SEC”) of its annual report on Form 20-F for the fiscal year ended December 31, 2013, prepared in accordance with U.S. GAAP,
CNH Industrial reports quarterly and annual financial results both under U.S. GAAP for SEC reporting purposes and under IFRS for European listing purposes and Dutch law requirements. Financial statements under both sets of accounting principles use
the U.S. dollar as the reporting currency. In addition, as disclosed in the Form 20-F, CNH Industrial has expanded its reportable segments from three (Agricultural and Construction Equipment inclusive of its financial services activities, Trucks and
Commercial Vehicles inclusive of its financial services activities, and Powertrain) to five (Agricultural Equipment, Construction Equipment, Commercial Vehicles, Powertrain and Financial Services). The following tables and comments on the financial
results of the Company and by segments are prepared in accordance with U.S. GAAP. Financial results under IFRS are shown in specific tables at the end of this press release. Prior period results under IFRS, prepared in Euro, have been consistently
recast into U.S. dollars. A summary outlining the Company’s transition to U.S. GAAP and the U.S. dollar as the reporting currency is available on the Company’s website, www.cnhindustrial.com. |
| |
(**) |
Refer to the Non-GAAP Financial Information section of this press release for information regarding Non-GAAP financial measures. |
CNH INDUSTRIAL
Summary Income
Statement ($ million)
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| Full Year |
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|
|
|
4th Quarter |
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| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
32,555 |
|
|
|
33,836 |
|
|
|
-3.8 |
% |
|
Revenues |
|
|
8,365 |
|
|
|
9,290 |
|
|
|
-10.0 |
% |
| |
708 |
|
|
|
828 |
|
|
|
-120 |
|
|
Net income |
|
|
87 |
|
|
|
54 |
|
|
|
33 |
|
| |
940 |
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|
|
947 |
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|
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-7 |
|
|
Net income before restructuring and other exceptional items |
|
|
167 |
|
|
|
117 |
|
|
|
50 |
|
| |
710 |
|
|
|
677 |
|
|
|
33 |
|
|
Net income attributable to CNH Industrial N.V. |
|
|
83 |
|
|
|
60 |
|
|
|
23 |
|
| |
0.52 |
|
|
|
0.54 |
|
|
|
-0.02 |
|
|
Basic EPS ($) |
|
|
0.06 |
|
|
|
0.04 |
|
|
|
0.02 |
|
| |
0.52 |
|
|
|
0.54 |
|
|
|
-0.02 |
|
|
Diluted EPS ($) |
|
|
0.06 |
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|
|
0.04 |
|
|
|
0.02 |
|
| |
0.69 |
|
|
|
0.63 |
|
|
|
0.06 |
|
|
Basic EPS before restructuring and other exceptional items ($) |
|
|
0.12 |
|
|
|
0.08 |
|
|
|
0.04 |
|
CNH Industrial N.V.
Corporate Office:
Cranes Farm Road
Basildon, Essex, SS14 3AD
United Kingdom
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|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL
Income Statement Data of Industrial Activities(1) ($ million)
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| Full Year |
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|
|
4th Quarter |
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| 2014 |
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|
2013 |
|
|
Change |
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|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
31,198 |
|
|
|
32,661 |
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|
|
-4.5 |
% |
|
Net sales of Industrial Activities |
|
|
8,018 |
|
|
|
8,996 |
|
|
|
-10.9 |
% |
| |
1,988 |
|
|
|
2,095 |
|
|
|
-107 |
|
|
Operating profit of Industrial Activities (2) |
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|
376 |
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|
389 |
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-13 |
|
| |
6.4 |
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6.4 |
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|
|
0.0 p.p. |
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|
Operating margin of Industrial Activities (%) |
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4.7 |
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4.3 |
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0.4 p.p. |
|
| (1) |
Industrial Activities represent the activities carried out by the four industrial segments Agricultural Equipment, Construction Equipment, Commercial Vehicles, and Powertrain, as well as Corporate functions.
|
| (2) |
Operating profit of Industrial Activities is a non-GAAP measure and is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses.
|
London (UK) – (January 29, 2015) CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $32,555
million for 2014, down 3.8% compared to 2013 (down 2.1% on a constant currency basis). Net sales of Industrial Activities were $31,198 million in 2014, down 4.5% from 2013 (down 2.8% on a constant currency basis). Net sales increases in
Construction Equipment and Powertrain were offset by a decline in Agricultural Equipment, mainly due to unfavorable volume and product mix, particularly in LATAM and NAFTA, and in Commercial Vehicles in LATAM, as well as by the negative impact of
currency translation, primarily relating to the Brazilian real.
CNH INDUSTRIAL
Revenues by Segment ($ million)
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|
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|
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|
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| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
% change |
|
|
|
|
2014 |
|
|
2013 |
|
|
% change |
|
| |
15,204 |
|
|
|
16,763 |
|
|
|
-9.3 |
|
|
Agricultural Equipment |
|
|
3,403 |
|
|
|
4,142 |
|
|
|
-17.8 |
|
| |
3,346 |
|
|
|
3,258 |
|
|
|
2.7 |
|
|
Construction Equipment |
|
|
800 |
|
|
|
832 |
|
|
|
-3.8 |
|
| |
10,888 |
|
|
|
11,278 |
|
|
|
-3.5 |
|
|
Commercial Vehicles |
|
|
3,354 |
|
|
|
3,551 |
|
|
|
-5.5 |
|
| |
4,464 |
|
|
|
4,412 |
|
|
|
1.2 |
|
|
Powertrain |
|
|
988 |
|
|
|
1,331 |
|
|
|
-25.8 |
|
| |
(2,704) |
|
|
|
(3,050 |
) |
|
|
— |
|
|
Eliminations and other |
|
|
(527 |
) |
|
|
(860 |
) |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
31,198 |
|
|
|
32,661 |
|
|
|
-4.5 |
|
|
Total Industrial Activities |
|
|
8,018 |
|
|
|
8,996 |
|
|
|
-10.9 |
|
| |
1,828 |
|
|
|
1,679 |
|
|
|
8.9 |
|
|
Financial Services |
|
|
465 |
|
|
|
432 |
|
|
|
7.6 |
|
| |
(471) |
|
|
|
(504 |
) |
|
|
— |
|
|
Eliminations and other |
|
|
(118 |
) |
|
|
(138 |
) |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
32,555 |
|
|
|
33,836 |
|
|
|
-3.8 |
|
|
Total |
|
|
8,365 |
|
|
|
9,290 |
|
|
|
-10.0 |
|
Operating profit of Industrial Activities was $1,988 million in 2014, a 5.1% decrease compared to 2013 (down 3.6% on a
constant currency basis), with an operating margin for the year at 6.4%, in line with 2013. Operating profit improved in Construction Equipment and Powertrain and declined in Agricultural Equipment and Commercial Vehicles. Construction Equipment
benefitted from favorable volume and mix in all regions, positive price realization, and cost efficiencies. For Powertrain, the improvement was due to the increased activity with third parties, and continued industrial cost efficiencies. For
Commercial Vehicles, positive performance in EMEA and APAC and significant reductions in selling, general and administrative (“SG&A”) expenses were offset by the negative effects of challenging trading conditions in LATAM, due to a
significant decline in market demand. In Agricultural Equipment, lower volume and negative product mix were partially offset by positive net price realization, industrial efficiencies and structural cost reductions in SG&A and research and
development (“R&D”) expenses. Foreign exchange translation impacts were not material to the operating profit of Industrial Activities.
2
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|
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|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL
Operating profit/(loss) by Segment (1) ($ million)
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
1,770 |
|
|
|
2,008 |
|
|
|
-238 |
|
|
Agricultural Equipment |
|
|
241 |
|
|
|
312 |
|
|
|
-71 |
|
| |
79 |
|
|
|
(97 |
) |
|
|
176 |
|
|
Construction Equipment |
|
|
9 |
|
|
|
(53 |
) |
|
|
62 |
|
| |
29 |
|
|
|
74 |
|
|
|
-45 |
|
|
Commercial Vehicles |
|
|
100 |
|
|
|
98 |
|
|
|
2 |
|
| |
223 |
|
|
|
187 |
|
|
|
36 |
|
|
Powertrain |
|
|
66 |
|
|
|
69 |
|
|
|
-3 |
|
| |
(113) |
|
|
|
(77 |
) |
|
|
-36 |
|
|
Eliminations and other |
|
|
(40 |
) |
|
|
(37 |
) |
|
|
-3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1,988 |
|
|
|
2,095 |
|
|
|
-107 |
|
|
Total Industrial Activities |
|
|
376 |
|
|
|
389 |
|
|
|
-13 |
|
| |
554 |
|
|
|
514 |
|
|
|
40 |
|
|
Financial Services |
|
|
147 |
|
|
|
115 |
|
|
|
32 |
|
| |
(343) |
|
|
|
(332 |
) |
|
|
-11 |
|
|
Eliminations and other |
|
|
(88 |
) |
|
|
(90 |
) |
|
|
2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2,199 |
|
|
|
2,277 |
|
|
|
-78 |
|
|
Total |
|
|
435 |
|
|
|
414 |
|
|
|
21 |
|
| (1) |
Operating profit of Industrial Activities (a non-GAAP measure) is defined as net sales less cost of goods sold, selling, general and administrative expenses, and research and development expenses. Operating profit of
Financial Services (a non-GAAP measure) is defined as revenues less selling, general and administrative expenses, interest expense and certain other operating expenses. |
CNH INDUSTRIAL
Reconciliation of
Operating Profit to Net Income ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
|
|
2014 |
|
|
2013 |
|
| |
2,199 |
|
|
|
2,277 |
|
|
Total Operating Profit |
|
|
435 |
|
|
|
414 |
|
| |
184 |
|
|
|
71 |
|
|
Restructuring expenses |
|
|
86 |
|
|
|
39 |
|
| |
613 |
|
|
|
548 |
|
|
Interest expenses of Industrial Activities, net of interest income and eliminations |
|
|
164 |
|
|
|
166 |
|
| |
(313) |
|
|
|
(284 |
) |
|
Other, net |
|
|
(59 |
) |
|
|
(62 |
) |
| |
1,089 |
|
|
|
1,374 |
|
|
Income before income taxes and equity in income of unconsolidated subsidiaries and affiliates |
|
|
126 |
|
|
|
147 |
|
| |
467 |
|
|
|
671 |
|
|
Income taxes |
|
|
59 |
|
|
|
130 |
|
| |
86 |
|
|
|
125 |
|
|
Equity in income of unconsolidated subsidiaries and affiliates |
|
|
20 |
|
|
|
37 |
|
| |
708 |
|
|
|
828 |
|
|
Net income |
|
|
87 |
|
|
|
54 |
|
Restructuring expenses totaled $184 million for the year, as part of the Company’s Efficiency Program announced in
July 2014. Agricultural Equipment recorded $43 million primarily due to the closure of a joint venture in China and cost reduction activities as a result of negative demand conditions. Commercial Vehicles recorded $102 million mainly due to actions
to reduce SG&A expenses and business support costs as a result of the transition to CNH Industrial’s regional structure, and costs related to the completion of manufacturing product specialization programs. Construction Equipment recorded
$39 million mainly due to the realignment of the dealer networks in EMEA as a result of the re-positioning of the Case and New Holland brand offerings , and the announced closure of the Company’s Calhoun, Georgia, USA facility. For 2013,
restructuring expenses were $71 million, mainly related to Commercial Vehicles primarily related to manufacturing product specialization programs.
Interest expense, net totaled $613 million in 2014, $65 million higher than 2013, primarily due to an increase in average net industrial debt during
the year, partially offset by more favorable interest rates primarily related to the new notes issued during the year.
3
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Other, net was a charge of $313 million for 2014 (charge of $284 million for 2013). The increase of
$29 million was mainly due to higher foreign exchange losses, which included a $71 million pre-tax charge for the re-measurement of Venezuelan assets denominated in Bolivars.
Income taxes totaled $467 million for 2014, representing an effective tax rate of 42.9% (2013 effective tax rate of 48.8%), in line with the
Company’s expectations for the year, and well above the expected long term target.
Equity in income of unconsolidated subsidiaries and
affiliates totaled $86 million for the year ($125 million for 2013); the decrease was mainly due to lower results from APAC joint ventures as a result of more difficult trading conditions.
Net income of Financial Services was $364 million for 2014, compared to $342 million for 2013, as a result of a larger comparable portfolio and
one-time items in the previous year.
Consolidated net income was $708 million for 2014 ($828 million for 2013). Net income attributable to CNH
Industrial N.V. was $710 million ($677 million for 2013), or $0.52 per share ($0.54 per share for 2013). Net income before restructuring and other exceptional items (a non-GAAP measure) was $940 million for 2014 ($947 million for
2013), or $0.69 per share ($0.63 per share for 2013).
Net industrial debt of $2.7 billion at December 31, 2014 was $0.5 billion higher than
at December 31, 2013. Cash generation in the operations before changes in working capital contributed for $1.3 billion. Changes in working capital negatively impacted by $1.0 billion, mainly due to lower payables as a result of the relevant
production curtailments in Agricultural Equipment in the fourth quarter, and of Commercial Vehicles in EMEA returning to normalized levels of production as compared to prior year’s Euro V pre-buy activity, as well as in LATAM operations.
Capital expenditure activity totaled $1.0 billion and dividend payments were $0.4 billion. Currency translation differences on euro-denominated debt positively affected net industrial debt by $0.6 billion.
Available liquidity at December 31, 2014 was $8.9 billion, inclusive of $2.7 billion in undrawn committed facilities ($2.2 billion at
December 31, 2013), compared to $8.7 billion at December 31, 2013. During the year, a €1.75 billion five-year committed revolving credit facility was signed, replacing an existing three-year €2 billion facility due to mature in
February 2016.
Fourth Quarter
The Company
reported consolidated revenues of $8,365 million for the fourth quarter of 2014, down 10.0% compared to Q4 2013 (down 4.9% on a constant currency basis). Net sales of Industrial Activities were $8,018 million in Q4 2014, down 10.9%
from Q4 2013 (down 5.9% on a constant currency basis), largely as a result of the difficult demand conditions in Agricultural Equipment.
Operating
profit of Industrial Activities totaled $376 million for the fourth quarter ($389 million in the comparable period), with an operating margin of 4.7% (4.3% in Q4 2013). Construction Equipment operating performance improved as a result of lower
SG&A and R&D expenses, and positive volume and mix. Agricultural Equipment operating profit was negatively affected by unfavorable volume and mix, including negative industrial absorption primarily related to production curtailments to
realign inventory to market demand, partially offset by favorable pricing and cost efficiencies. Commercial Vehicles operating performance was stable compared to Q4 2013 as improved EMEA operations were able to offset challenging trading
conditions in LATAM and negative foreign exchange currency impacts. Powertrain operating performance was stable, with industrial efficiencies offsetting reduced volumes with captive customers.
4
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Restructuring expenses totaled $86 million in the quarter, mainly due to actions to reduce SG&A
expenses and business support costs, as well as costs related to the completion of manufacturing product specialization programs for Commercial Vehicles, and to cost reduction activities as a result of negative demand conditions within Agricultural
Equipment. For Q4 2013, restructuring expenses were $39 million, mainly related to Commercial Vehicles.
Interest expense, net totaled $164 million
for the quarter, compared to $166 million for Q4 2013, with more favorable interest rates offset by an increase in average net industrial debt.
Net
income of Financial Services was $98 million for the quarter, compared to $122 million for Q4 2013, as the positive impact of the higher average portfolio and lower provisions for credit losses was more than offset by higher income taxes.
Consolidated net income was $87 million for the quarter ($54 million for Q4 2013). Net income attributable to CNH Industrial N.V. was $83
million for the quarter ($60 million for Q4 2013), or $0.06 per share ($0.04 per share for Q4 2013), Net income before restructuring and other exceptional items (a non-GAAP measure) was $167 million for the quarter ($117 million for Q4
2013).
5
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Agricultural Equipment
AGRICULTURAL EQUIPMENT
Net sales &
Operating profit/(loss) ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
15,204 |
|
|
|
16,763 |
|
|
|
-9.3 |
% |
|
Net sales |
|
|
3,403 |
|
|
|
4,142 |
|
|
|
-17.8 |
% |
| |
1,770 |
|
|
|
2,008 |
|
|
|
-238 |
|
|
Operating profit |
|
|
241 |
|
|
|
312 |
|
|
|
-71 |
|
| |
11.6 |
|
|
|
12.0 |
|
|
|
-0.4 p.p. |
|
|
Operating margin (%) |
|
|
7.1 |
|
|
|
7.5 |
|
|
|
-0.4 p.p. |
|
Net sales for Agricultural Equipment were $15,204 million for 2014, down 9.3% from 2013 (down 7.9% on a constant
currency basis), driven by unfavorable volume and product mix, particularly in LATAM and NAFTA with a significant decrease for high horsepower products. This impact was partially offset by positive pricing. All of the regions reported decreases in
net sales with the largest proportionate decline reported in LATAM. The geographic distribution of net sales for the year was 45% NAFTA, 31% EMEA, 13% LATAM and 11% APAC.
Worldwide agricultural equipment industry unit sales were down compared to 2013, with global demand for tractors down 7% and combines down 18%. NAFTA tractor
demand was up 3%, largely concentrated in the lower horsepower segment (under 140 hp). The over 140 hp segment and combine demand were both down 25% year over year. LATAM tractor and combine markets decreased 15% and 24% respectively. EMEA markets
were down 8% for tractors and 10% for combines, with a significant deceleration in tractor demand in Q4 2014. APAC markets decreased 8% for tractors and 9% for combines.
Agricultural Equipment’s worldwide market share performance was in line with the market for tractors but below the market for combines, mainly due to
transition to Tier 4B engine compliant products in NAFTA and a negative market mix in APAC.
Agricultural Equipment’s worldwide production units was
5% higher than retail sales during 2014 but 19% below retail sales for the fourth quarter, as the Company implemented its planned production slowdown to reduce Company and dealer inventory.
Agricultural Equipment’s operating profit was $1,770 million for the year ($2,008 million in 2013). Operating margin was 11.6% (12.0% in 2013),
with decreased volumes, unfavorable product mix, and negative industrial cost absorption, offset by positive net pricing as well as SG&A and R&D expense reductions.
For the fourth quarter 2014, net sales totaled $3,403 million, a decrease of 17.8% compared to the same period in 2013 (down 14.2% on a constant
currency basis), due to negative volume and product mix, partially offset by positive pricing.
Operating profit was $241 million in the fourth
quarter, compared to $312 million for Q4 2013, with an operating margin of 7.1% (7.5% in Q4 2013). The decrease was driven by unfavorable volume, mix and industrial costs (primarily related to production curtailments to realign inventory to market
demand), partially offset by favorable pricing, as well as SG&A and R&D expense reductions.
6
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Construction Equipment
CONSTRUCTION EQUIPMENT
Net sales &
Operating profit/(loss) ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
3,346 |
|
|
|
3,258 |
|
|
|
2.7 |
% |
|
Net sales |
|
|
800 |
|
|
|
832 |
|
|
|
-3.8 |
% |
| |
79 |
|
|
|
(97 |
) |
|
|
176 |
|
|
Operating profit/(loss) |
|
|
9 |
|
|
|
(53 |
) |
|
|
62 |
|
| |
2.4 |
|
|
|
(3.0 |
) |
|
|
5.4 p.p. |
|
|
Operating margin (%) |
|
|
1.1 |
|
|
|
(6.4 |
) |
|
|
7.5 p.p. |
|
Net sales for Construction Equipment were $3,346 million in 2014, up 2.7% from 2013 (up 5.1% on a constant
currency basis), due to positive pricing in NAFTA and LATAM, along with positive volume and mix in NAFTA and EMEA. This was partially offset by weakened activity in LATAM and APAC. The geographic distribution of net sales for the year was 44% NAFTA,
20% EMEA, 27% LATAM and 9% APAC.
In 2014, worldwide heavy and light construction equipment industry sales were down 9% and up 5%, respectively, from the
prior year. Industry heavy construction equipment sales were up in NAFTA and EMEA but decreased in LATAM and APAC. Industry light construction equipment sales were up in NAFTA and EMEA, flat in APAC and down considerably in LATAM.
Construction Equipment’s worldwide market share was in line with the market overall. For heavy construction equipment, market share increased in all
regions. For light construction equipment, market share was down slightly in APAC and EMEA, while up in LATAM.
Construction Equipment’s worldwide
production was in line with retail sales for 2014.
Construction Equipment reported operating profit of $79 million for 2014 compared to an
operating loss of $97 million for 2013, with an operating margin of 2.4%, as a result of favorable pricing in NAFTA and LATAM, positive volume and mix in all regions and lower SG&A and R&D expenses.
For the fourth quarter 2014, net sales totaled $800 million, a decrease of 3.8% compared to the same period in 2013 (down 0.5% on a constant
currency basis), with weakness in LATAM, APAC and EMEA being mostly offset by favorable trading conditions in NAFTA.
Operating profit was $9
million in the fourth quarter, compared to an operating loss of $53 million for Q4 2013, with an operating margin of 1.1%, due to lower SG&A and R&D expenses as well as favorable volume and mix.
7
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Commercial Vehicles
COMMERCIAL VEHICLES
Net sales &
Operating profit/(loss) ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
10,888 |
|
|
|
11,278 |
|
|
|
-3.5 |
% |
|
Net sales |
|
|
3,354 |
|
|
|
3,551 |
|
|
|
5.5 |
% |
| |
29 |
|
|
|
74 |
|
|
|
-45 |
|
|
Operating profit |
|
|
100 |
|
|
|
98 |
|
|
|
2 |
|
| |
0.3 |
|
|
|
0.7 |
|
|
|
-0.4 p.p. |
|
|
Operating margin (%) |
|
|
3.0 |
|
|
|
2.8 |
|
|
|
0.2 p.p. |
|
Net sales for Commercial Vehicles were $10,888 million in 2014, a decrease of 3.5%
compared to 2013 (down 1.6% on a constant currency basis) due to lower volumes and the negative impact of currency translation, partially offset by better pricing in all regions. Net sales increased in EMEA driven by higher volumes and favorable mix
for trucks, despite lower deliveries in the bus business due to the transition to Euro VI applications. In LATAM, net sales decreased significantly (-31.4%) as a result of overall weak market conditions, production curtailments to realign dealer
inventories to market demand, and the negative impact of currency translation. In APAC, net sales increased due to higher volumes, mainly for buses, partially offset by the negative impact of currency translation. The geographic distribution of net
sales for the year was 74% EMEA, 16% LATAM and 10% APAC.
During 2014, Commercial Vehicles delivered a total of 128,163 vehicles (including buses
and specialty vehicles), representing a 5.5% decrease from 2013. Volumes were higher in the light segment (+2.1%), primarily as a result of the launch of the new Daily, while volumes declined in the heavy (-8.7%) and medium (-24.5%) segments driven
by weak trading conditions in LATAM and Euro V pre-buy demand in the second half of 2013 in EMEA. Commercial Vehicles deliveries increased by 3.9% in EMEA and 0.9% in APAC, but declined 37.5% in LATAM (with Brazil down approximately 33% and
Argentina down approximately 39%).
The European truck market (GVW >3.5 tons) grew by 1.0% compared to 2013 to approximately 667,700
units. Light vehicles (GVW 3.5-6 tons) increased by 8.4%, while the medium vehicles market (GVW 6.1-15.9 tons) and heavy vehicles market (GVW >16 tons) decreased by 18.4% and 6%, respectively, mainly due to increased sales of Euro V
vehicles in the second half of 2013 prior to the introduction of Euro VI emissions regulations in January 2014. The industry continued to experience large variations in demand across markets.
The Company’s market share in the European truck market (GVW >3.5 tons) remained unchanged year over year at an estimated 10.9%. In the light
segment, the share is estimated to be 10.7% (down 0.6 p.p.). In the medium segment, the Company’s market share increased by 4.5 p.p. to 29.1%, with gains in nearly all markets, and in the heavy segment was up 0.6 p.p. to 7.5%.
In LATAM, new truck registrations (GVW >3.5 tons), at 188,800 units, were down 16.4% compared to 2013. The largest decrease was registered in
Venezuela, down 73.1%, while Argentina was down 26.0% and Brazil decreased 9.4%.
The Company’s share of the LATAM market (GVW >3.5 tons)
was down 0.9 p.p. from 2013 to 10.1%, mainly driven by a 1.0 percentage point decrease in Brazil to 7.8%. Market share increased by 0.8 p.p. and 0.4 p.p., respectively, in light and medium segments, while market share declined by 1.9 p.p. in the
heavy segment.
8
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Commercial Vehicles closed the year with an operating profit of $29 million compared to an operating
profit of $74 million for 2013, with an operating margin of 0.3% (0.7% for 2013). Difficult trading conditions and negative foreign exchange currency impacts in LATAM were partially offset by the recovery in trucks in EMEA, and cost control actions
in SG&A.
For the fourth quarter 2014, Commercial Vehicles’ net sales totaled $3,354 million, a decrease of 5.5% compared to the
same period in 2013 (up 0.9% on a constant currency basis). Net sales increased in EMEA as a result of favorable mix for trucks, despite lower volumes due to 2013 Euro V pre-buy impact. In APAC, Commercial Vehicles registered higher volumes mainly
for buses due to deliveries in certain markets within the region. LATAM volumes were down due to unfavorable market conditions.
Operating profit
was $100 million for the quarter, compared to $98 million for Q4 2013, with an operating margin of 3.0% (2.8% in Q4 2013). Favorable pricing in all regions and continuing cost containment on SG&A expenses offset lower volumes and the negative
fixed-cost absorption in EMEA, when compared to the positive effects in Q4 2013 mainly driven by the Euro V pre-buy, and in LATAM, where markets remained weak.
Powertrain
POWERTRAIN
Net sales & Operating profit/(loss) ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
4,464 |
|
|
|
4,412 |
|
|
|
1.2 |
% |
|
Net sales |
|
|
988 |
|
|
|
1,331 |
|
|
|
-25.8 |
% |
| |
223 |
|
|
|
187 |
|
|
|
36 |
|
|
Operating profit |
|
|
66 |
|
|
|
69 |
|
|
|
-3 |
|
| |
5.0 |
|
|
|
4.2 |
|
|
|
0.8 p.p. |
|
|
Operating margin (%) |
|
|
6.7 |
|
|
|
5.2 |
|
|
|
1.5 p.p. |
|
Net sales for Powertrain were $4,464 million in 2014, an increase of 1.2% compared to 2013 (up 1.4% on a
constant currency basis), primarily attributable to higher volumes. Sales to external customers accounted for 41% of total net sales (34% in 2013).
During the year, Powertrain sold a total of 583,589 engines, an increase of 7.1% compared to 2013. By major customer, 24% of engines were supplied to
Agricultural Equipment, 24% to Commercial Vehicles, 5% to Construction Equipment and the remaining 47% to external customers (units sold to third parties were up 25% compared to 2013). Additionally, Powertrain delivered 64,174 transmissions (+3.3%
compared to 2013) and 156,921 axles, in line with the prior year.
Powertrain closed the year with an operating profit of $223 million, up $36
million from 2013, with an operating margin of 5.0% (4.2% for 2013). The improvement was due to the increase in volumes, a larger proportion of third-party business, and industrial efficiencies.
For the fourth quarter 2014, Powertrain net sales totaled $988 million, a decrease of 25.8% over the same period in 2013 (down 19.1% on a
constant currency basis) due to a different quarterly cadence in engine production year over year.
9
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Operating profit was $66 million for the quarter (operating margin of 6.7%), compared to $69 million
(operating margin of 5.2%) for Q4 2013, with the impact of lower volumes partially offset by cost containment actions.
Financial Services
FINANCIAL SERVICES
Revenues & Net
income ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
Change |
|
|
|
|
2014 |
|
|
2013 |
|
|
Change |
|
| |
1,828 |
|
|
|
1,679 |
|
|
|
8.9 |
% |
|
Revenues |
|
|
465 |
|
|
|
432 |
|
|
|
7.6 |
% |
| |
364 |
|
|
|
342 |
|
|
|
22 |
|
|
Net income |
|
|
98 |
|
|
|
122 |
|
|
|
-24 |
|
In 2014 Financial Services reported revenues of $1,828 million, an increase of 8.9% compared to 2013, primarily
driven by the increase in the average value of the portfolio.
Net income was $364 million for the year, compared to $342 million for 2013 which
was negatively affected by the dissolution cost, net of taxes, of $25 million related to the joint venture with the Barclays group. Excluding this item, the improvement mainly attributable to a higher average portfolio value was offset by
higher provisions for credit losses and higher income taxes.
Retail loan originations in the year were $10.8 billion, a decrease of $0.6 billion compared
to 2013. The managed portfolio (including joint ventures) of $27.3 billion (of which retail was 65% and wholesale 35%) was up $0.4 billion compared to December 31, 2013. Excluding the impact of currency, the managed portfolio increased $2.2
billion, primarily in NAFTA (retail and wholesale) and LATAM (wholesale).
For the fourth quarter 2014, Financial Services’ revenues
totaled $465 million, up 7.6% compared to the same period in 2013, primarily due to the increase in the average value of the portfolio.
Net
income was $98 million for the quarter compared to $122 million for Q4 2013, as the increase in revenues, driven by higher average portfolio, and lower provisions for credit losses were more than offset by higher income taxes.
10
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Dividends
Based on estimated 2014 profit and retained earnings available for distribution by CNH Industrial N.V., and subject to formal Board approval of the
Company’s 2014 financial statements anticipated to occur on or before beginning of March 2015, the Board of Directors of CNH Industrial N.V. intends to recommend to the Company’s shareholders at the Annual General Meeting a dividend of
€0.20 per common share, totaling approximately $307 million at the exchange rate of 1.134 U.S. dollars per euro on January 28, 2015 (€271 million).
2015 U.S. GAAP Outlook
The Company expects improved
profitability in Commercial Vehicles and Construction Equipment, coupled with structural cost improvement measures from the Company’s Efficiency Program now extended to Agricultural Equipment. These actions are expected to buffer, but not fully
offset the negative impact from the continuation of challenging trading conditions in the row crop sector of the agricultural industry, and the impact of the recent significant appreciation of the U.S. dollar against the Company’s other trading
currencies, allowing the Company to hold operating margin unless there are further currency deteriorations from the current rate levels outside of the United States.
Therefore, CNH Industrial is setting its 2015 guidance as follows:
| |
• |
|
Net sales of Industrial Activities of approximately $28 billion, with an operating margin of Industrial Activities between 6.1% and 6.4%; |
| |
• |
|
Net industrial debt at the end of 2015 between $2.2 billion and $2.4 billion, with the expected cash generation during the year resulting primarily from the inventory reduction in the Agricultural Equipment segment.
|
|
|
|
|
|
|
|
|
|
|
| Sergio Marchionne |
|
|
|
Richard Tobin |
| Chairman |
|
|
|
Chief Executive Officer |
11
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
About CNH Industrial
CNH Industrial N.V. (NYSE: CNHI /MI: CNHI) is a global leader in the capital goods sector with established industrial experience, a wide range of products and
a worldwide presence. Each of the individual brands belonging to the Company is a major international force in its specific industrial sector: Case IH, New Holland Agriculture and Steyr for tractors and agricultural machinery; Case and New Holland
Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defence Vehicles for defence and
civil protection; and FPT Industrial for engines and transmissions. More information can be found on the corporate website: www.cnhindustrial.com
Additional Information
Today, at 4:00 p.m. GMT,
management will hold a conference call to present 2014 fourth quarter and full year results to financial analysts and institutional investors. The call can be followed live and a recording will be available later on the Company’s website
(www.cnhindustrial.com). A presentation will be made available on the CNH Industrial website prior to the call.
Non-GAAP Financial Information
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 results and enhance the reader’s ability to assess CNH Industrial’s financial performance and financial position. They provide measures which facilitate management’s
ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. These and similar measures are widely used in the industries in which the Company operates. These
financial measures may not be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position prepared in accordance with U.S. GAAP and/or
IFRS.
CNH Industrial non-GAAP financial measures are defined as follows:
| |
• |
|
Operating Profit under U.S. GAAP: Operating Profit of Industrial Activities is defined as net sales less cost of goods sold, selling, general and administrative expenses and research and development expenses. Operating
Profit of Financial Services is defined as revenues, less selling, general and administrative expenses, interest expenses and certain other operating expenses. |
| |
• |
|
Trading Profit under IFRS: Trading Profit is derived from financial information prepared in accordance with IFRS and is defined as income before restructuring, gains/(losses) on disposal of investments and other unusual
items, interest expense of Industrial Activities, income taxes, equity in income (loss) of unconsolidated subsidiaries and affiliates, non-controlling interests. |
| |
• |
|
Operating Profit under IFRS: Operating Profit under IFRS is computed starting from Trading Profit under IFRS plus/minus restructuring costs, other income (expenses) that are unusual in the ordinary course of business
(such as gains and losses on the disposal of investments and other unusual items arising from infrequent external events or market conditions). |
| |
• |
|
Net income (loss) before restructuring and other exceptional items: it is defined as Net income (loss), less restructuring charges and exceptional items, after tax. |
| |
• |
|
Net Debt and Net Debt of Industrial Activities (or Net Industrial Debt): CNH Industrial provides the reconciliation of Net Debt to Total Debt, which is the most directly comparable measure included in the consolidated
balance sheets. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for
Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Debt of Industrial Activities. |
12
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
| |
• |
|
Working capital: it is defined as trade receivables and financing receivables related to sales, net, plus inventories, less trade payables, plus other assets (liabilities), net. |
| |
• |
|
Constant Currency: CNH Industrial discusses the fluctuations in revenues and certain non-GAAP financial measures on a constant currency basis by applying the prior year exchange rates to current year’s values
expressed in local currency in order to eliminate the impact of foreign exchange rate fluctuations. |
Forward-looking statements
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”, “could”, “should”, “intend”, “estimate”,
“anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”,
“prospects”, “plan”, or similar terminology. Forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and
other factors, many of which are outside the Company’s control and are difficult to predict. If any of these risks and uncertainties materialize or other assumptions underlying any of the forward-looking statements prove to be incorrect the
actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements. Factors, risks, and uncertainties that could cause actual results to differ materially from those
contemplated by the forward-looking statements include, among others: the many interrelated factors that affect consumer confidence and worldwide demand for capital goods and capital goods-related products; general economic conditions in each of the
Company’s markets; changes in government policies regarding banking, monetary and fiscal policies; legislation, particularly relating to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program
policies, trade and commerce and infrastructure development; actions of competitors in the various industries in which the Company competes; development and use of new technologies and technological difficulties; production difficulties, including
capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; housing starts and other construction activity; the Company’s ability to obtain
financing or to refinance existing debt; a decline in the price of used vehicles; the resolution of pending litigation and investigations; the Company’s relations with Kobelco Construction Machinery Co., Ltd and Sumitomo (S.H.I.) Construction
Machinery Co., Ltd.; the Company’s pension plans and other post-employment obligations; political and civil unrest; volatility and deterioration of capital and financial markets, including further worsening of the Eurozone sovereign debt crisis
and other similar financial risks and uncertainties; and the Company’s success in managing the risks involved in the foregoing. Further information concerning factors, risks, and uncertainties that could materially affect the Company’s
financial results is included in our annual report on Form 20-F for the year ended December 31, 2013, prepared in accordance with U.S. GAAP and in our EU Annual Report at December 31, 2013, prepared in accordance with IFRS. Investors
should refer to and consider the incorporated information on risks, factors, and uncertainties in addition to the information presented here.
Forward-looking statements speak only as of the date on which such statements are made. Furthermore, in light of ongoing difficult macroeconomic conditions,
both globally and in the industries in which CNH Industrial operates, it is particularly difficult to forecast results, and any estimates or forecasts of particular periods that are provided in this earnings release are uncertain. Accordingly,
investors should not place undue reliance on such forward-looking statements. Actual results could differ materially from those anticipated in such forward-looking statements. CNH Industrial does not undertake an obligation to update or revise
publicly any forward-looking statements.
The Company’s outlook is based upon assumptions relating to the factors described in the earnings release,
which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. The Company undertakes no obligation to update or revise its outlook or forward-looking statements, whether as a result of new
developments or otherwise. Further information concerning the
13
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
Company and its businesses, including factors that potentially could materially affect the Company’s financial results, is included in the Company’s reports and filings with the U.S.
Securities and Exchange Commission, the Autoriteit Financiële Markten (“AFM”) and Commissione Nazionale per le Società e la Borsa (“CONSOB”).
Contacts
|
|
|
| Media Inquiries |
|
Investor Relations |
|
|
| Richard Gadeselli Tel: +44 (0) 1268
292468 |
|
Federico Donati Tel: +39 011 00
62756 |
|
|
| Laura Overall Tel: +44 (0) 1268
292468 |
|
Noah Weiss Tel: +1 630 887 3745 |
|
|
| e-mail: mediarelations@cnhind.com
www.cnhindustrial.com |
|
|
14
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statements of Operations
For The Years And The Three Months Ended December 31, 2014 and 2013
(Unaudited)
(U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ($ million) |
|
Years Ended December 31, |
|
|
Three Months Ended December 31, |
|
| |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
|
|
31,196 |
|
|
|
32,632 |
|
|
|
8,018 |
|
|
|
8,977 |
|
| Finance and interest income |
|
|
1,359 |
|
|
|
1,204 |
|
|
|
347 |
|
|
|
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL REVENUES |
|
|
32,555 |
|
|
|
33,836 |
|
|
|
8,365 |
|
|
|
9,290 |
|
| Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
|
25,534 |
|
|
|
26,551 |
|
|
|
6,737 |
|
|
|
7,434 |
|
| Selling, general and administrative expenses |
|
|
2,925 |
|
|
|
3,094 |
|
|
|
685 |
|
|
|
869 |
|
| Research and development expenses |
|
|
1,106 |
|
|
|
1,222 |
|
|
|
297 |
|
|
|
384 |
|
| Restructuring expenses |
|
|
184 |
|
|
|
71 |
|
|
|
86 |
|
|
|
39 |
|
| Interest expense |
|
|
1,318 |
|
|
|
1,196 |
|
|
|
342 |
|
|
|
333 |
|
| Other, net |
|
|
399 |
|
|
|
328 |
|
|
|
92 |
|
|
|
84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL COSTS AND EXPENSES |
|
|
31,466 |
|
|
|
32,462 |
|
|
|
8,239 |
|
|
|
9,143 |
|
| INCOME BEFORE INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES |
|
|
1,089 |
|
|
|
1,374 |
|
|
|
126 |
|
|
|
147 |
|
| Income taxes |
|
|
467 |
|
|
|
671 |
|
|
|
59 |
|
|
|
130 |
|
| Equity in income of unconsolidated subsidiaries and affiliates |
|
|
86 |
|
|
|
125 |
|
|
|
20 |
|
|
|
37 |
|
| NET INCOME |
|
|
708 |
|
|
|
828 |
|
|
|
87 |
|
|
|
54 |
|
| Net income (loss) attributable to noncontrolling interests |
|
|
(2 |
) |
|
|
151 |
|
|
|
4 |
|
|
|
(6 |
) |
| NET INCOME ATTRIBUTABLE TO CNH INDUSTRIAL N.V. |
|
|
710 |
|
|
|
677 |
|
|
|
83 |
|
|
|
60 |
|
|
|
|
|
|
| (in $) |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
0.52 |
|
|
|
0.54 |
|
|
|
0.06 |
|
|
|
0.04 |
|
| Diluted |
|
|
0.52 |
|
|
|
0.54 |
|
|
|
0.06 |
|
|
|
0.04 |
|
15
|
|
|
|
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|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Balance Sheets
As of December 31, 2014 and 2013
(Unaudited)
(U.S. GAAP)
|
|
|
|
|
|
|
|
|
| ($ million) |
|
December 31, 2014 |
|
|
December 31, 2013 |
|
| Cash and cash equivalents |
|
|
5,163 |
|
|
|
5,567 |
|
| Restricted cash |
|
|
978 |
|
|
|
922 |
|
| Financing receivables, net |
|
|
21,472 |
|
|
|
21,976 |
|
| Inventories, net |
|
|
7,008 |
|
|
|
7,410 |
|
| Property, plant and equipment, net and Equipment under operating leases |
|
|
8,383 |
|
|
|
8,149 |
|
| Intangible assets, net |
|
|
3,334 |
|
|
|
3,314 |
|
| Other receivables and assets |
|
|
5,575 |
|
|
|
6,505 |
|
|
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
|
51,913 |
|
|
|
53,843 |
|
| Debt |
|
|
29,594 |
|
|
|
29,866 |
|
| Other payables and liabilities |
|
|
17,342 |
|
|
|
19,010 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
46,936 |
|
|
|
48,876 |
|
| Redeemable noncontrolling interest |
|
|
16 |
|
|
|
12 |
|
| Equity attributable to CNH Industrial N.V. |
|
|
4,922 |
|
|
|
4,901 |
|
| Noncontrolling interests |
|
|
39 |
|
|
|
54 |
|
| Equity |
|
|
4,961 |
|
|
|
4,955 |
|
|
|
|
|
|
|
|
|
|
| TOTAL EQUITY AND LIABILITIES |
|
|
51,913 |
|
|
|
53,843 |
|
16
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statements of Cash Flows
For The Years Ended December 31, 2014 and 2013
(Unaudited)
(U.S. GAAP)
|
|
|
|
|
|
|
|
|
| ($ million) |
|
2014 |
|
|
2013 |
|
| Net income |
|
|
708 |
|
|
|
828 |
|
| Adjustments to reconcile net income to net cash provided by operating activities |
|
|
(27 |
) |
|
|
694 |
|
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
681 |
|
|
|
1,522 |
|
| NET CASH USED IN INVESTING ACTIVITIES |
|
|
(1,959 |
) |
|
|
(3,788 |
) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
1,365 |
|
|
|
2,616 |
|
| Effect of foreign exchange rate changes on cash and cash equivalents |
|
|
(491 |
) |
|
|
18 |
|
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
(404 |
) |
|
|
368 |
|
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
|
|
5,567 |
|
|
|
5,199 |
|
| CASH AND CASH EQUIVALENTS, END OF YEAR |
|
|
5,163 |
|
|
|
5,567 |
|
17
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Other Supplemental Financial Information
(Unaudited)
(U.S. GAAP)
CNH INDUSTRIAL
Net debt ($
million)
|
|
|
|
|
|
|
|
|
| |
|
12.31.2014 |
|
|
12.31.2013 |
|
| Total debt (1) |
|
|
(29,594 |
) |
|
|
(29,866 |
) |
| - Asset-backed financing |
|
|
(13,587 |
) |
|
|
(14,712 |
) |
| - Other debt |
|
|
(16,007 |
) |
|
|
(15,154 |
) |
| Derivative hedging debt |
|
|
35 |
|
|
|
44 |
|
| Cash and cash equivalents |
|
|
5,163 |
|
|
|
5,567 |
|
| Restricted cash |
|
|
978 |
|
|
|
922 |
|
| Net debt |
|
|
(23,418 |
) |
|
|
(23,333 |
) |
| Industrial Activities |
|
|
(2,691 |
) |
|
|
(2,214 |
) |
| Financial Services |
|
|
(20,727 |
) |
|
|
(21,119 |
) |
| Cash, cash equivalents and restricted cash |
|
|
6,141 |
|
|
|
6,489 |
|
| Undrawn committed facilities |
|
|
2,716 |
|
|
|
2,224 |
|
| Available liquidity |
|
|
8,857 |
|
|
|
8,713 |
|
| (1) |
Inclusive of adjustments to fair value hedges. |
(U.S. GAAP)
CNH INDUSTRIAL
Change in Net Industrial Debt ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
|
|
2014 |
|
|
2013 |
|
| |
(2,214) |
|
|
|
(1,961 |
) |
|
Net industrial (debt)/cash at beginning of period |
|
|
(3,935 |
) |
|
|
(3,362 |
) |
| |
708 |
|
|
|
828 |
|
|
Net income |
|
|
87 |
|
|
|
54 |
|
| |
725 |
|
|
|
686 |
|
|
Amortization and depreciation (*) |
|
|
173 |
|
|
|
178 |
|
| |
(87) |
|
|
|
59 |
|
|
Changes in provisions and similar, and items related to assets sold under buy-back commitments, and assets under operating lease |
|
|
(51 |
) |
|
|
(106 |
) |
| |
(1,025) |
|
|
|
(19 |
) |
|
Change in working capital |
|
|
1,456 |
|
|
|
1,645 |
|
| |
(1,005) |
|
|
|
(1,220 |
) |
|
Investments in property, plant and equipment, and intangible assets (*) |
|
|
(417 |
) |
|
|
(576 |
) |
| |
8 |
|
|
|
(34 |
) |
|
Other changes |
|
|
(69 |
) |
|
|
(7 |
) |
| |
(676) |
|
|
|
300 |
|
|
Net industrial cash flow |
|
|
1,179 |
|
|
|
1,188 |
|
| |
(364) |
|
|
|
(374 |
) |
|
Capital increases and dividends |
|
|
2 |
|
|
|
(4 |
) |
| |
563 |
|
|
|
(179 |
) |
|
Currency translation differences |
|
|
63 |
|
|
|
(36 |
) |
| |
(477) |
|
|
|
(253 |
) |
|
Change in Net industrial debt |
|
|
1,244 |
|
|
|
1,148 |
|
| |
(2,691) |
|
|
|
(2,214 |
) |
|
Net industrial (debt)/cash at end of period |
|
|
(2,691 |
) |
|
|
(2,214 |
) |
| (*) |
Excluding assets sold under buy-back commitments and assets under operating lease. |
18
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Other Supplemental Financial Information
(Unaudited)
(U.S. GAAP)
CNH INDUSTRIAL
Net Income and basic EPS before
Restructuring and Exceptional Items
($ million, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
|
|
2014 |
|
|
2013 |
|
| |
708 |
|
|
|
828 |
|
|
Net income |
|
|
87 |
|
|
|
54 |
|
| |
168 |
|
|
|
68 |
|
|
Restructuring expenses, net of tax |
|
|
80 |
|
|
|
37 |
|
| |
64 |
|
|
|
51 |
|
|
Other exceptional items, net of tax |
|
|
— |
|
|
|
26 |
|
| |
940 |
|
|
|
947 |
|
|
Net income before restructuring and other exceptional items |
|
|
167 |
|
|
|
117 |
|
| |
930 |
|
|
|
795 |
|
|
Net income before restructuring and other exceptional items attributable to CNH Industrial N.V. |
|
|
162 |
|
|
|
122 |
|
| |
1,354 |
|
|
|
1,255 |
|
|
Weighted average shares outstanding (million) |
|
|
1,355 |
|
|
|
1,350 |
|
| |
0.69 |
|
|
|
0.63 |
|
|
Basic EPS before restructuring and exceptional items ($) |
|
|
0.12 |
|
|
|
0.08 |
|
Translation of financial statements denominated in a currency other than the U.S. dollar
The principal exchange rates used to translate into U.S. dollars the financial statements prepared in currencies other than the U.S. dollar were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average 2014 |
|
|
At December 31, 2014 |
|
|
Average 2013 |
|
|
At December 31, 2013 |
|
| Euro |
|
|
0.753 |
|
|
|
0.824 |
|
|
|
0.753 |
|
|
|
0.725 |
|
| Pound sterling |
|
|
0.607 |
|
|
|
0.642 |
|
|
|
0.640 |
|
|
|
0.605 |
|
| Swiss franc |
|
|
0.914 |
|
|
|
0.990 |
|
|
|
0.927 |
|
|
|
0.890 |
|
| Polish zloty |
|
|
3.149 |
|
|
|
3.520 |
|
|
|
3.161 |
|
|
|
3.012 |
|
| Brazilian real |
|
|
2.349 |
|
|
|
2.653 |
|
|
|
2.159 |
|
|
|
2.362 |
|
| Argentine peso |
|
|
8.115 |
|
|
|
8.551 |
|
|
|
5.469 |
|
|
|
6.518 |
|
| Turkish lira |
|
|
2.188 |
|
|
|
2.333 |
|
|
|
1.907 |
|
|
|
2.147 |
|
19
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Income Statement
For The Years And The Three Months Ended December 31, 2014 and 2013
(Unaudited)
(IFRS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ($ million) |
|
2014 |
|
|
2013 (*) |
|
|
4th Quarter
2014 |
|
|
4th Quarter
2013 (*) |
|
| Net revenues |
|
|
32,957 |
|
|
|
34,231 |
|
|
|
8,488 |
|
|
|
9,415 |
|
| Cost of sales |
|
|
26,841 |
|
|
|
27,750 |
|
|
|
7,081 |
|
|
|
7,796 |
|
| Selling, general and administrative costs |
|
|
2,753 |
|
|
|
2,961 |
|
|
|
643 |
|
|
|
818 |
|
| Research and development costs |
|
|
878 |
|
|
|
797 |
|
|
|
233 |
|
|
|
195 |
|
| Other income/(expenses) |
|
|
(86 |
) |
|
|
(86 |
) |
|
|
(13 |
) |
|
|
(9 |
) |
| TRADING PROFIT/(LOSS) |
|
|
2,399 |
|
|
|
2,637 |
|
|
|
518 |
|
|
|
597 |
|
| Gains/(losses) on the disposal of investments |
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
|
(25 |
) |
| Restructuring costs |
|
|
192 |
|
|
|
54 |
|
|
|
76 |
|
|
|
27 |
|
| Other unusual income/(expenses) |
|
|
(40 |
) |
|
|
(77 |
) |
|
|
(16 |
) |
|
|
(13 |
) |
| OPERATING PROFIT/(LOSS) |
|
|
2,167 |
|
|
|
2,481 |
|
|
|
426 |
|
|
|
532 |
|
| Financial income/(expenses) |
|
|
(776 |
) |
|
|
(615 |
) |
|
|
(191 |
) |
|
|
(162 |
) |
| Result from investments |
|
|
91 |
|
|
|
136 |
|
|
|
23 |
|
|
|
42 |
|
| Share of the profit/(loss) of investees accounted for using equity method |
|
|
90 |
|
|
|
135 |
|
|
|
22 |
|
|
|
42 |
|
| Other income/(expenses) from investments |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
| PROFIT/(LOSS) BEFORE TAXES |
|
|
1,482 |
|
|
|
2,002 |
|
|
|
258 |
|
|
|
412 |
|
| Income taxes |
|
|
566 |
|
|
|
784 |
|
|
|
125 |
|
|
|
178 |
|
| PROFIT/(LOSS) FROM CONTINUING OPERATIONS |
|
|
916 |
|
|
|
1,218 |
|
|
|
133 |
|
|
|
234 |
|
| Profit/(loss) from discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| PROFIT/(LOSS) |
|
|
916 |
|
|
|
1,218 |
|
|
|
133 |
|
|
|
234 |
|
| PROFIT/(LOSS) ATTRIBUTABLE TO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Owners of the parent |
|
|
917 |
|
|
|
1,048 |
|
|
|
128 |
|
|
|
237 |
|
| Non-controlling interests |
|
|
(1 |
) |
|
|
170 |
|
|
|
5 |
|
|
|
(3 |
) |
|
|
|
|
|
| (in $) |
|
|
|
|
|
|
|
|
|
|
|
|
| BASIC EARNINGS/(LOSS) PER COMMON SHARE |
|
|
0.68 |
|
|
|
0.83 |
|
|
|
0.10 |
|
|
|
0.17 |
|
| DILUTED EARNINGS/(LOSS) PER COMMON SHARE |
|
|
0.68 |
|
|
|
0.83 |
|
|
|
0.10 |
|
|
|
0.17 |
|
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
20
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statement of Financial Position
As of December 31, 2014 and 2013
(Unaudited)
(IFRS)
|
|
|
|
|
|
|
|
|
| ($ million) |
|
December 31, 2014 |
|
|
December 31, 2013 (*) |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Intangible assets |
|
|
6,031 |
|
|
|
6,046 |
|
| Property, plant and equipment and Leased assets |
|
|
8,251 |
|
|
|
8,026 |
|
| Inventories |
|
|
7,140 |
|
|
|
7,536 |
|
| Receivables from financing activities |
|
|
21,472 |
|
|
|
21,986 |
|
| Cash and cash equivalents |
|
|
6,141 |
|
|
|
6,489 |
|
| Other receivables and assets |
|
|
5,406 |
|
|
|
6,379 |
|
|
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
|
54,441 |
|
|
|
56,462 |
|
| EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
| Issued capital and reserves attributable to owners of the parent |
|
|
7,534 |
|
|
|
7,591 |
|
| Non-controlling interests |
|
|
43 |
|
|
|
71 |
|
|
|
|
|
|
|
|
|
|
| Total Equity |
|
|
7,577 |
|
|
|
7,662 |
|
| Debt |
|
|
29,701 |
|
|
|
29,946 |
|
| Other payables and liabilities |
|
|
17,163 |
|
|
|
18,854 |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities |
|
|
46,864 |
|
|
|
48,800 |
|
|
|
|
|
|
|
|
|
|
| TOTAL EQUITY AND LIABILITIES |
|
|
54,441 |
|
|
|
56,462 |
|
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
21
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Condensed Consolidated Statement of Cash Flows
For The Years Ended December 31, 2014 and 2013
(Unaudited)
(IFRS)
|
|
|
|
|
|
|
|
|
| ($ million) |
|
2014 |
|
|
2013 (*) |
|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
|
6,489 |
|
|
|
6,084 |
|
| Profit/(loss) |
|
|
916 |
|
|
|
1,218 |
|
| Adjustments to reconcile profit/(loss) to cash flows from/(used in) operating activities |
|
|
257 |
|
|
|
1,219 |
|
| CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES |
|
|
1,173 |
|
|
|
2,437 |
|
| CASH FLOWS FROM/(USED IN) INVESTMENT ACTIVITIES |
|
|
(2,380 |
) |
|
|
(4,555 |
) |
| CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES |
|
|
1,373 |
|
|
|
2,532 |
|
| Translation exchange differences |
|
|
(514 |
) |
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
| TOTAL CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(348 |
) |
|
|
405 |
|
| CASH AND CASH EQUIVALENTS AT END OF YEAR |
|
|
6,141 |
|
|
|
6,489 |
|
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
22
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Other Supplemental Financial Information
(Unaudited)
CNH INDUSTRIAL
Revenues by Segment under IFRS ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013(*) |
|
|
% change |
|
|
|
|
2014 |
|
|
2013(*) |
|
|
% change |
|
| |
15,204 |
|
|
|
16,763 |
|
|
|
-9.3 |
|
|
Agricultural Equipment |
|
|
3,403 |
|
|
|
4,142 |
|
|
|
-17.8 |
|
| |
3,346 |
|
|
|
3,258 |
|
|
|
2.7 |
|
|
Construction Equipment |
|
|
800 |
|
|
|
832 |
|
|
|
-3.8 |
|
| |
11,087 |
|
|
|
11,447 |
|
|
|
-3.1 |
|
|
Commercial Vehicles |
|
|
3,412 |
|
|
|
3,601 |
|
|
|
-5.2 |
|
| |
4,475 |
|
|
|
4,423 |
|
|
|
1.2 |
|
|
Powertrain |
|
|
991 |
|
|
|
1,333 |
|
|
|
-25.7 |
|
| |
(2,704) |
|
|
|
(3,050 |
) |
|
|
— |
|
|
Eliminations and other |
|
|
(527 |
) |
|
|
(860 |
) |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
31,408 |
|
|
|
32,841 |
|
|
|
-4.4 |
|
|
Total Industrial Activities |
|
|
8,079 |
|
|
|
9,048 |
|
|
|
-10.7 |
|
| |
2,086 |
|
|
|
1,950 |
|
|
|
7.0 |
|
|
Financial Services |
|
|
545 |
|
|
|
523 |
|
|
|
4.2 |
|
| |
(537) |
|
|
|
(560 |
) |
|
|
— |
|
|
Eliminations and other |
|
|
(136 |
) |
|
|
(156 |
) |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
32,957 |
|
|
|
34,231 |
|
|
|
-3.7 |
|
|
Total |
|
|
8,488 |
|
|
|
9,415 |
|
|
|
-9.8 |
|
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
CNH INDUSTRIAL
Trading profit/(loss) by Segment under
IFRS ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013(*) |
|
|
Change |
|
|
|
|
2014 |
|
|
2013(*) |
|
|
Change |
|
| |
1,689 |
|
|
|
1,949 |
|
|
|
-260 |
|
|
Agricultural Equipment |
|
|
238 |
|
|
|
331 |
|
|
|
-93 |
|
| |
66 |
|
|
|
(109 |
) |
|
|
175 |
|
|
Construction Equipment |
|
|
2 |
|
|
|
(53 |
) |
|
|
55 |
|
| |
2 |
|
|
|
145 |
|
|
|
-143 |
|
|
Commercial Vehicles |
|
|
113 |
|
|
|
135 |
|
|
|
-22 |
|
| |
220 |
|
|
|
210 |
|
|
|
10 |
|
|
Powertrain |
|
|
73 |
|
|
|
95 |
|
|
|
-22 |
|
| |
(110) |
|
|
|
(76 |
) |
|
|
-34 |
|
|
Eliminations and other |
|
|
(47 |
) |
|
|
(35 |
) |
|
|
-12 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1,867 |
|
|
|
2,119 |
|
|
|
-252 |
|
|
Total Industrial Activities |
|
|
379 |
|
|
|
473 |
|
|
|
-94 |
|
| |
532 |
|
|
|
518 |
|
|
|
14 |
|
|
Financial Services |
|
|
139 |
|
|
|
124 |
|
|
|
15 |
|
| |
— |
|
|
|
— |
|
|
|
— |
|
|
Eliminations and other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
2,399 |
|
|
|
2,637 |
|
|
|
-238 |
|
|
Total |
|
|
518 |
|
|
|
597 |
|
|
|
-79 |
|
| |
7.3 |
|
|
|
7.7 |
|
|
|
-0.4 p.p |
|
|
Trading margin (%) |
|
|
6.1 |
|
|
|
6.3 |
|
|
|
-0.2 p.p |
|
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
CNH INDUSTRIAL
Key Balance Sheet data under
IFRS ($ million)
|
|
|
|
|
|
|
|
|
| |
|
12.31.2014 |
|
|
12.31.2013(*) |
|
| Total assets |
|
|
54,441 |
|
|
|
56,462 |
|
| Total equity |
|
|
7,577 |
|
|
|
7,662 |
|
| Equity attributable to CNH Industrial N.V. |
|
|
7,534 |
|
|
|
7,591 |
|
| Net debt |
|
|
(23,590 |
) |
|
|
(23,290 |
) |
| Of which Net industrial debt |
|
|
(2,874 |
) |
|
|
(2,195 |
) |
| (*) |
Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. |
23
|
|
|
|
|
|
2014 FOURTH QUARTER AND FULL YEAR RESULTS |
CNH INDUSTRIAL N.V.
Other Supplemental Financial Information
(Unaudited)
CNH INDUSTRIAL
Net income reconciliation ($ million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Full Year |
|
|
|
|
4th Quarter |
|
| 2014 |
|
|
2013 |
|
|
|
|
2014 |
|
|
2013 |
|
| |
708 |
|
|
|
828 |
|
|
Net income under U.S. GAAP |
|
|
87 |
|
|
|
54 |
|
|
|
|
|
|
|
|
|
Adjustments to conform with IFRS: |
|
|
|
|
|
|
|
|
| |
231 |
|
|
|
443 |
|
|
Development costs, net of amortization |
|
|
50 |
|
|
|
203 |
|
| |
8 |
|
|
|
8 |
|
|
Goodwill and other intangible assets |
|
|
2 |
|
|
|
2 |
|
| |
56 |
|
|
|
16 |
|
|
Defined benefit plans |
|
|
44 |
|
|
|
4 |
|
| |
(8) |
|
|
|
17 |
|
|
Restructuring provisions |
|
|
10 |
|
|
|
12 |
|
| |
20 |
|
|
|
19 |
|
|
Other adjustments |
|
|
6 |
|
|
|
7 |
|
| |
(103) |
|
|
|
(158 |
) |
|
Tax impact on adjustments |
|
|
(6 |
) |
|
|
(52 |
) |
| |
4 |
|
|
|
45 |
|
|
Deferred tax assets and tax contingencies recognition |
|
|
(60 |
) |
|
|
4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
208 |
|
|
|
390 |
|
|
Total adjustments |
|
|
46 |
|
|
|
180 |
|
| |
916 |
|
|
|
1,218 |
|
|
Profit under IFRS |
|
|
133 |
|
|
|
234 |
|
CNH INDUSTRIAL
Total
Equity reconciliation ($ million)
|
|
|
|
|
|
|
|
|
| |
|
Full Year |
|
| |
|
2014 |
|
|
2013 |
|
| Total Equity under U.S. GAAP |
|
|
4,961 |
|
|
|
4,955 |
|
| Adjustments to conform with IFRS: |
|
|
|
|
|
|
|
|
| Development costs, net of amortization |
|
|
2,819 |
|
|
|
2,862 |
|
| Goodwill and other intangible assets |
|
|
(122 |
) |
|
|
(130 |
) |
| Defined benefit plans |
|
|
(6 |
) |
|
|
(29 |
) |
| Restructuring provisions |
|
|
(12 |
) |
|
|
(6 |
) |
| Other adjustments |
|
|
(16 |
) |
|
|
(15 |
) |
| Tax impact on adjustments |
|
|
(815 |
) |
|
|
(773 |
) |
| Deferred tax assets and tax contingencies recognition |
|
|
768 |
|
|
|
798 |
|
|
|
|
|
|
|
|
|
|
| Total adjustments |
|
|
2,616 |
|
|
|
2,707 |
|
|
|
|
|
|
|
|
|
|
| Total Equity under IFRS |
|
|
7,577 |
|
|
|
7,662 |
|
24
|
|
| Q4
& FY 2014 Results Review January
29
th
,
2015
Exhibit 99.2 |
|
|
| 2
Safe Harbor Statement and Disclosures
Q4 & FY 2014 Results Review
Certain
statements
contained
in
this
conference
call
and
accompanying
material
that
are
not
statements
of
historical
fact
constitute
forward-looking
statements,
notwithstanding
that
such
statements
are
not
specifically
identified.
They
may
also
include
financial
measures
that
are
not
in
conformance
with
accounting
principals
generally
accepted
in
the
United
States
(GAAP).
These
statements
may
include
terminology
such
as
“may”,
“will”,
“expect”,
“could”,
“should”,
“intend”,
“estimate”,
“anticipate”,
“believe”,
“remain”,
“on
track”,
“design”,
“target”,
“objective”,
“goal”,
“forecast”,
“projection”,
“outlook”,
“prospects”,
“plan”,
or
similar
terminology.
Forward-looking
statements
are
not
guarantees
of
future
performance.
Rather,
they
are
based
on
current
views
and
assumptions
and
involve
known
and
unknown
risks,
uncertainties
and
other
factors,
many
of
which
are
outside
the
Company’s
control
and
are
difficult
to
predict.
If
any
of
these
risks
and
uncertainties
materialize
or
other
assumptions
underlying
any
of
the
forward-looking
statements
prove
to
be
incorrect
the
actual
results
or
developments
may
differ
materially
from
any
future
results
or
developments
expressed
or
implied
by
the
forward-looking
statements.
Factors,
risks,
and
uncertainties
that
could
cause
actual
results
to
differ
materially
from
those
contemplated
by
the
forward-looking
statements
include,
among
others:
the
many
interrelated
factors
that
affect
consumer
confidence
and
worldwide
demand
for
capital
goods
and
capital
goods-related
products;
general
economic
conditions
in
each
of
the
Company’s
markets;
changes
in
government
policies
regarding
banking,
monetary
and
fiscal
policies;
legislation,
particularly
relating
to
capital
goods-related
issues
such
as
agriculture,
the
environment,
debt
relief
and
subsidy
program
policies,
trade
and
commerce
and
infrastructure
development;
actions
of
competitors
in
the
various
industries
in
which
the
Company
competes;
development
and
use
of
new
technologies
and
technological
difficulties;
production
difficulties,
including
capacity
and
supply
constraints
and
excess
inventory
levels;
labor
relations;
interest
rates
and
currency
exchange
rates;
inflation
and
deflation;
energy
prices;
housing
starts
and
other
construction
activity;
the
Company’s
ability
to
obtain
financing
or
to
refinance
existing
debt;
a
decline
in
the
price
of
used
vehicles;
the
resolution
of
pending
litigation
and
investigations;
the
Company’s
relations
with
Kobelco
Construction
Machinery
Co.,
Ltd
and
Sumitomo
(S.H.I.)
Construction
Machinery
Co.,
Ltd.;
the
Company’s
pension
plans
and
other post-
employment
obligations;
political
and
civil
unrest;
volatility
and
deterioration
of
capital
and
financial
markets,
including
further
worsening
of
the
Eurozone
sovereign
debt
crisis,
other
similar
risks
and
uncertainties;
and
the
Company’s
success
in
managing
the
risks
involved
in
the
foregoing.
Further
information
concerning
factors,
risks,
and
uncertainties
that
could
materially
affect
the
Company’s
financial
results
is
included
in
our
annual
report
on
Form 20-F for
the
year
ended
December
31,
2013,
prepared
in
accordance
with
U.S.
GAAP
and
in
our
EU
Annual
Report
at
December
31,
2013,
prepared
in
accordance
with
IFRS.
Investors
should
refer
and
consider
the
incorporated
information
on
risks
factors
and
uncertainties
in
addition
to
the
information
presented
here.
Investors
should
consider
non-GAAP
financial
measures
in
addition
to,
and
not
as
a
substitute
for,
financial
measures
prepared
in accordance
with
GAAP.
Forward-
looking
statements
speak
only
as
of
the
date
on
which
such
statements
are
made.
Furthermore,
in
light
of
ongoing
difficult
macroeconomic
conditions,
both
globally
and
in
the
industries
in
which
CNH
Industrial
operates,
it
is
particularly
difficult
to
forecast
results,
and
any
estimates
or
forecasts
of
particular
periods
that
are
provided
in
this
earnings
release
are
uncertain.
Accordingly,
investors
should
not
place
undue
reliance on
such
forward-
looking
statements.
Actual
results
could
differ
materially
from
those
anticipated
in
such
forward-looking
statements.
CNH
Industrial
does
not
undertakean
obligation
to
update
or
revise
publicly
any
forward-looking
statements.
The
Company’s
outlook
is
based
upon
assumptions
relating
to
the
factors
described
in
the
earnings
release,
which
are
sometimes
based
upon
estimates
and
data
received
from
third
parties.
Such
estimates
and
data
are
often
revised.
The
Company
undertakes
no
obligation
to
update
or
revise
its
outlook
or forward-
looking
statements,
whether
as
a
result
of
new
developments
or
otherwise.
Further
information
concerning
the
Company
and
its
businesses,
including
factors
that
potentially
could
materially
affect
the
Company’s
financial
results,
is
included
in
the
Company’s
reports
and
filings
with
the
U.S.
Securitiesand
Exchange
Commission,
the
AFM
and
CONSOB
January 29
, 2015
th |
|
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| 3
FY 2014
Q4 & FY 2014 Results Review
Financial Highlights
0.63
0.69
32.7
31.2
Key financial highlights:
Industrial Activities net sales at $31.2bn down 2.8% in
constant currency vs. last year
Operating profit of Industrial Activities at $2.0bn down 3.6%
in constant currency vs. last year; operating margin at 6.4%
in line with last year
Net Income before restructuring and other exceptional items
of $940mn, flat to prior year
EPS excluding restructuring and other exceptional items was
up 10% to $0.69 per share
Dividend
*
CNH Industrial N.V. Board of Directors to recommend to the
Company’s shareholders at the AGM a dividend of €0.20 per
common share, totaling approximately €271mn ($307mn
equivalent)
Efficiency program update
Proceeding apace with $184mn charges booked in FY ‘14,
expecting to generate savings of ~$80mn in 2015
(*) Based on estimated 2014 profit and retained earnings available for distribution by CNH
Industrial N.V.. Dividend $ amount at the exchange rate of 1.134 US dollars per Euro on January 28, 2015
Note: All figures are provided herein on a US GAAP $ basis unless otherwise
indicated January 29
, 2015
th |
|
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| 5
Q4 & FY 2014 Highlights
Consolidated
Industrial Activities
Net
Sales
at
$8.0bn
in
Q4
2014
down
10.9%
vs.
last
year
($31.2bn
down
4.5%
in
FY
2014)
Operating
Profit
at
$376mn
in
Q4
2014
down
3.3%
with
margin
at
4.7%
up
0.4
p.p.
vs.
last
year
(Operating
profit
at
$2.0bn
down
5.1%
and
operating
margin
at
6.4%
in
FY
2014)
Net
Industrial
Debt
as
of
Dec.
31,
2014
at
$2.7bn
Net
Industrial
Cash
Flow
in
Q4
2014
positive
$1.2bn
(Net
Industrial
Cash
Flow
negative
$0.7bn
in
FY
2014)
Revenues
at
$8.4bn
in
Q4
2014
down
10%
vs.
last
year
(Revenues
at
$32.6bn
down
3.8%
in
FY
2014)
Net
income
at
$87mn
in
Q4
2014
($708mn
in
FY
2014)
Net
income
before
restructuring
and
other
exceptional
items
at
$167mn
in
Q4
2014
($
940mn
in
FY
2014)
EPS
at
$0.06
in
Q4
2014;
EPS
before
restructuring
and
other
exceptional
items
at
$0.12
(EPS
at
$0.52
in
FY
2014;
EPS
before
restructuring
and
other
exceptional
items
at
$0.69)
Available
Liquidity
as
of
Dec.
31,
2014
at
$8.9bn
(inclusive
of
$2.7bn
in
undrawn
committed
facilities)
Q4 & FY 2014 Results Review
January 29
, 2015
th |
|
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| 6
Q4 & FY 2014
From operating profit to net income
($mn)
Q4 2014
Q4 2013
FY 2014
FY 2013
Industrial Activities Operating profit
376
389
(13)
1,988
2,095
(107)
Financial Services Operating profit
147
115
32
554
514
40
Elimination & Other
(88)
(90)
2
(343)
(332)
(11)
Operating Profit
435
414
21
2,199
2,277
(78)
Restructuring expenses
(86)
(39)
(47)
(184)
(71)
(113)
Interest expenses of Industrial Activities, net of interest income and
eliminations (164)
(166)
2
(613)
(548)
(65)
Other, net
(59)
(62)
3
(313)
(284)
(29)
Income before income taxes and Equity in income of unconsolidated
subsidiaries and affiliates
126
147
(21)
1,089
1,374
(285)
Income taxes
(59)
(130)
71
(467)
(671)
204
Equity in income of unconsolidated subsidiaries and affiliates
20
37
(17)
86
125
(39)
Net Income
87
54
33
708
828
(120)
Net Income / (Loss) attributable to non-controlling interest
4
(6)
10
(2)
151
(153)
Net Income attributable to CNH Industrial N.V.
83
60
23
710
677
33
EPS (basic)
0.06
0.04
0.02
0.52
0.54
(0.02)
EPS (diluted)
0.06
0.04
0.02
0.52
0.54
(0.02)
Basic EPS before restructuring and other exceptional items
0.12
0.08
0.04
0.69
0.63
0.06
Q4 & FY 2014 Results Review
January 29
, 2015
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|
| 7
Q4 2014
Cash Flow –
Change in Net Industrial Debt
Q4 & FY 2014 Results Review
January 29
, 2015
th
87
173
(51)
(2,691)
(417)
(69)
2
63
(3,935)
1,456
SEP
30,
2014
NET
INCOME
D&A
CHANGE IN
FUNDS
&
OTHERS
CHANGE
IN
WC
CAPITAL
INCREASE,
DIVIDENDS
&
EQUITY
TRANSACTION
FX
TRANSLATION
EFFECTS
DEC
31,
2014
TANGIBLE &
INTANGIBLE
CAPEX
CHANGE
IN
NET
DEBT
NET
INDUSTRIAL
CASH
FLOW
($MN)
1,179
1,244
CHANGE IN
INVESTMENT,
SCOPE
&
OTHER |
|
|
| 8
FY 2014
Cash Flow –
Change in Net Industrial Debt
Note: all figures in $mn, except Delta vs. Target and FY 2014 Target in $bn
Q4 & FY 2014 Results Review
January 29
, 2015
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| 9
Q4 & FY 2014
Industrial Activities -
Capex breakdown
Q4 & FY 2014 Results Review
January 29
, 2015
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|
| 10
Q4 & FY 2014
Financial Services performance
Q4 & FY 2014 Results Review
Q4 2014 KEY HIGHLIGHTS
Net
income
was
$98mn,
down
$24mn
compared
to
Q4
2013
as
the
positive
impact
of
the
higher
average
portfolio
and
lower
provisions
for
credit
losses
was
more
than
offset
by
higher
income
taxes
Retail originations at $3bn, down $0.5bn compared to Q4 ’13
Managed
portfolio
*
at
$27.3bn
(of
which
retail
65%
and
wholesale
35%)
down
2.8%
compared
to
September
30,
2014.
Excluding
currency
impact,
managed
portfolio
decreased
$0.2bn
compared
to
September
30,
2014
•
Delinquencies on-book over 30 days were 3.5% down 1.3 p.p. vs. Q4 ’13
Q4 ’14 Profitability ratios:
•
Gross Margin / Average Assets On-Book = 3.9%
•
RoA
**
= 2.0%
(*) Including JVs
(**) RoA defined as: PBT / average managed assets annualized
Delta % Q4 ’14 vs. Q4 ‘13
Delta % FY ’14 vs. FY ‘13
January 29
, 2015
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| 11
Q4 2014
Liquidity
&
Debt
Maturity
(December
31
st
,
2014)
1
Represents cash portion of debt maturities as of 12/31/2014
2
Of which $1.0bn ABS related & Restricted Cash
Available liquidity at December 31, 2014 was $8.9bn, compared
to $7.9bn at September 30, 2014
•
$6.1bn
of
cash
2
•
$2.7bn undrawn under medium-term committed unsecured
credit lines
In
November
21
st
2014,
signed
a
€1.75bn
5-year committed
revolving credit facility, intended for general corporate
purposes
•
Facility replacing an existing 3-year €2bn facility due to
mature in February 2016
Cash generation from operating
activities
Bank debt reduction and
negative currency translation
differences
Q4 & FY 2014 Results Review
January 29
, 2015
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| 12
Industrial Activities Overview |
|
|
| 13
Q4 & FY 2014
Industrial Activities Net Sales (Growth Composition & Regional split)
Note: Net Sales: Including Other Activities, Unallocated Items & Adjustment
& Eliminations (US
GAAP,
$/mn)
Q4 & FY 2014 Results Review
(*) Quarterly average; December 31, 2014 end of year
January 29
, 2015
th
Q4 2014
FY 2014 |
|
|
| 14
Q4 2014
Net Sales Performance by Industrial Activities
Net Sales at $3.4bn down 17.8%
(down 14.2% in constant currency)
Pricing
Volumes
Product Mix
Net Sales at $800mn down 3.8% (down
0.5% in constant currency)
Net Sales at $3.4bn, down 5.5% (up
0.9% in constant currency)
Net Sales at $1.0bn, down 25.8%
(down 19.1% in constant currency)
Q4 & FY 2014 Results Review
Volume calendarization within the
year
NAFTA volumes
Weakness in LATAM, APAC
EMEA mix in trucks and APAC (buses)
LATAM volumes
Pricing
January 29
, 2015
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|
| 15
Q4 & FY 2014
Operating Profit Performance by Industrial Activities
Q4 & FY 2014 Results Review
2014 Operating Margin
2013 Operating Margin
January 29
, 2015
th |
|
|
| 16
Agricultural Equipment
Q4 & FY 2014
Q4 & FY 2014 Results Review
Full year operating margin resilience (margin at 11.6%), as a result of
company actions implemented
Positive price realization
Industrial flexibility exceeding negative absorption (achieved WCM
*
efficiencies of 6% for total AG manufacturing in FY 2014)
Efficiencies on structural costs (achieved a ~20% saving in SG&A in Q4
2014)
Operating Profit at $241mn, margin at 7.1%
Positive pricing across region
Unfavorable Volume and Mix
Cost efficiencies in SG&A and R&D
Negative FX effects
Q4 Actual
FY Actual
0-40 HP
+9%
+8%
40-140 HP
+7%
+9%
140+ HP
(37%)
(25%)
NAFTA
(1%)
+3%
EMEA
(14%)
(8%)
LATAM
(14%)
(15%)
APAC
(18%)
(8%)
Worldwide
(14%)
(7%)
Q4 Actual
FY Actual
NAFTA
(42%)
(25%)
EMEA
(9%)
(10%)
LATAM
(27%)
(24%)
APAC
(3%)
(9%)
Worldwide
(25%)
(18%)
Note: “WCM”
–
World Class Manufacturing
January 29
, 2015
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|
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| 17
Agricultural Equipment
Inventory
management
(units
of
equipment)
-
Main
industry
drivers
&
Looking
ahead
Q4 & FY 2014 Results Review
Structural fundamentals in AG remain strong beyond down-cycle.
Farmers’
productivity increases are pushing for product innovation
and demand for higher horsepower
Extension to mixed farming of mid/high horsepower equipment (new
and used) providing further support to demand
In-control level of used inventories coupled with completed
transition to tier 4 final engines supporting pricing differentials
between two product classes
AG brands well positioned to profit from a dynamic Dairy & Livestock
sector (D&L 2014 US Cash Receipts up 14% vs. Row Crop down 11% -
source USDA)
(*) Excluding Joint Ventures / Source: CNH Industrial Internal Data
(**) Source: IHS Global Insight; Commodity spot as per CME Group
January 29
, 2015
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| 18
Construction Equipment
Q4 & FY 2014
Q4 & FY 2014 Results Review
Strategic initiatives outlined in our 2014-2018 Strategic Business Plan
proceeding as planned
Brand
re-positioning:
dealer
consolidation
in
advanced
progress
with
major
countries
completed
Excavator
strategy:
agreement
executed;
product
development
and
adaptation
in
advanced
stage,
expected
production
launch
in
H2
2015
Efficiency
Program:
cost
reduction
activities
ahead
of
plan
Operating Profit at $9mn, margin at 1.1%
Positive Volumes / Mix in NAFTA
Efficiency Program and other cost savings
Q4 Actual
FY Actual
NAFTA
+17%
+12%
EMEA
+5%
+12%
LATAM
(22%)
(24%)
APAC
Flat
(1%)
Worldwide
+6%
+5%
Q4 Actual
FY Actual
NAFTA
+8%
+12%
EMEA
+5%
+11%
LATAM
(22%)
(13%)
APAC
(35%)
(19%)
Worldwide
(20%)
(9%)
January 29
, 2015
th
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 data for
Heavy Construction Equipment no longer includes Dumpers as CNH Industrial is no longer active in
this segment. The data for current and prior periods is updated to reflect this definition change
|
|
|
| 19
Construction Equipment
Inventory
management
(units
of
equipment)
-
Main
industry
drivers
&
Looking
ahead
Q4 & FY 2014 Results Review
Global GDP growth, supported by recent QE in Europe and solid
growth in the US
Continued growth in developing economies’
urbanization
Need for infrastructure improvements in developed economies and
expansion in other countries to support increased need in
transportation, basic utilities and telecom demand growth
CE brands well positioned as direct exposure to mining and oil&gas
sectors is limited
Inventory position matched to projected demand
Excavator manufacturing to begin in H2 2015
(*) Excluding Joint Ventures / Source: CNH Industrial Internal Data
(**) Source: IHS Global Insight; Commodity spot as per CME Group
January 29
, 2015
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| 20
Commercial Vehicles
Q4 & FY 2014
Q4 & FY 2014 Results Review
Q4 Actual
FY Actual
EMEA
*
(9%)
+1%
LATAM
*
(7%)
(16%)
APAC
*
(2%)
(3%)
Operating Profit at $100mn, margin at 3.0%
Positive pricing in EMEA
Efficiency Program
Lower volumes in LATAM and in EMEA
Buses (related to Euro VI transition)
EMEA negative absorption due to non-
repeat of Euro V pre-buy in Q4 2013
Q4 ‘14 Book to Bill at 0.9 up 0.1 vs. last year
Total orders at 33.1k units, down
2% vs. Q4 ’13
•
EMEA at 25.8k units, up 13%
•
Truck orders 22.4k up 14%
•
Bus orders 1.7K up 45%
•
LATAM at 4.6k units, down 43%
mainly Truck
•
APAC at 2.7k units, down 8% mainly
Truck
Total deliveries at 38.6k vehicles,
down 10% vs. Q4 ’13
•
Trucks volumes by segment:
•
Light at 19.8k down 2% mainly
driven by market conditions in
LATAM
•
Medium at 4.6k down 31% and
Heavy at 9k down 19%, mainly due
to Euro V pre-buy in Europe LY
January 29
, 2015
th
* Reflects aggregate for key markets where the Company competes: EMEA: 28 member countries
of the European Union, EFTA, Ukraine, Balkans, African continent, and Middle East (excluding Turkey); LATAM: Brazil,
Argentina and Venezuela; APAC: Russia, Turkey, South East Asia, Australia, New Zealand
|
|
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| 21
Commercial Vehicles
Inventory
management
(units
of
equipment)
-
Main
industry
drivers
&
Looking
ahead
Q4 & FY 2014 Results Review
Fourth
quarter
underproduction
vs.
retail
at
18%
(LATAM
underproduction
at
33%)
Dealer and Company inventory levels below Q4 2013
EUROPEAN
HISTORICAL
TRUCKS
MARKET
(>6T
–
MCV
&
HCV
ONLY
)
LOOKING
AHEAD
Only
7%
of
fleet
(>6t)
are
EURO
VI,
while
aged
trucks
running
on
a
higher operational TCO
EU freight indicators for 2015 are a positive support for a restart of
demand recovery
Pent-up demand potential in Southern European markets based
upon historical trend still unexploited
LATAM overaged fleet (more than twice than Europe) demanding
rejuvenation / replacement in the mid-term
CV brands product launches in Light (New Daily) and Euro VI Medium
and Heavy Trucks successfully completed
Mean = 316k
Q1’
15E
production
and
retail
aligned
Source: National Registrations Official Source
January 29
, 2015
th
COMMERCIAL
VEHICLES
(ALL
EQUIPMENT) |
|
|
| 22
Q4 & FY 2014 –
Powertrain
Net Sales split by product & Units Sold (% change y-o-y)
ENGINES
GEARBOXES
AXLES
Units Sold
Q4 ‘14 vs. Q4 ‘13
FY 2014 third party Net sales at 41% vs. 34% in FY 2013
FY
2014
KEY
HIGHLIGHTS
Q4 & FY 2014 Results Review
FY
2014
NET
SALES
BY
PRODUCT
($)
-16%
-7%
-18%
Units sold by business line
•
Engines up 7% to 584k units (CV 24%, AG 24%, CE 5% and
47% to external customers); third party sales at 274k units
up
25%
vs.
last
year
•
Gearboxes up 3% to 64k units
•
Axles flat at 157k units
Units Sold
FY ‘14 vs. FY ‘13
+7%
+3%
Flat
January 29
, 2015
th |
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| 23
FY 2015E US GAAP Financial Targets |
|
|
| 24
FY 2015E
Agricultural
Equipment
Commercial
Vehicles
Construction
Equipment
COMBINES
HEAVY
LIGHT
INDUSTRY
(>3.5T)
Prior Outlook
New Outlook
0-40 HP
Flat
Flat
40-140 HP
Flat
Flat
140+ HP
(10)% to (15)%
(15%) to (20%)
NAFTA
Flat
Flat to (5%)
EMEA
(5)% to Flat
Flat to (5%)
LATAM
(5)% to (10)%
(10%) to (15%)
APAC
Flat to 5%
Flat to 5%
Worldwide
Flat
Flat
Prior Outlook
New Outlook
NAFTA
(10)% to (15)%
(25%) to (30%)
EMEA
(5)% to (10)%
(5%) to (10%)
LATAM
(10)% to (15)%
(15%) to (20%)
APAC
(5)% to (10)%
(10%) to (15%)
Worldwide
(10)% to (15)%
(15%) to (20%)
Prior Outlook
New Outlook
NAFTA
5% to 10%
Flat to 5%
EMEA
Flat to 5%
Flat to 5%
LATAM
Flat
Flat to (5%)
APAC
Flat to 5%
Flat to 5%
Worldwide
Flat to 5%
Flat to 5%
TRACTORS
Industry Units –
Prior
*
vs. New Outlook
Q4 & FY 2014 Results Review
Prior Outlook
New Outlook
NAFTA
5% to 10%
Flat to 5%
EMEA
Flat
Flat to 5%
LATAM
(10)% to (12)%
(10%) to (15%)
APAC
Flat
Flat to (5%)
Worldwide
Flat
Flat
Prior Outlook
New Outlook
EMEA 1
Flat
Flat to 5%
LATAM 1
Flat
Flat to (5)%
APAC 1
Flat
(5)% to (10)%
*
Forecast
provided
on
October
30
th
,
2014
1
Reflects aggregate for key markets where Group competes
January 29
, 2015
th |
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|
| 25
FY 2015E US GAAP Financial Targets
Q4 & FY 2014 Results Review
Company Guidance for 2015 is therefore as follows:
•
Net sales of Industrial Activities of approximately $28bn
•
Operating margin of Industrial Activities between 6.1% and 6.4%
•
Net industrial debt at the end of 2015 between $2.2bn and $2.4bn, with the expected cash
generation during the year resulting primarily from the inventory reduction in the
Agricultural Equipment segment The Company expects improved profitability in Commercial
Vehicles and Construction Equipment, coupled with structural cost improvement measures
from the Company’s Efficiency Program now extended to Agricultural Equipment. These
actions are expected to buffer, but not fully offset the negative impact from the
continuation of challenging trading conditions in the row crop sector of the
agricultural industry, and the impact of the recent significant appreciation of the US
dollar against the Company’s other trading currencies, allowing the Company to hold operating margin unless there are
further currency deterioration from the current rate levels outside the United States
January 29
, 2015
th |
|
|
| 27
Q4 2014
Results
highlights
(IFRS
$
&
US
GAAP
$)
–
delta
with
previous
year
REVENUES
Trading Profit
Operating Profit
MARGIN
(IFRS)
(US GAAP)
(IFRS)
(US GAAP)
(IFRS)
(US GAAP)
Agricultural Equipment
3,403
(739)
3,403
(739)
238
(93)
241
(71)
7.0%
7.1%
Construction Equipment
800
(32)
800
(32)
2
55
9
62
0.3%
1.1%
Commercial Vehicles
3,412
(189)
3,354
(197)
113
(22)
100
2
3.3%
3.0%
Powertrain
991
(342)
988
(343)
73
(22)
66
(3)
7.4%
6.7%
Other Activities, Unallocated Items, Elim. & Other
(527)
333
(527)
333
(47)
(12)
(40)
(3)
Industrial Activities
8,079
(969)
8,018
(978)
379
(94)
376
(13)
4.7%
4.7%
Financial Services
545
22
465
33
139
15
147
32
25.5%
31.6%
Eliminations
(136)
20
(118)
20
-
-
(88)
2
Group
8,488
(927)
8,365
(925)
518
(79)
435
21
6.1%
5.2%
NET PROFIT / (LOSS)
EPS (Basic)
(IFRS)
(US GAAP)
(IFRS)
(US
GAAP)
Attributable to CNH Industrial N.V.
128
(109)
83
23
0.10
(0.07)
0.06
0.02
Attributable to non-controlling interest
5
8
4
10
Group
133
(101)
87
33
Q4 & FY 2014 Results Review
January 29
, 2015
th
($MN)
($MN) |
|
|
| 28
FY 2014
Results
highlights
(IFRS
$
&
US
GAAP
$)
–
delta
with
previous
year
REVENUES
Trading Profit
Operating Profit
MARGIN
(IFRS)
(US GAAP)
(IFRS)
(US GAAP)
(IFRS)
(US GAAP)
Agricultural Equipment
15,204
(1,55)
15,204
(1,559)
1,689
(260)
1,770
(238)
11.1%
11.6%
Construction Equipment
3,346
88
3,346
88
66
175
79
176
2.0%
2.4%
Commercial Vehicles
11,087
(360)
10,888
(390)
2
(143)
29
(45)
0.0%
0.3%
Powertrain
4,475
52
4,464
52
220
10
223
36
4.9%
5.0%
Other Activities, Unallocated Items, Elim. & Other
(2,704)
346
(2,704)
346
(110)
(34)
(113)
(36)
Industrial Activities
31,408
(1,43)
31,198
(1,463)
1,867
(252)
1,988
(107)
5.9%
6.4%
Financial Services
2,086
136
1,828
149
532
14
554
40
25.5%
30.3%
Eliminations
(537)
23
(471)
33
-
-
(343)
(11)
Group
32,957
(1,27)
32,555
(1,281)
2,399
(238)
2,199
(78)
7.3%
6.8%
NET PROFIT / (LOSS)
EPS (Basic)
(IFRS)
(US GAAP)
(IFRS)
(US GAAP)
Attributable to CNH Industrial N.V.
917
(131)
710
33
0.68
(0.15)
0.52
(0.02)
Attributable to non-controlling interest
(1)
(171)
(2)
(153)
Group
916
(302)
708
(120)
Q4 & FY 2014 Results Review
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Q4 & FY 2014
Efficiency Program –
update
Main efficiency actions and restructuring charges in Q4:
AG:
$15mn
mainly
due
to
cost
reduction
activities
as
a
result of negative demand conditions
CE: $5mn mainly due to European network initiatives
CV:
$66mn
mainly
due
to
actions
to
reduce
SG&A
expenses and business support costs, and costs related
to the completion of manufacturing product
specialization programs
Q4 2014
FY 2014
Total charges
$86mn
$184mn
Agricultural Equipment
$15mn
$43mn
Construction Equipment
$5mn
$39mn
Commercial Vehicles
$66mn
$102mn
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Q4 & FY 2014
Net Income / (Loss) to Net Income and basic EPS before Restructuring and Exceptional Items (US GAAP) Fourth Quarter
December YTD
2014
2013
2014
2013
Net Income
87
54
708
828
Restructuring expenses, net of tax
80
37
168
68
Other exceptional items, net of tax
-
26
64
51
Net Income before restructuring and other exceptional items
167
117
940
947
Net Income before restructuring and other exceptional items
attributable to CNH Industrial N.V.
162
122
930
795
Weighted average shares outstanding
1,355
1,350
1,354
1,255
Basic EPS before restructuring and exceptional items
0.12
0.08
0.69
0.63
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Q4 & FY 2014
Operating
Profit
US
GAAP
to
Trading
Profit
IFRS
-
Reconciliation
The following reconciles Industrial Operating Profit (US GAAP) to Industrial Trading
Profit under IFRS: Fourth Quarter
December YTD
2014
% of
Net Sales
2013
% of
Net Sales
2014
% of
Net Sales
2013
% of
Net Sales
US GAAP -
Industrial Operating Profit
376
4.7%
389
4.3%
1,988
6.4%
2,095
6.4%
Development costs, net
63
203
244
443
Reclassification of Interest compensation
(92)
(96)
(357)
(352)
Other Adjustments & Reclassifications, net
32
(23)
(8)
(67)
Total Adjustments & Reclassifications
3
84
(121)
24
IFRS -
Industrial Trading Profit
379
4.7%
473
5.2%
1,867
5.9%
2,119
6.5%
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Q4 & FY 2014
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:
Q4 & FY 2014 Results Review
Fourth Quarter
December YTD
2014
EPS
2013
EPS
2014
EPS
2013
EPS
Net Income attributable to CNH Industrial N.V.
83
0.06
60
0.04
710
0.52
677
0.54
Plus: Net Income / (Loss) attributable to non-controlling interest
4
(6)
(2)
151
Net Income in accordance with US GAAP
87
54
708
828
Development costs, net
50
203
231
443
Others, net
62
25
76
60
Taxes
(66)
(48)
(99)
(113)
Total adjustment
46
180
208
390
Profit/(loss) in accordance with IFRS
133
234
916
1,218
Less: Profit/(Loss) attributable to non-controlling interest
5
(3)
(1)
170
Profit/(Loss) attributable to CNH Industrial N.V.
128
0.10
237
0.17
917
0.68
1,048
0.83
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FY 2014
Total Equity –
US GAAP to IFRS Reconciliation
Q4 & FY 2014 Results Review
Dec. 31, 2014
Dec. 31, 2013
Total Equity in accordance with US GAAP
4,961
4,955
(a) Development costs, net
2,819
2,862
(b) Goodwill and other intangible assets
(122)
(130)
(c) Defined benefit plans
(6)
(29)
(d) Restructuring provision
(12)
(6)
(e) Other adjustments
(16)
(15)
(f) Tax impact on adjustments
(815)
(773)
(g) Deferred tax assets and tax contingencies recognition
768
798
Total adjustment
2,616
2,707
Total Equity in accordance with IFRS
7,577
7,662
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Q4 & FY 2014
Cash Flow –
Change in Net Industrial Debt (US GAAP)
(US$/mn)
Q4 2014
FY 2014
Net Debt of Industrial Activities at the beginning of period
(3,935)
(2,214)
Net income
87
708
Amortization and depreciation (*)
173
725
Changes in provisions and similar, and items related to assets sold under buy-back
commitments, and assets under operating lease
(51)
(87)
Change in working capital
1,456
(1,025)
Investments in property, plant and equipment, and intangible assets (*)
(417)
(1,005)
Other changes
(69)
8
Net Industrial cash flow
1,179
(676)
Capital increases, dividends
2
(364)
Currency translation differences
63
563
Change in Net debt of Industrial Activities
(1,244)
(477)
Net Debt of Industrial Activities at the end of period
(2,691)
(2,691)
(*) Excluding assets sold under buy-back commitments and assets under operating
lease Q4 & FY 2014 Results Review
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Q4 2014
Gross Debt -
Breakdown
Industrial
Financial Services
Industrial
Financial Services
11.3
5.7
Cash Portion of Debt Maturities
10.2
5.9
4.5
2.0
Bank Debt
3.5
2.1
6.7
3.6
Capital Market
6.5
3.5
0.2
0.1
Other Debt
0.2
0.2
0.0
13.8
Securitization and Sale of Receivables (on book)
0.0
13.6
0.0
10.7
ABS / Securitization
0.0
10.5
0.0
1.2
Warehouse Facilities
0.0
1.2
0.0
1.8
Sale of Receivables
0.0
1.9
0.0
0.0
Adjust. for Hedge Accounting on Fin. Payables
0.0
0.0
(3.6)
3.6
Intersegment Net Financial Payables /
(Receivables)
(3.3)
3.3
7.7
23.1
Gross Debt
6.8
22.7
(3.8)
(1.7)
Cash & Mkt Securities
(4.1)
(2.0)
(0.0)
(0.0)
Derivatives Fair Value
(0.0)
(0.0)
3.9
21.4
Net Debt
2.7
20.7
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DECEMBER 31, 2014 |
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Q4 2014
Debt Maturity Schedule -
Breakdown
Outstanding
December 31, 2014
2015
2016
2017
2018
2019
Beyond
5.6
Bank Debt
2.3
1.2
0.7
0.5
0.8
0.2
10.1
Capital Market
2.4
0.9
2.0
2.1
1.8
0.8
0.4
Other Debt
0.2
0.0
0.0
0.0
0.0
0.1
16.0
Cash Portion of Debt Maturities
4.9
2.1
2.8
2.6
2.6
1.1
(6.1)
Cash & Marketable Securities
(1.0)
of which ABS related
(2.7)
Undrawn committed credit lines
(8.9)
Total Available Liquidity
Note: Numbers may not add due to rounding
Q4 & FY 2014 Results Review
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Q4 2014
Main Product Launches across Segments & Awards
Magnum 380 CVX wins Tractor of the Year Award
at 2015 TOTY awards in Bologna, Italy
Launch of the new Axial-Flow 4000 Series
combines at the China International Agricultural
Machinery Exhibition (CIAME 2014)
Completed acquisition of Miller-St.
Nazianz, Inc.
Launch of the new CR10.90 combine
harvester in Australia
NHC Latin America received 2014 Top Engineering
Award in the category Machines/Vehicles –
Excavators/Tractors
LM1745 and LM1445 telehandlers used at
Interlagos F1 Grand Prix, Brazil
•
FPT’s Euro VI engines will power the sweepers of the
one of European largest manufacturers (Ravo)
•
FPT ‘s F1C CNG engine powers Asja’s new range of
TOTEM micro co-generators
Tier 4 Final TR310 Alpha Series compact track
loader in North America
Best Seller Award from Equipment India for
locally-manufactured compactors
Q4 & FY 2014 Results Review
•
First 8-Speed Automatic gearbox on
the market
•
Eco-Power mode for Outstanding
Fuel Economy
•
10% lower M&R cost vs. manual
•
Best performance, 205Hp and 470
Nm torque
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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, and the Caribbean Islands
APAC: Continental Asia (including Turkey and Russia), Oceania and member countries of the
Commonwealth of Independent States (excluding Ukraine) EMEA: 28
member
countries
of
the
European
Union, European Free Trade Association, Ukraine, Balkans, African continent, and Middle East
(excluding Turkey) Market Share / Market Position Data
Certain
industry
and
market
share
information
in
this
report
has
been
presented
on
a
worldwide
basis
which
includes
all
countries.
In
this
report,
management
estimates
of
market
share
information
are
generally
based
on
retail
unit
data
in
North
America,
on
registrations
of
equipment
in
most
of
Europe,
Brazil,
and
various
APAC
markets,
and
on
retail
and
shipment
unit
data
collected
by
a
central
information
bureau
appointed
by
equipment
manufacturers
associations,
including
the
Association
of
Equipment
Manufacturers’
in
North
America,
the
Committee
for
European
Construction
Equipment
in
Europe,
the
ANFAVEA
in
Brazil,
the
Japan
Construction
Equipment
Manufacturers
Association,
and
the
Korea
Construction
Equipment
Manufacturers
Association,
as
well
as
on
other
shipment
data
collected
by
an
independent
service
bureau.
Not
all
agricultural
or
construction
equipment
is
registered,
and
registration
data
may
thus
underestimate,
perhaps
substantially,
actual
retail
industry
unit
sales
demand,
particularly
for
local
manufacturers
in
China,
Southeast
Asia,
Eastern
Europe,
Russia,
Turkey,
Brazil,
and
any
country
where
local
shipments
are
not
reported.
For
Commercial
Vehicles
regions
are
defined
for
both
market
share
and
TIV
as:
Europe
(27
countries
reflecting
key
market
where
the
segment
competes);
LATAM
(Brazil,
Argentina
and
Venezuela)
and
APAC
(Russia,
Turkey,
South
East
Asia,
Australia,
New
Zealand)
In
addition,
there
may
also
be
a
period
of
time
between
the
shipment,
delivery,
sale
and/or
registration
of
a
unit,
which
must
be
estimated,
in
making
any
adjustments
to
the
shipment,
delivery,
sale,
or
registration
data
to
determine
our
estimates
of
retail
unit
data
in
any
period
Q4 & FY 2014 Results Review
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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 results and enhance the reader’s ability to assess CNH
Industrial’s financial performance and financial position. They provide measures which facilitate management’s ability
to identify operational trends, as well as make decisions regarding future spending, resource
allocations and other operational decisions. These and similar measures are widely used in the industries
in
which
the
Company
operates.
These
financialmeasures
may
not
be
comparable
to
other
similarly
titled
measures
of
other
companies
and
are
not
intendedto
be
substitutes
formeasures
of
financial performance and financial position as prepared in accordance with US GAAP and/or
IFRS. CNH Industrial non-GAAP financial measures are defined as follows:
Operating Profit under US GAAP
Operating Profit of Industrial Activities is defined as net sales less cost of goods sold,
selling, general and administrative expenses and research and development expenses. Operating Profit of
Financial
Services
is
defined
as
revenues,
less
selling,
general
and
administrative
expenses,
interestexpenses
and
certain
other
operating
expenses.
Trading Profit under IFRS
Trading
Profit
is
derived
from
financial
information
prepared
in
accordance
with
IFRSand
is
defined
as
income
before
restructuring,
gains/(losses)
on
disposal
of
investments
and
other
unusual
items, interest expense of Industrial Activities, income taxes, equity in income (loss) of
unconsolidated subsidiaries and affiliates, non-controlling interests. Net
income (loss) before restructuring and exceptional items Net income (loss) before
restructuring and exceptional items is Net income (loss), less restructuring charges and exceptional items, after tax
Net Debt and Net Debt of Industrial Activities (or Net Industrial Debt)
CNH
Industrial
provides
the
reconciliation
of
Net
Debt
to
Total
Debt,
which
is
the
most
directly
comparable
measure
included
in
the
consolidated
balance
sheets.
Due
to
different
sources
of
cash
flows
used
for
the
repayment
of
the
debt
between
Industrial
Activities
and
Financial
Services
(by
cash
from
operations
for
Industrial
Activities
and
by
collection
of
financing
receivables
for
Financial
Services),
management
separately
evaluates
the
cash
flow
performance
of
Industrial
Activities
using
Net
Debt
of
Industrial
Activities.
Working Capital
Working capital is defined as trade receivables and financing receivables related to sales,
net, plus inventories, less trade payables, plus other assets (liabilities), net
Constant Currency Basis
CNH
Industrial
discusses
the
fluctuations
in
revenues
and
certain
non-GAAP
financial
measures
ona
constant
currency
basis
byapplying
the
prior
yearexchange
ratesto
current
year’s
values
expressed
in
local
currencyin
order
to
eliminate
the
impact
of
foreign
exchange
rate
fluctuations.
Q4 & FY 2014 Results Review
January 29
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| 40
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
and
annual
financial
results
both
under
U.S.
GAAP
for
SEC
reporting
purposes
and
under
IFRS
for
European
listing
purposes
and
Dutch
law
requirements.
Financial
statements
under
both
sets
of
accounting
principles
use
U.S.
dollar
as
the
reporting
currency.
In
addition,
as
disclosed
in
the
Form
20-F,
CNH
Industrial
has
expanded
its
reportable
segments
from
three
(Agricultural
and
Construction
Equipment
inclusive
of
its
financial
services
activities,
Trucks
and
Commercial
Vehicles
inclusive
of
its
financial
services
activities,
and
Powertrain)
to
five
(Agricultural
Equipment,
Construction
Equipment,
Commercial
Vehicles,
Powertrain
and
Financial
Services).
The
tables
and
comments
on
the
financial
results
of
the
Company
and
by
segments
are
prepared
in
accordance
with
U.S.
GAAP.
Financial
results
under
IFRS
are
shown
in
the
Appendix
section
of
the
presentation.
Prior
period
results
under
IFRS,
prepared
in
euro,
have
been
consistently
recast
into
U.S.
dollars.
A
summary
outlining
the
Company’s
transition
to
U.S.
GAAP
and
U.S.
dollar
as
the
reporting
currency
is
available
on
the
Company’s
website,
www.cnhindustrial.com
Q4 & FY 2014 Results Review
January 29
, 2015
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|
| Investor
Relations Team Federico Donati –
Head of Investor
Relations
+39 (011) 00 -
62756
Noah Weiss –
Investor Relations North America
+1 (630) 887 -
3745
e-mail:
investor.relations@cnhind.com
website:
www.cnhindustrial.com
41
Contacts
Q4 & FY 2014 Results Review
January 29
, 2015
th |
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