Summary of CNH Industrial 2025 Capital Markets Day Company Overview - **Company**: CNH Industrial (CNH) - **Industry**: Agricultural and Construction Equipment - **History**: Over 180 years of innovation and engineering excellence, with a significant presence in North America, generating 40% of agricultural net sales [1][2][8] Key Financials - **Annual Revenues**: Ranged between $15 billion and $25 billion over the past five years [2] - **Employee Count**: Over 36,000 employees globally [2] - **Cost Savings**: Achieved run rate savings of more than $550 million from cost of goods sold by the end of 2024 [12] Strategic Focus and Innovations - **Technological Enhancements**: Acquisition of Raven in 2021 enhanced technological capabilities and innovation efforts [6] - **Product Portfolio**: Comprehensive agricultural machinery distribution network, offering a full line of products from tractors to crop protection equipment [21][25] - **Precision Technology**: Doubling precision tech contribution to agricultural net sales to 10% by 2030, with significant advancements in AI and automation [27][90] Strategic Pillars 1. **Product Leadership**: Commitment to expanding product offerings and integrating precision technology [23] 2. **Margin Improvement**: Targeting a mid-cycle adjusted EBIT margin of 16% to 17% in agriculture by 2030 [39][43] 3. **Shareholder Value**: Focused on returning substantial industrial free cash flow to shareholders while exploring M&A opportunities [24] Market Dynamics - **Cyclical Nature**: The agriculture market is influenced by commodity prices, weather patterns, and government policies, with expectations of a market bottoming at 85% to 90% of the ten-year average [34][36] - **Historical Margin Performance**: Improved mid-cycle margins from 10% in 2021 to a target of 16% to 17% by 2030 [41] Operational Changes - **Organizational Restructuring**: Delayered organization to enhance responsiveness to market conditions and improve P&L ownership at the regional level [18] - **Quality Commitment**: A holistic approach to quality across product development, manufacturing, and supply chain, aiming to reduce costs of non-quality by 200 to 250 basis points by 2030 [32] Product Innovations - **New Product Launches**: Plans for over 15 new tractor launches, 10 combine launches, and 19 crop production launches by 2027 [63] - **Smart Technology**: Introduction of smart spraying solutions that can reduce herbicide use by up to 80% [90] Dealer Network Strategy - **Strengthening Partnerships**: Investing in dealer capabilities and enhancing service offerings to ensure customer satisfaction and loyalty [98][100] - **Regional Tailoring**: Adapting the dealer network strategy to meet unique market demands, balancing single and multi-brand models [104] Conclusion - **Future Outlook**: CNH Industrial is committed to innovation, operational excellence, and strategic growth, positioning itself as a leader in the agricultural and construction equipment industry [44][45]

Core Insights - CNH Industrial is hosting its Investor Day 2025 at the New York Stock Exchange, focusing on strategic direction, innovation, sustainability, and productivity [1][3][7] - The event features presentations from key executives covering various aspects of the company, including agriculture products, precision technology, and financial performance [1][7] Company Overview - CNH Industrial is a global leader in equipment, technology, and services, with a mission centered on innovation and sustainability [3][4] - The company operates under several brands, including Case IH, New Holland, CASE, and others, providing a comprehensive range of agricultural and construction products [3][4] Event Details - The Investor Day presentations will begin at 9:00 am ET, with a full agenda including opening remarks, product overviews, and a Q&A session [1][7] - A recording of the event will be available shortly after its conclusion [2]

Financial Performance - Total revenues for the three months ended March 31, 2025, were $3,828 million, a decrease of 20.5% compared to $4,818 million in the same period of 2024[12]. - Net income attributable to CNH Industrial N.V. for Q1 2025 was $131 million, down 64.4% from $368 million in Q1 2024[12]. - The company incurred a net loss of $132 million for Q1 2025, compared to a net income of $369 million in Q1 2024, representing a decline of 135.7%[12]. - Comprehensive income attributable to CNH Industrial N.V. was $188 million for Q1 2025, down 41.0% from $319 million in Q1 2024[15]. - The company reported a basic earnings per share of $0.10 for Q1 2025, down from $0.29 in Q1 2024, a decrease of 65.5%[12]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $1,695 million as of March 31, 2025, from $3,191 million at December 31, 2024, representing a decline of 46.9%[10]. - The company reported a net cash used by operating activities of $162 million for Q1 2025, compared to a net cash used of $894 million in Q1 2024[18]. - The company’s debt stood at $26,010 million as of March 31, 2025, down from $26,882 million at the end of 2024, a decrease of 3.2%[10]. Assets and Liabilities - Total assets decreased to $42,057 million as of March 31, 2025, from $42,933 million at December 31, 2024, a reduction of 2.0%[10]. - Total liabilities decreased to $34,098 million as of March 31, 2025, down from $35,165 million at December 31, 2024, a decrease of 3.0%[10]. - The company’s total equity increased to $7,902 million as of March 31, 2025, from $7,713 million at December 31, 2024, an increase of 2.5%[10]. Revenue Breakdown by Segment - Agriculture segment revenues decreased to $2,581 million in Q1 2025 from $3,373 million in Q1 2024, representing a decline of 23.5%[30]. - Construction segment revenues fell to $591 million in Q1 2025, down 22.0% from $758 million in Q1 2024[30]. - Financial Services revenues decreased to $651 million in Q1 2025 from $685 million in Q1 2024, a decline of 5.0%[30]. Research and Development - Research and development expenses for Q1 2025 were $184 million, a decrease of 19.3% compared to $228 million in Q1 2024[12]. - Research and development expenses for the Agriculture segment were $163 million in Q1 2025, while the Construction segment incurred $21 million[51]. Inventory and Receivables - Total inventory rose to $5,156 million as of March 31, 2025, up from $4,776 million at the end of 2024, suggesting increased stock levels[58]. - Financing receivables decreased from $10,831 million on December 31, 2024, to $10,207 million on March 31, 2025[35]. - The total past due receivables in North America for 2025 were $1,182 million, showing a significant decrease from $3,815 million in 2024[70]. Tax and Regulatory Impact - The effective tax rate increased from 19.2% in Q1 2024 to 29.0% in Q1 2025, attributed to the company's income mix and reduced rate relief from Argentina's economy[39]. - The company does not expect the OECD's proposed global minimum tax of 15% to have a material impact on its financial results during 2025[40]. Derivatives and Financial Instruments - The total notional amount of CNH's foreign exchange derivatives was $4.7 billion as of March 31, 2025, compared to $4.2 billion at December 31, 2024[113]. - CNH's interest rate derivatives totaled approximately $9.0 billion as of March 31, 2025, down from $9.1 billion at December 31, 2024[117]. - The fair value of CNH's derivative assets was $124 million on March 31, 2025, compared to $147 million on December 31, 2024[120]. Related Party Transactions - Net revenues from transactions with Iveco Group for Q1 2025 were $27 million, down from $38 million in Q1 2024[136]. - Purchases from Iveco Group in Q1 2025 totaled $147 million, compared to $211 million in Q1 2024[136]. - Related party net sales for Q1 2025 were $76 million, a decrease from $158 million in Q1 2024[138].

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2025 were down 21% at $3.8 billion, with industrial adjusted EBIT down 73% to $101 million, and EPS for the quarter was $0.10 [12][20][23] - Free cash flow for industrial activities was a $567 million outflow, which is an improvement compared to Q1 2024 due to better management of finished goods and component inventories [20][23] - Gross margin for agriculture was 20%, down 380 basis points year over year, primarily due to lower production volumes and unfavorable mix [20][21] Business Line Data and Key Metrics Changes - Agriculture net sales decreased 23% in Q1 2025, driven by lower shipments across all regions due to weak industry demand and dealer destocking [20][22] - Construction net sales for Q1 were $591 million, down 22% year over year, primarily due to lower shipment volumes in North America [22] - Financial Services segment reported net income of $90 million, with a year-over-year decrease mainly due to higher expected risk costs and taxes [23][24] Market Data and Key Metrics Changes - Retail demand was slow, with production hours down 26% compared to Q1 2024, with agriculture down 27% and construction down 19% [13] - The Turkish market showed continued softness, impacting joint venture results in the Other category [22] - Delinquencies increased, particularly in South America and North America, aligning with expectations during a downturn [25] Company Strategy and Development Direction - The company is focused on operational excellence, advancing technologies, and executing cost-saving initiatives while preparing for a new model year lineup [11][12] - A modest price adjustment was implemented in North America for new orders, with the aim to share tariff cost impacts with suppliers [15][63] - The company is committed to maintaining a balanced global exposure and is actively engaged in scenario planning regarding tariffs and trade impacts [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current market headwinds and the necessity of keeping production low to navigate the downturn effectively [12][17] - The company expects a gradual recovery in the second half of the year, with a return to double-digit profitability in agriculture [68] - There is cautious optimism regarding the potential for a rebound in demand, particularly in Brazil, contingent on global trade developments [88] Other Important Information - The CFO announced his departure effective May 6, with Jim Nicholas set to succeed him [5][6] - The company is preparing for an Investor Day to provide more insights into its product roadmap and strategic initiatives [11][45] Q&A Session Summary Question: Can you quantify the EPS headwind from tariffs? - Management indicated that all changes in guidance are due to tariff scenarios, with a midpoint estimate provided for potential impacts [51][53] Question: What is the outlook for production costs in the Ag business? - Management confirmed that production costs were down, with expectations for improved quality and reduced warranty spend in the coming quarters [55][57] Question: Can you elaborate on price adjustments and procurement efforts? - Price adjustments were implemented to balance cost increases, and discussions with suppliers are ongoing to share tariff-related costs [63][65] Question: How should we think about Ag segment margins as the year progresses? - The first quarter is typically low, with expectations for improved margins in the second half of the year [68] Question: What is the current state of dealer inventories? - The company reported a $100 million reduction in dealer inventories, with plans to continue monitoring and adjusting production levels [85][86]

Financial Performance - First quarter consolidated revenues were $3.83 billion, down 21% compared to Q1 2024[1] - Net income for Q1 2025 was $132 million, a decrease of 64% from $369 million in Q1 2024[1] - Diluted earnings per share (EPS) for Q1 2025 was $0.10, down from $0.29 in Q1 2024[1] - Total revenues for Q1 2025 were $3,828 million, a decrease of 20.5% compared to $4,818 million in Q1 2024[34] - Net income attributable to CNH Industrial N.V. for Q1 2025 was $131 million, down 64.4% from $368 million in Q1 2024[34] - Adjusted diluted EPS for Q1 2025 was $0.10, compared to $0.29 in Q1 2024, reflecting a decline of 65.5%[34] - The company reported a net income of $132 million for Q1 2025, compared to $369 million in Q1 2024, reflecting a decline of 64%[40] - Adjusted net income for Q1 2025 was $132 million, down from $369 million in Q1 2024, with adjusted diluted EPS decreasing to $0.10 from $0.30[57] Segment Performance - Net sales of Industrial Activities were $3.17 billion, down 23% year-over-year[4] - Agriculture segment net sales decreased by 23% to $2.58 billion, primarily due to lower shipment volumes[8] - Construction segment net sales decreased by 22% to $591 million, driven by lower shipment volumes[11] - Adjusted EBIT of Industrial Activities decreased to $101 million, a 73% decline from $372 million in Q1 2024[4] - The Agriculture segment reported an EBIT of $139 million in Q1 2025, compared to $388 million in Q1 2024, reflecting a decline of 64%[51] Cash Flow and Liquidity - Cash and cash equivalents decreased to $1,695 million as of March 31, 2025, from $3,191 million at the end of 2024[36] - Net cash provided by operating activities for Q1 2025 was $162 million, a significant improvement from a net cash used of $894 million in Q1 2024[38] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $1,468 million for Q1 2025[38] - Total cash and cash equivalents at the end of Q1 2025 were $2,398 million, down from $3,959 million at the end of Q1 2024, a decrease of 39%[47] - Free cash flow for Industrial Activities in Q1 2025 was $(567) million, an improvement from $(1,209) million in Q1 2024[56] Assets and Liabilities - Total assets as of March 31, 2025, were $42,057 million, down from $42,933 million at the end of 2024[36] - Total liabilities decreased to $34,098 million as of March 31, 2025, compared to $35,165 million at the end of 2024[36] - The company’s debt stood at $26,010 million as of March 31, 2025, down from $26,882 million at the end of 2024, a reduction of 3%[44] - The company reported a net cash (debt) position of $(23,526) million as of March 31, 2025, compared to $(22,947) million as of December 31, 2024[54] Forecast and Guidance - The company forecasts lower global industry retail sales in both agriculture and construction equipment markets for 2025[15] - Adjusted diluted EPS guidance for 2025 is between $0.50 to $0.70, revised from $0.65 to $0.75 previously[20] Restructuring and Expenses - The company reported a restructuring expense of $6 million in Q1 2025, significantly lower than the $31 million reported in Q1 2024[40] - Research and development expenses decreased to $184 million in Q1 2025 from $228 million in Q1 2024, a reduction of approximately 19%[40] - Restructuring expenses amounted to $6 million in Q1 2025, down from $30 million in Q1 2024, indicating a reduction in restructuring costs[52] Financial Services - Financial Services revenues decreased by 5% to $651 million, with net income down 24% to $90 million[12] - The company’s financial services segment reported a net income of $90 million in Q1 2025, down from $118 million in Q1 2024, a decrease of 24%[52]

Financial Performance - CNH Industrial reported consolidated revenues of $3.83 billion for Q1 2025, a decrease of 21% compared to Q1 2024 [1][5] - Net income for the quarter was $132 million, down 64% from $369 million in the same period last year [1][6] - Diluted earnings per share (EPS) were $0.10, compared to $0.29 in Q1 2024, reflecting a decline of $0.19 [1][5] Segment Performance - Net sales of Industrial Activities were $3.17 billion, down 23% year-over-year, primarily due to lower shipments and dealer destocking [1][5][10] - In the Agriculture segment, net sales decreased by 23% to $2.58 billion, with a gross profit margin of 20.0%, down from 23.8% [8][10][11] - The Construction segment saw net sales decline by 22% to $591 million, with an adjusted EBIT margin of 2.4%, down from 6.7% [12][13] Cash Flow and Financial Health - Cash flow provided by operating activities was $162 million, a significant improvement from a cash outflow of $894 million in Q1 2024 [1][7] - Industrial free cash flow absorption was $567 million, showing a year-over-year improvement of $642 million [1][7] - Cash and cash equivalents decreased to $1.70 billion from $3.19 billion at the end of Q1 2024 [5][37] Market Outlook - The company anticipates lower global industry retail sales in both agriculture and construction equipment markets for 2025 compared to 2024 [17][18] - CNH is focused on reducing excess channel inventory by producing fewer units than retail demand levels, which will lead to lower net sales in 2025 [17][18] - The ongoing macroeconomic uncertainties and potential global trade scenarios, including tariffs, may impact the company's forecasts for the year [19][20]

Core Viewpoint - CNH announces the transition of its Chief Financial Officer from Oddone Incisa to Jim Nickolas, effective May 6, 2025, as part of its strategic business planning and growth ambitions [1][3][4] Group 1: Leadership Transition - Oddone Incisa will step down after a 28-year career with CNH and the former Fiat Group, having held various senior roles in Finance and Commercial Lending [3] - Jim Nickolas, with over 30 years of experience in corporate finance and M&A, will take over as CFO and will present the financial portion of the Company's Strategic Business Plan at the Investor Day on May 8, 2025 [1][2] Group 2: Company Background - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [4] - The company operates under various brands, including Case IH, New Holland, and Raven, providing a wide range of agricultural and construction products [4][5] - CNH has a workforce of over 35,000 employees, emphasizing a diverse and inclusive workplace aimed at empowering customers [5]

Company Overview - CNH Industrial is a global equipment, technology, and services company focused on innovation, sustainability, and productivity [4] - The company operates under various brands, including Case IH, New Holland, CASE, STEYR, Raven, Hemisphere, Flexi-Coil, Miller, and Eurocomach, providing a wide range of agricultural and construction products [4] Annual General Meeting (AGM) Details - The 2025 AGM is scheduled for May 12, 2025, in Amsterdam, Netherlands, with a live webcast available on the company's website [1] - AGM materials, including audited financial statements, are accessible online, and shareholders can request hard copies free of charge [2] Dividend Declaration - The Board of Directors has proposed a cash dividend of USD $0.25 per share, pending shareholder approval [3] - If approved, the record date for the dividend will be May 21, 2025, and payment is expected on May 30, 2025 [3] Company Mission and Workforce - CNH Industrial emphasizes its commitment to customer empowerment and innovation, with over 35,000 employees in a diverse and inclusive workplace [5]

Group 1 - CNH brands, including Case IH and New Holland, are leading advancements in precision agriculture to address water scarcity in Uzbekistan and Turkmenistan through the Drops of the Future initiative [5][6] - The initiative aims to empower young professionals by fostering innovation and collaboration, marking the first partnership between OSCE and private companies on water and agri-food production [6][8] - The pilot project in Uzbekistan, developed in collaboration with xFarm, demonstrates how precision technology can enhance productivity and conserve water resources for farmers [5][6] Group 2 - The Tashkent Youth Workshop, which began in September 2024, brought together experts, policymakers, and industry leaders to discuss the ongoing impact of the initiative [8] - CNH Industrial is committed to innovation, sustainability, and productivity, providing strategic direction and R&D capabilities to support its global brands [8][9] - The company employs over 35,000 individuals globally, focusing on creating a diverse and inclusive workplace that empowers customers to achieve growth and success [9]

Leadership Transition - CNH announces Francesco Tutino as the new Chief Human Resources Officer (CHRO), effective May 1, 2025, succeeding Kelly Manley who served for 20 years [1][2] - Tutino has over 10 years of experience with CNH and Iveco Group, and was previously Group Chief HR & Organization Officer at Prysmian [3] Contributions and Achievements - Kelly Manley contributed to establishing a strong company culture, advancing sustainability commitments, and achieving operational targets during her tenure [4] - The company recognizes Manley's leadership in diversity, inclusion, and transformation initiatives [4] Company Overview - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [5] - The company operates brands such as Case IH, New Holland, CASE, and others, providing a wide range of agricultural and construction products [5] - CNH has a workforce of over 40,000 employees, emphasizing a diverse and inclusive workplace [6]