CNH announces Global Leadership Team appointment Basildon, January 13, 2024 CNH (NYSE: CNH) today announces the appointment of Luis Abreu as Chief Information Officer (CIO). In this role, he joins the Company’s Global Leadership Team (GLT), which is empowered to carry out the fast and effective delivery of CNH’s strategic priorities for profitable long-term growth globally. Mr. Abreu brings over two decades of experience with CNH and its predecessor companies. He began his career in IT in 2005 at truck and ...

Group 1 - CNH's CASE Construction Equipment unveiled a special edition compact track loader inspired by Metallica frontman James Hetfield at a charity concert [1][2] - The custom-designed CASE TV450B loader will be used at Hetfield's ranch, following a design commissioned by him [1][2] - The design, created by CNH's John Piper, incorporates elements from Hetfield's tattoos and personal style, including a sandy camouflage pattern reminiscent of his Snakebyte electric guitar [1][2] Group 2 - The CASE TV450B compact track loader is known for its durability and versatility in commercial and residential construction, as well as landscaping tasks [2] - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity across its brands [2] - The company has a rich history of over two centuries in pioneering its sectors and continues to innovate to enhance customer efficiency and success [2]

Financial Performance - Net sales for Q3 2024 were $3,997 million, a decrease of 25% compared to $5,332 million in Q3 2023[8] - Total revenues for the nine months ended September 30, 2024, were $14,960 million, down 16% from $17,895 million in the same period of 2023[8] - Net income for Q3 2024 was $310 million, a decline of 43% from $540 million in Q3 2023[9] - Earnings per share for Q3 2024 were $0.24, compared to $0.40 in Q3 2023[8] - The company reported a comprehensive income of $301 million for Q3 2024, down from $483 million in Q3 2023[9] - The company reported a net income of $368 million for the nine months ended September 30, 2024, compared to $467 million for the same period in 2023, indicating a decrease of approximately 21.2%[13] - Basic earnings per share (EPS) for the three months ended September 30, 2024, was $0.24, a decrease of 40% compared to $0.40 for the same period in 2023[34] - The company reported a comprehensive loss of $58 million for Q3 2024, compared to a comprehensive income of $537 million in Q3 2023[16] Revenue Breakdown - Total revenues for Q3 2024 were $4,654 million, a decrease of 22.2% compared to $5,986 million in Q3 2023[8] - Agriculture segment revenue for Q3 2024 was $3,310 million, down 24.4% from $4,384 million in Q3 2023[29] - Construction segment revenue for Q3 2024 was $687 million, a decline of 27.5% compared to $948 million in Q3 2023[29] - Financial Services revenue for Q3 2024 was $659 million, slightly up from $653 million in Q3 2023[29] - Total industrial activities revenue for Q3 2024 was $3,997 million, down 25% from $5,332 million in Q3 2023[29] - Revenues from sales of goods for the nine months ended September 30, 2024, were $12,895 million, down 19.4% from $16,031 million in the prior year[30] Expenses and Liabilities - Research and development expenses for Q3 2024 were $221 million, a decrease of 17% compared to $266 million in Q3 2023[8] - Total liabilities decreased to $36,264 million as of September 30, 2024, from $38,117 million at the end of 2023[6] - The company incurred restructuring expenses of $12 million and $5 million during Q3 2024 and 2023, respectively, totaling $94 million and $8 million for the nine months ended September 30, 2024, and 2023[66] - Warranty and campaign program liabilities increased to $637 million as of September 30, 2024, from $610 million at the end of 2023[65] Cash and Cash Equivalents - Cash and cash equivalents were $1,801 million as of September 30, 2024, down from $4,322 million at December 31, 2023[6] - The total cash, cash equivalents, and restricted cash at the end of the period was $2,450 million, down from $3,685 million at the end of September 30, 2023, a decrease of 33.5%[11] - The company experienced a net increase in cash, cash equivalents, and restricted cash of $(2,595) million for the nine months ended September 30, 2024, compared to $(1,444) million for the same period in 2023, indicating a worsening cash position[11] Assets and Investments - Total assets as of September 30, 2024, were $44,033 million, down from $46,267 million as of December 31, 2023[6] - The company’s retained earnings increased to $10,136 million as of September 30, 2024, compared to $7,906 million as of September 30, 2023, reflecting an increase of 28.3%[14] - Total investments in unconsolidated subsidiaries and affiliates increased to $532 million as of September 30, 2024, from $479 million at the end of 2023, a rise of 11%[59] Acquisitions and Goodwill - The company completed the acquisition of Hemisphere for $181 million on October 12, 2023, enhancing its precision and automation technology[20] - CNH acquired a controlling interest in Bennamann for approximately $51 million on March 15, 2023[20] - The company purchased Augmenta for approximately $80 million on March 13, 2023, acquiring the remaining 89.5% it did not own[21] - Goodwill associated with the Hemisphere acquisition was preliminarily estimated at $111 million[20] - Goodwill increased to $3,615 million as of September 30, 2024, from $3,614 million at the beginning of the year, reflecting adjustments from acquisitions[60] Financing and Credit Quality - Proceeds from long-term debt increased to $13,094 million for the nine months ended September 30, 2024, compared to $7,510 million in the same period of 2023, marking a 74.5% increase[11] - The allowance for credit losses for retail financing increased to $400 million as of September 30, 2024, from $322 million at the beginning of the period[48] - The provision for credit losses increased due to specific reserve needs in South America, primarily related to Brazilian market conditions[49] - Total past due receivables in North America for 2024 amounted to $63 million, with a total performing balance of $8,932 million[51] Derivatives and Risk Management - The total notional amount of CNH's foreign exchange derivatives was $7.3 billion as of September 30, 2024, up from $6.1 billion at December 31, 2023[76] - The total notional amount of CNH's interest rate derivatives was approximately $9.2 billion as of September 30, 2024, compared to $9.0 billion at December 31, 2023[77] - The fair value of derivatives designated as hedging instruments totaled $133 million as of September 30, 2024, an increase from $91 million at December 31, 2023[83] - The company utilizes derivatives to mitigate exposure to interest rate and foreign currency risks, with no speculative purposes involved[75] Shareholder Information - EXOR N.V. held 45.3% of CNH's voting power as of September 30, 2024, allowing significant influence over shareholder decisions[96] - CNH did not enter into any significant transactions with EXOR N.V. during the nine months ended September 30, 2024[97]

Financial Performance - Consolidated revenue for Q3 2024 was $4.65 billion, a decline of 22% compared to Q3 2023[2] - Adjusted net income for Q3 2024 was $304 million, down 44% from $540 million in Q3 2023[1] - Adjusted diluted EPS for Q3 2024 was $0.24, a decrease of 40% from $0.40 in Q3 2023[2] - Net income attributable to CNH Industrial N.V. for Q3 2024 was $306 million, a decline of 43% from $537 million in Q3 2023[20] - Basic earnings per share for Q3 2024 were $0.24, compared to $0.40 in Q3 2023, reflecting a 40% decrease[20] - Total revenues for Q3 2024 were $4,024 million, a decrease of 13.5% compared to $4,654 million in Q3 2023[23] - Net income for Q3 2024 was $232 million, down from $310 million in Q3 2023, representing a decline of 25.2%[23] - Total revenues for the nine months ended September 30, 2024, were $14,960 million, down 16% from $17,895 million in the same period of 2023[20] - Net income for the nine months ended September 30, 2024, was $796 million, compared to $1,083 million in the same period of 2023, a decrease of 26.5%[24] Segment Performance - Agriculture segment net sales decreased by 24% to $3.31 billion in Q3 2024, primarily due to lower shipment volumes[4] - Construction segment net sales fell by 28% to $687 million in Q3 2024, driven by decreased market demand[5] - Full year 2024 guidance for Agriculture segment net sales has been revised down to a decline of 22% to 23% year-over-year[7] - Financial Services revenue increased by 1% to $659 million in Q3 2024, with net income of $78 million, a decrease of 9% from Q3 2023[6] Cash Flow and Liquidity - Free cash flow of Industrial Activities in Q3 2024 was an outflow of $180 million, compared to an outflow of $127 million in Q3 2023[1] - Cash and cash equivalents decreased to $1,801 million as of September 30, 2024, from $4,322 million at the end of 2023[21] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $276 million, compared to a cash outflow of $608 million in the same period of 2023[22] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(2,595) million for the nine months ended September 30, 2024[22] - Cash flows from operating activities showed a net cash used of $885 million for the nine months ended September 30, 2024, compared to a net cash provided of $1,266 million for the same period in 2023[26] - Cash and cash equivalents for Industrial Activities stand at $1,358 million, compared to $3,532 million in December 2023, indicating a significant reduction[25] Assets and Liabilities - Total assets decreased to $44,033 million as of September 30, 2024, down from $46,267 million at the end of 2023[21] - Total liabilities decreased to $36,264 million as of September 30, 2024, from $38,117 million at the end of 2023[21] - Total debt as of September 30, 2024, was $27,348 million, slightly down from $27,472 million as of December 31, 2023[29] - Financing receivables, net, are reported at $24,062 million, a decrease from $24,249 million, indicating a tightening in credit availability[25] Operational Efficiency - Adjusted EBIT margin for Industrial Activities was 8.4% in Q3 2024, down from 11.8% in Q3 2023[1] - Adjusted EBIT for Industrial Activities segments was $336 million for the three months ended September 30, 2024, down from $642 million in the same period of 2023, representing a decline of 47.6%[27] - Total Adjusted EBIT of Industrial Activities for the nine months ended September 30, 2024, was $1,210 million, down from $1,972 million in the same period of 2023, a decrease of 38.7%[27] Future Outlook - The company expects to continue monitoring economic conditions and geopolitical events that may impact future performance, emphasizing the uncertainty in predicting financial outcomes[15] - The company plans to focus on restructuring efforts to improve operational efficiency and financial performance moving forward[28] - The company forecasts adjusted diluted EPS for 2024 to be between $1.05 and $1.15, revised down from $1.30 to $1.40[7] Revisions and Adjustments - CNH reported a revision in prior periods' results due to an overstatement of equity in income from unconsolidated subsidiaries by $96 million in 2023 and $67 million in the first half of 2024[12] - The total impact of revisions across FY 2023 resulted in a decrease of $96 million in net income[36] - The total assets as of December 31, 2023, were revised to $46,267 million, down from the previously reported $46,351 million due to adjustments in investments in unconsolidated subsidiaries[34]

Financial Performance - Net sales for Q2 2024 were $4,803 million, a decrease of 19.3% compared to $5,954 million in Q2 2023[6] - Total revenues for the first half of 2024 were $10,306 million, down 13.4% from $11,909 million in the same period of 2023[6] - Net income for Q2 2024 was $438 million, a decline of 38.3% from $710 million in Q2 2023[7] - Earnings per share (EPS) for Q2 2024 were $0.34, compared to $0.53 in Q2 2023, reflecting a decrease of 35.8%[6] - Comprehensive income attributable to CNH Industrial N.V. for Q2 2024 was $292 million, down from $776 million in Q2 2023[7] - Net income for the six months ended June 30, 2024, was $840 million, a decrease of 29.9% compared to $1,196 million for the same period in 2023[8] - Total revenues for the three months ended June 30, 2024, were $5,488 million, a decrease of 16.4% compared to $6,567 million for the same period in 2023[22] - The company's revenues from sales of goods were $4,789 million for the three months ended June 30, 2024, down from $5,942 million in the same period of 2023, representing a decline of 19.4%[23] Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash at the end of Q2 2024 were $2,647 million, a decrease of 32.6% from $3,925 million at the end of Q2 2023[8] - The company reported a net cash used by operating activities of $515 million in the first half of 2024, compared to a net cash used of $840 million in the same period of 2023[8] - Proceeds from long-term debt in the first half of 2024 were $8,754 million, significantly higher than $4,408 million in the first half of 2023[8] - Payments of long-term debt rose to $8,362 million, up from $3,485 million in the same period last year[8] - The company reported a net cash used by investing activities of $929 million, an improvement from $1,247 million in the prior year[8] Research and Development - Research and development expenses for the first half of 2024 totaled $465 million, down 7% from $500 million in the first half of 2023[6] Acquisitions and Investments - CNH Industrial's acquisition of Hemisphere for $181 million aims to enhance its precision, automation, and autonomy technology in agriculture and construction sectors[15] - The company recorded preliminary goodwill of $111 million and intangible assets of $51 million from the Hemisphere acquisition, with adjustments reducing goodwill by $3 million as of June 30, 2024[15] - CNH acquired a controlling interest in Bennamann for approximately $51 million, with preliminary goodwill recorded at $118 million[15] - The acquisition of Augmenta for approximately $80 million included preliminary goodwill of $76 million, with adjustments reducing goodwill by $14 million[16] Equity and Dividends - The total equity balance as of June 30, 2024, was $7,602 million, compared to $7,955 million at March 31, 2024, reflecting a decrease primarily due to treasury stock acquisition[10] - The company paid dividends totaling $591 million in the second quarter of 2024, compared to $527 million in the same period of the previous year[10] Taxation - The effective tax rate for Q2 2024 was 20.9%, down from 22.9% in Q2 2023, primarily due to discrete items related to inflation adjustments in Argentina[29] - For the first half of 2024, the effective tax rate was 20.1%, compared to 24.9% in the same period of 2023, reflecting similar discrete item impacts[29] Segment Performance - Agriculture segment reported Adjusted EBIT of $536 million for Q2 2024, a decrease from $821 million in Q2 2023; for the first half, it was $957 million compared to $1,391 million in 2023[31] - Construction segment Adjusted EBIT was $60 million in Q2 2024, down from $72 million in Q2 2023; for the first half, it was $111 million compared to $116 million in 2023[31] - Financial Services segment net income for Q2 2024 was $91 million, slightly down from $94 million in Q2 2023[31] Credit and Financing - Total financing receivables as of June 30, 2024, were $23.868 billion, a decrease from $24.249 billion as of December 31, 2023[32] - Retail financing receivables were $13.763 billion as of June 30, 2024, down from $13.868 billion at the end of 2023[32] - The allowance for credit losses for retail was $322 million as of June 30, 2024, compared to $330 million at the beginning of the quarter[37] - The provision for credit losses is included in selling, general and administrative expenses, indicating a focus on managing credit risk[38] Derivatives and Risk Management - The total notional amount of CNH's foreign exchange derivatives was $6.3 billion as of June 30, 2024, compared to $6.1 billion at December 31, 2023[69] - CNH's interest rate derivatives totaled approximately $8.7 billion at June 30, 2024, down from $9.0 billion at December 31, 2023[70] - For the three months ended June 30, 2024, CNH recognized a net gain of $32 million from derivatives, with a loss of $15 million from foreign exchange contracts and a gain of $47 million from interest rate contracts[72] Other Comprehensive Income - The total other comprehensive loss for the three months ended June 30, 2024, was $141 million, and for the six months, it was $190 million[84] - As of June 30, 2024, CNH's total other comprehensive loss amounted to $2,564 million, compared to $2,246 million as of June 30, 2023, reflecting an increase of 14.1%[86] Corporate Governance - As of June 30, 2024, EXOR N.V. held 45.2% of CNH's voting power, allowing significant influence over shareholder decisions[89] - CNH and Iveco Group entered into a ten-year Engine Supply Agreement for the design and supply of off-road engines post-Demerger[90]

Core Insights - CNH Industrial (CNH) reported quarterly earnings of $0.38 per share, matching the Zacks Consensus Estimate, but down from $0.52 per share a year ago [7] - The company posted revenues of $5.49 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 2.72% and down from $6.57 billion year-over-year [2] - CNH shares have declined approximately 16.5% since the beginning of the year, contrasting with a 14% gain in the S&P 500 [9] Financial Performance - The earnings surprise for CNH was 26.92% when it produced earnings of $0.33 per share against an expected $0.26 per share a quarter ago [1] - Over the last four quarters, CNH has surpassed consensus EPS estimates two times [8] - The current consensus EPS estimate for the upcoming quarter is $0.36 on revenues of $5.43 billion, and for the current fiscal year, it is $1.47 on revenues of $22.17 billion [11] Industry Context - CNH belongs to the Zacks Manufacturing - Farm Equipment industry, which is currently ranked in the bottom 13% of over 250 Zacks industries [5] - Another competitor in the same industry, Deere, is expected to report revenues of $10.89 billion, reflecting a 23.7% decline from the previous year [6] - The estimate revisions trend for CNH is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [14]

Revenue and Sales Performance - Consolidated revenue for Q2 2024 was $5,488 million, a decrease of 16% compared to Q2 2023's $6,567 million[1] - Net sales of Industrial Activities fell to $4,803 million, down 19% from $5,954 million in Q2 2023[1] - Agriculture net sales decreased by 20% to $3,913 million, with adjusted EBIT at $536 million, down from $821 million in Q2 2023[4][5] - Construction net sales were $890 million, a 16% decline from $1,064 million in Q2 2023, with adjusted EBIT of $60 million[6] - Total revenues for the first half of 2024 were $10,306 million, down 13.5% from $11,909 million in the same period of 2023[26] - Net sales for Q2 2024 were $4,803 million, a decrease of 19.3% compared to $5,954 million in Q2 2023[26] - Year-to-date consolidated revenue for Q2 2024 was $10.31 billion, a decrease of 13% from $11.91 billion in YTD Q2 2023[58] - Net sales of Industrial Activities for YTD Q2 2024 were $8.93 billion, down 17% from $10.73 billion in the same period last year[58] Income and Earnings - Adjusted net income for Q2 2024 was $485 million, down 32% from $711 million in Q2 2023, with adjusted diluted EPS at $0.38 compared to $0.52[2][3] - Net income attributable to CNH Industrial N.V. for Q2 2024 was $433 million, a decline of 38.6% from $706 million in Q2 2023[26] - Basic earnings per share for Q2 2024 were $0.34, compared to $0.53 in Q2 2023, reflecting a decrease of 35.8%[26] - Net Income for the six months ended June 30, 2024, was $840 million, compared to $1,196 million in the same period of 2023, reflecting a decline of 29.9%[38] - Financial Services net income for the six months ended June 30, 2023, was $209 million, an increase from $172 million in the previous year[44] Cash Flow and Liquidity - Cash flow from operating activities improved to $379 million in Q2 2024, compared to a cash outflow of $139 million in Q2 2023[1][3] - Free cash flow for Industrial Activities was negative $515 million for the first half of 2024, compared to negative $840 million in the same period of 2023[29] - Cash flow used in operating activities for YTD Q2 2024 was $(515) million, an improvement of $325 million compared to $(840) million in YTD Q2 2023[58] - Cash and cash equivalents decreased to $2,002 million as of June 30, 2024, from $4,322 million at the end of 2023[33] - Total cash and cash equivalents, including restricted cash, were reported at $2,647 million as of June 30, 2024[46] Assets and Liabilities - Total assets as of June 30, 2024, were $43,959 million, down from $46,351 million at the end of 2023[33] - Total liabilities decreased to $36,297 million as of June 30, 2024, from $38,117 million at the end of 2023[33] - Total Assets as of June 30, 2024, amounted to $43,959 million, a decrease from $46,351 million as of December 31, 2023, indicating a reduction of 5.5%[40] - Total Liabilities decreased to $36,297 million as of June 30, 2024, from $38,117 million at the end of 2023, a decline of 4.8%[40] - The company reported a total debt of $26,868 million as of June 30, 2024, compared to $27,472 million as of December 31, 2023[46] Expenses and Restructuring - The gross profit margin for Industrial Activities decreased to 22.9%, down 210 basis points from 25.0% in Q2 2023[1] - Research and development expenses for Q2 2024 were $237 million, a decrease of 12% from $269 million in Q2 2023[26] - The company reported restructuring expenses of $82 million for the six months ended June 30, 2024, compared to $3 million in the same period of 2023[38] - The restructuring program aims for a 10-15% reduction in total labor and non-labor SG&A expenses, with total restructuring charges expected to reach up to $180 million[3] Market Outlook and Guidance - The agriculture segment net sales are projected to decline between 15% and 20% year-over-year, with adjusted EBIT margin between 13.0% and 14.0%[56] - The construction segment net sales are expected to decrease between 15% and 20% year-over-year, with an adjusted EBIT margin between 5.0% and 6.0%[56] - Full-year guidance has been updated to reflect weaker market conditions, with adjusted diluted EPS expected to be between $1.30 and $1.40[56]

Core Insights - CNH Industrial reported a 16% decline in consolidated revenue for Q2 2024, totaling $5.49 billion, compared to $6.57 billion in Q2 2023, primarily due to lower industry demand [1][30] - Net income decreased to $438 million, with diluted earnings per share (EPS) of $0.34, down from $710 million and $0.52 in the same quarter last year [1][30] - The company anticipates continued weakness in global industry retail sales for agriculture and construction equipment in the second half of 2024 [8][34] Financial Performance - Adjusted net income for Q2 2024 was $485 million, with adjusted diluted EPS of $0.38, compared to $711 million and $0.52 in Q2 2023 [2][30] - Gross profit margin decreased to 24.4% from 27.0% in Q2 2023, attributed to lower production volume and unfavorable product mix [4][30] - Industrial Free Cash Flow generation was $140 million in Q2 2024, a decrease from previous periods [1][30] Segment Performance - Agriculture segment net sales fell by 20% to $3.91 billion, driven by lower shipment volumes and reduced dealer inventory requirements [3][36] - Construction segment net sales decreased by 16% to $890 million, primarily due to lower volumes across all regions [5][38] - Financial Services segment revenue increased by 19% to $1.37 billion, with net income rising by 37% to $209 million [11][30] Cost Management and Outlook - The company is implementing cost reduction programs aimed at improving through-cycle margins, with a target of achieving a 10-15% reduction in total labor and non-labor SG&A expenses [8][35] - Full-year guidance has been updated to reflect weaker market conditions, with agriculture segment net sales expected to decline between 15% and 20% year-over-year [40][34] - The adjusted EBIT margin for the agriculture segment is projected to be between 13.0% and 14.0% [40]

Core Points - CNH has announced a collaboration with Oxfam to support two social projects in Africa, focusing on sustainable development goals including decent work, reducing inequalities, responsible consumption, and climate action [2][4][17] - The Social Factory Initiative in South Africa aims to create a new model for plastic recycling and social inclusion, directly helping 1,200 people and improving conditions for over 300,000 [4][7][10] - The Sumud Project in Tunisia focuses on supporting micro, small, and medium-sized farms, aiming to assist around 1,000 individuals in vulnerable communities [8][14][15] Project Details - The collaboration will provide financial, technical, and training support to develop crisis management strategies for businesses, particularly in the agricultural, tourism, and artisanal sectors [3][8] - The initiative is co-financed by the Italian Agency for Development Cooperation and supported by various public and private organizations [3][4] - The projects are designed to empower women, young people, and individuals with disabilities, addressing significant gender inequalities in the workforce [4][17] Company Background - CNH Industrial is a global leader in equipment, technology, and services, focusing on innovation, sustainability, and productivity [18] - The company operates various brands, including Case IH and New Holland, providing comprehensive agricultural applications and construction products [18] - CNH has a history of over two centuries in pioneering its sectors and continues to innovate for customer efficiency and success [11]

Core Insights - CNH is focusing on raising environmental awareness through educational projects in Brazil, particularly targeting children and young people as future custodians of the planet [1][4] - The company has sponsored campaigns in schools across both urban and remote areas in Brazil's north-east for two consecutive years, emphasizing the importance of environmental education [2][4] - CNH's initiatives include a variety of extra-curricular activities that promote environmental education, diversity, inclusion, and human rights advocacy [4][5] Company Overview - CNH Industrial is a global leader in equipment, technology, and services, with a strong emphasis on innovation, sustainability, and productivity [6] - The company operates various brands, including Case IH, New Holland, and CASE, which provide comprehensive agricultural and construction solutions [6] - CNH's workforce consists of over 40,000 employees, contributing to a diverse and inclusive workplace aimed at empowering customers [3][6] Educational Initiatives - The educational content delivered to children was designed to be engaging and accessible, utilizing audio, comic books, workshops, and theatre productions [5] - Over 15,000 children in the states of Piauí and Maranhão participated in these educational activities, highlighting the scale of CNH's outreach [5]