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]

分组1 - CNH Industrial reported quarterly earnings of $0.10 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.33 per share a year ago, representing an earnings surprise of 11.11% [1] - The company posted revenues of $3.83 billion for the quarter, surpassing the Zacks Consensus Estimate by 1.14%, but down from $4.82 billion year-over-year [2] - Over the last four quarters, CNH has only surpassed consensus EPS estimates once and has topped consensus revenue estimates just once [2] 分组2 - The stock has increased approximately 2.1% since the beginning of the year, while the S&P 500 has declined by 5.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $4.47 billion, and for the current fiscal year, it is $0.64 on revenues of $17.06 billion [7] - The Manufacturing - Farm Equipment industry, to which CNH belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8]

Q1 2025 RESULTS REVIEW May 1, 2025 SAFE HARBOR STATEMENT AND DISCLOSURES All statements other than statements of historical fact contained in this presentation including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, ...

[First Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) CNH Industrial reported a significant decline in Q1 2025 results, with consolidated revenues falling 21% to $3.8 billion and diluted EPS dropping to $0.10, driven by lower demand and dealer destocking [Q1 2025 Performance Summary](index=1&type=section&id=Q1%202025%20Performance%20Summary) CNH Industrial reported a significant decline in Q1 2025 results, with consolidated revenues falling 21% to $3.8 billion and diluted EPS dropping to $0.10, driven by lower demand and dealer destocking | Metric | Q1 2025 | Q1 2024 | Change | Change at constant currency | | :--- | :--- | :--- | :--- | :--- | | **Consolidated revenues** | $3,828 Million | $4,818 Million | (21)% | (17)% | | **Net sales of Industrial Activities** | $3,172 Million | $4,131 Million | (23)% | (21)% | | **Net income** | $132 Million | $369 Million | (64)% | - | | **Diluted EPS** | $0.10 | $0.29 | ($0.19) | - | | **Adjusted net income** | $132 Million | $388 Million | (66)% | - | | **Adjusted diluted EPS** | $0.10 | $0.30 | ($0.20) | - | | **Cash flow from operating activities** | $162 Million | ($894) Million | +$1,056 Million | - | | **Free cash flow of Industrial Activities** | ($567) Million | ($1,209) Million | +$642 Million | - | - The decline in Net sales of Industrial Activities was mainly attributed to lower shipments resulting from decreased industry demand and dealer destocking[4](index=4&type=chunk) - Management emphasized a focus on reducing dealer inventories and managing costs to navigate current macroeconomic uncertainties, expressing confidence in strategic initiatives ahead of the upcoming Investor Day[1](index=1&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) This section details the performance of Agriculture, Construction, and Financial Services segments, all experiencing revenue declines and margin contractions [Agriculture](index=3&type=section&id=Agriculture) The Agriculture segment saw a 23% decline in net sales to $2.58 billion and a 64% drop in Adjusted EBIT to $139 million due to lower demand and shipments | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Net sales** | $2,581 Million | $3,373 Million | (23)% | | **Gross profit margin** | 20.0% | 23.8% | (380) bps | | **Adjusted EBIT** | $139 Million | $388 Million | (64)% | | **Adjusted EBIT margin** | 5.4% | 11.5% | (610) bps | - Industry demand for tractors and combines fell sharply in North America (down **12-51%**) and EMEA (down **23-34%**), while South America saw a rebound with tractor and combine demand up **10%** and **1%** respectively[7](index=7&type=chunk) - The decrease in Adjusted EBIT was primarily caused by lower shipment volumes, partially offset by improved purchasing and manufacturing costs and reduced SG&A expenses[9](index=9&type=chunk) [Construction](index=3&type=section&id=Construction) The Construction segment's net sales decreased by 22% to $591 million, with Adjusted EBIT falling 73% to $14 million due to lower volumes and unfavorable pricing | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Net sales** | $591 Million | $758 Million | (22)% | | **Gross profit margin** | 14.9% | 17.4% | (250) bps | | **Adjusted EBIT** | $14 Million | $51 Million | (73)% | | **Adjusted EBIT margin** | 2.4% | 6.7% | (430) bps | - Global industry volume for Heavy construction equipment increased by **2%**, while Light construction equipment decreased by **6%**, with aggregated demand falling in North America (**-11%**), EMEA (**-9%**), and South America (**-1%**), but growing in Asia Pacific (**+7%**)[10](index=10&type=chunk) [Financial Services](index=3&type=section&id=Financial%20Services) Financial Services revenues declined 5% to $651 million, with net income decreasing 24% to $90 million due to currency impacts and increased risk costs | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $651 Million | $685 Million | (5)% | | **Net income** | $90 Million | $118 Million | (24)% | - The managed portfolio stood at **$28.0 billion** as of March 31, 2025, a slight decrease from the prior year[14](index=14&type=chunk) - The balance of receivables more than 30 days past due as a percentage of the receivable portfolio increased to **2.3%** from **1.7%** as of March 31, 2024[14](index=14&type=chunk) [2025 Outlook](index=4&type=section&id=2025%20Outlook) CNH updated its 2025 full-year guidance, lowering and widening ranges for net sales, EBIT margins, and EPS due to macroeconomic uncertainty and inventory reduction strategy [Updated 2025 Full-Year Guidance](index=4&type=section&id=Updated%202025%20Full-Year%20Guidance) CNH updated its 2025 outlook, lowering and widening guidance ranges for net sales, EBIT margins, and EPS due to macroeconomic uncertainty and inventory reduction strategy - The company anticipates lower global industry retail sales in 2025 for both agriculture and construction equipment markets compared to 2024[15](index=15&type=chunk) - CNH is focused on reducing excess channel inventory by producing fewer units than the retail demand level, which will negatively impact 2025 net sales[15](index=15&type=chunk) | Metric | Updated 2025 Outlook | Previous 2025 Outlook | | :--- | :--- | :--- | | **Agriculture Net Sales (YoY)** | Down 12% to 20% | Down 13% to 18% | | **Agriculture Adj. EBIT Margin** | 7% to 9% | 8.5% to 9.5% | | **Construction Net Sales (YoY)** | Down 4% to 15% | Down 5% to 10% | | **Construction Adj. EBIT Margin** | 2% to 4% | 4% to 5% | | **Free Cash Flow of Industrial Activities** | $100 Million to $500 Million | $200 Million to $500 Million | | **Adjusted Diluted EPS** | $0.50 to $0.70 | $0.65 to $0.75 | [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents the Consolidated Statements of Operations, Balance Sheets, and Cash Flows, detailing the company's financial performance and position [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, costs, and profits, showing a decline in total revenues from **$4.8 billion** to **$3.8 billion** and net income from **$369 million** to **$132 million** | ($ million, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $3,828 | $4,818 | | Cost of goods sold | $2,569 | $3,195 | | Total Costs and Expenses | $3,666 | $4,416 | | Income before Income Taxes | $162 | $402 | | **Net Income** | $132 | $369 | | Net Income attributable to CNH | $131 | $368 | | **Diluted EPS** | $0.10 | $0.29 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) This statement shows the company's financial position, highlighting a decrease in cash from **$3.2 billion** to **$1.7 billion** and total debt from **$26.9 billion** to **$26.0 billion** | ($ million) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,695 | $3,191 | | Inventories, net | $5,156 | $4,776 | | **Total Assets** | **$42,057** | **$42,933** | | **Liabilities and Equity** | | | | Debt | $26,010 | $26,882 | | **Total Liabilities** | **$34,098** | **$35,165** | | **Total Equity** | **$7,902** | **$7,713** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement details cash flows from operating, investing, and financing activities, showing a significant improvement in net cash from operating activities to **$162 million** from a **($894 million)** use | ($ million) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided (used) by operating activities** | **$162** | **($894)** | | Net cash provided (used) by investing activities | ($280) | ($419) | | Net cash provided (used) by financing activities | ($1,422) | $319 | | Net increase (decrease) in cash, cash equivalents and restricted cash | ($1,468) | ($1,086) | [Supplemental Financial Information and Non-GAAP Reconciliations](index=5&type=section&id=Supplemental%20Financial%20Information%20and%20Non-GAAP%20Reconciliations) This section provides reconciliations for key non-GAAP financial metrics and details an immaterial correction to prior period financial statements [Non-GAAP Reconciliations](index=18&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations for key non-GAAP metrics, including Adjusted EBIT by segment, Net Cash (Debt), Free Cash Flow of Industrial Activities, and Adjusted Diluted EPS Adjusted EBIT of Industrial Activities by Segment | ($ million) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Agriculture | $139 | $388 | | Construction | $14 | $51 | | Unallocated items, eliminations and other | ($52) | ($67) | | **Total Adjusted EBIT of Industrial Activities** | **$101** | **$372** | Reconciliation to Free Cash Flow of Industrial Activities | ($ million) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided (used) by Operating Activities | $162 | ($894) | | Less: Cash flows from Operating Activities of Financial Services | (638) | (198) | | Less: Investments in PP&E and intangibles of Industrial Activities | (103) | (96) | | Other adjustments | 12 | (21) | | **Free cash flow of Industrial Activities** | **($567)** | **($1,209)** | [Revision of Prior Period Financial Statements](index=22&type=section&id=Revision%20of%20Prior%20Period%20Financial%20Statements) The company disclosed an immaterial correction to prior period financial statements due to accounting treatment for an unconsolidated affiliate in Türkiye under highly inflationary conditions - An immaterial correction was made to prior periods' results for the accounting treatment related to the highly inflationary economy in Türkiye and its impact on an unconsolidated affiliate[58](index=58&type=chunk) - The correction fixed an overstatement of CNH's 'Equity in income of unconsolidated subsidiaries and affiliates' by **$96 million** in 2023 and **$67 million** in the first half of 2024[58](index=58&type=chunk) Impact of Revision on Q1 2024 Results | ($ million, except EPS) | Previously Reported | Revision Impacts | As Revised | | :--- | :--- | :--- | :--- | | Equity in income of unconsolidated subsidiaries | $77 | ($33) | $44 | | Net income | $402 | ($33) | $369 | | Diluted EPS | $0.31 | ($0.02) | $0.29 |

Financial Data and Key Metrics Changes - Full year 2024 consolidated revenues decreased by 20% and industrial net sales fell by 23% compared to 2023 [11] - Industrial adjusted EBIT margin for the full year was 8.2%, down 370 basis points from 2023, primarily due to lower volumes [11] - Q4 net sales of industrial activities were down 31% year over year to $4.1 billion, driven by decreased equipment deliveries [16] - Full year net income was $1.3 billion with EPS at $1.05, down from $0.39 in Q4 2023 [16] Business Line Data and Key Metrics Changes - In agriculture, net sales decreased by 31% in Q4 and 23% for the full year, with production hours down 34% year over year in Q4 [17][18] - Construction segment saw a 33% drop in Q4 net sales, but gross margins remained flat year over year [21] - Financial Services net income for Q4 was $92 million, a decrease of $21 million compared to Q4 2023, but full year net income increased to $379 million [22][24] Market Data and Key Metrics Changes - Global industry demand is expected to decline by 5% to 10% from 2024, with a more significant decline of 10% to 15% anticipated for the company due to high exposure to cash crop equipment in North America [31] - Dealer inventories in North America are still above target levels, with about 1.5 months of new equipment inventory above expectations [31][93] Company Strategy and Development Direction - The company is focused on reducing channel inventories and maintaining pricing discipline, planning to underproduce to retail demand at least through the first half of 2025 [8][10] - A significant emphasis is placed on quality improvements and operational efficiencies, with a run rate savings of about $600 million achieved by the end of 2024 [9][25] - The company aims to maintain a healthy balance sheet while investing in product and technology advancements [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a challenging year due to depressed commodity prices affecting farm income and equipment demand [11][10] - The outlook for 2025 includes expectations of continued low production levels and a focus on upgrading production lines and processes [32] - Management remains cautious about geopolitical uncertainties and their potential impact on the business [26][39] Other Important Information - The company plans to maintain its annual dividend and share repurchase program in 2025, returning approximately $1.3 billion to shareholders in 2024 [28] - R&D expenses are expected to be slightly lower in 2025, around €800 million, benefiting from structural efficiencies [36] Q&A Session Summary Question: Pricing expectations for the two segments in 2025 - Management expects full year pricing to be flat to slightly positive, with the first half being flat to slightly down and the second half showing low to mid-single-digit price increases [43][44] Question: Impact of trade tariffs and production options - Management is analyzing the potential impact of tariffs on imports and is considering reshoring some assembly processes to the U.S. [46][48] Question: Core decremental margins and production versus retail plans - Management indicated that they expect to recover warranty costs throughout 2025, impacting decremental margins positively [57][58] - Production is expected to be down 10% to 15% in the first half of 2025, with a potential recovery in the second half [62] Question: Margin cadence within agriculture for 2025 - Management anticipates lower margins in the first half of 2025, with a recovery expected in the second half, returning to double-digit margins [77][79] Question: Targeted incentive programs for 2025 - The company plans to continue targeted commercial actions to reduce aged inventory and align inventory levels with market demand [86][88]