CNH

(27.11% stake. Fiat also holds a 2.49% stake)

 

 

 

The main consolidated figures of the CNH Industrial Group for the first half of 2014 (drawn up in accordance with IFRS) are as follows:

  Half I  
$ million 2014 2013(1) Change
Net revenues 16,652 16,580  72
Trading profit/(loss) 1,311 1,366  (55)
Operating profit/(loss) 1,236 1,290  (54)
Profit/(loss) for the period 549 655  (106)
Profit/(loss) for the period attributable to owners of the parent 544 538  6
  At
$ million 6/30/2014  12/31/2013(1)
Total assets 58,139 56,462 
Net (debt)/cash (26,052) (23,290) 
- of which: Net industrial (debt)/cash (3,804) (2,195) 
Equity attributable to owners of the parent 7,846 7,591 
(1) Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar.

Net revenues

CNH Industrial Group revenues totaled $16,652 million for the first half of 2014, an increase of 0.4% over the same period of 2013. Net revenues of Industrial Activities were $15,881 million, in line with the first half of 2013. Revenues increased in Construction Equipment and Powertrain, offsetting reduced revenues for Agricultural Equipment and Commercial Vehicles. Revenues from Agricultural Equipment were down 4.0% to $8,142 million mainly due to weaker markets in LATAM, partially offset by favorable net pricing in most regions. Revenues from Construction Equipment were up 0.7% to $1,705 million, as increased demand in NAFTA was partially offset by decreased volumes in LATAM. Commercial Vehicles revenues decreased 0.3% to $5,110 million as increases in EMEA and APAC for heavy vehicles were offset by a sharp decline in LATAM due to overall weak economic conditions. Powertrain revenues increased 18.1% to $2,457 million driven by higher volumes. Net revenues of Financial Services totaled $1,037 million, up 7.5% compared to the first half of 2013 primarily driven by the increase in the average value of the portfolio.

  Half I   Change
$ million 2014 2013 (1)  %
Agricultural Equipment 8,142 8,483   -4.0
Construction Equipment 1,705 1,693   0.7
Commercial Vehicles 5,110 5,123   -0.3
Powertrain 2,457 2,080   18.1
Eliminations and other (1,533) (1,496)    
Total Industrial Activities 15,881 15,883   0.0
Financial Services 1,037 965   7.5
Eliminations and other (266) (268)    
Net revenues 16,652 16,580   0.4
(1) Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar.

Trading profit/(loss)

Trading profit was $1,311 million for the first half, down $55 million or -4.0% from the first half of 2013. Trading margin for the first half decreased 0.3 p.p. to 7.9%. Trading profit of Industrial Activities totaled $1,035 million for the first half, compared to $1,087 million for the first half of 2013. Trading profit increases in Construction Equipment and Powertrain, were more than offset by the negative effects of challenging operating conditions in LATAM affecting Commercial Vehicles and Agricultural Equipment.

Agricultural Equipment trading profit totaled $1,053 million (trading margin: 12.9%), down $20 million trading profit for the first half of 2013 (trading margin: 12.6%): unfavorable volume and mix were partially offset by net pricing and cost control actions. Construction Equipment reported a trading profit of $35 million (trading margin: 2.1%), up $51 million over the first half of 2013, due mainly to favorable pricing in NAFTA and LATAM and cost containment actions. Commercial Vehicles closed the first half with a trading loss of $113 million, compared to a loss of $15 million for the first half of 2013. The decrease is attributable to a sharp decline in deliveries in LATAM, as well as by Euro VI transition costs in the bus business and costs associated with the ramp-up of production related to new products, including incremental amortization of R&D expense, partially offset by positive volume/mix and pricing in both light and heavy vehicles in EMEA, favorable product mix in APAC and continued cost containment actions. Powertrain closed the first half with trading profit of $95 million, up $27 million over the same period in 2013, mainly due to the increase in volumes.

Trading profit of Financial Services totaled $276 million, down $3 million over the same period in 2013, mainly driven by a higher average portfolio value more than offset by SG&A increases associated with new activities launched in EMEA and LATAM to support Commercial Vehicles.

  Half I   Change
$ million 2014 2013 (1)   
Agricultural Equipment 1,053 1,073   -20.0
Construction Equipment 35 (16)   51.0
Commercial Vehicles (113) (15)   -98.0
Powertrain 95 68   27.0
Eliminations and other (35) (23)   -12.0
Total Industrial Activities 1,035 1,087   -52.0
Financial Services 276 279   -3.0
Eliminations and other 0 0   0.0
Trading profit 1,311 1,366   -55.0
(1) Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar.

Operating profit/(loss)

The first half closed with an operating profit of $1,236 million (or 7.4% of net revenues), compared to $1,290 million (or 7.8% of net revenues) for the first half of 2013; the year-over-year decrease of $54 million reflected the $55 million decrease in trading profit, while higher restructuring costs for $46 million were offset by lower net other unusual expenses for $47 million.

Restructuring costs for the first half of 2014 amounted to $65 million ($19 million in the first half of 2013). Such costs relate in part to Construction Equipment, as a result of the re-positioning of the Case and New Holland brand offerings and the announced closure of the Calhoun, Georgia, USA facility.

Other unusual expenses were $10 million for the first half of 2014 compared to $57 million for the first half of 2013, which mainly included expenses of $41 million related to the dissolution of the previous joint venture with Barclays.

Profit/(loss) for the period

Net financial expenses totaled $394 million for the first half of 2014 ($302 million for the same period of 2013).

Result from investments declined by $13 million to $56 million, due to reduced results from Asia Pacific joint ventures.

Income taxes for the first half totaled $349 million ($402 million for the first half of 2013), representing an effective tax rate of 38.9% for the period compared to an effective tax rate of 38.0% for the first half of 2013.

The first half closed with net profit of $549 million compared to $655 million for the first half of 2013.

Profit for the period attributable to owners of the parent was $544 million compared to $538 million for the same period of 2013.

Equity

Equity attributable to owners of the parent of CNH Industrial at June 30, 2014 amounted to $7,846 million compared to $7,591 million at December 31, 2013.

Net debt

At June 30, 2014 net debt was $26,052 million, an increase of $2,762 million compared to the $23,290 million recorded at the end of 2013. Excluding negative currency translation differences of approximately $73 million, the increase was mainly the result of cash absorption of $1,151 million generated by an increase in the loan portfolios, cash absorption of $340 million by operating activities, as well as capital expenditures during the period of $691 million and dividends distributed of $379 million.

   At    
$ million  6/30/2014 12/31/2013 (1)  Change
Debt  (31,355) (29,946)   (1,409)
- Asset-backed financing  (14,312) (14,727)   415
- Other debt  (17,043) (15,219)   (1,824)
Other financial assets (liabilities)(2) (63) 167   (230)
Cash and cash equivalents   5,366 6,489   (1,123)
Net debt  (26,052) (23,290)   (2,762)
Industrial Activities  (3,804) (2,195)   (1,609)
Financial Services  (22,248) (21,095)   (1,153)
(1) Amounts recast in order to reflect the change in presentation currency from Euro to U.S. dollar. (2) Includes the negative and positive fair value of derivative financial instruments.

Significant events in the first half of 2014 and subsequent events

On May 8, 2014, in Auburn Hills, Michigan, USA, the Chief Executive Officer of CNH Industrial N.V., Richard Tobin, along with members of the executive management of the CNH Industrial Group presented the Group’s 2014-2018 Business Plan to financial analysts and institutional investors.

At the CNH Industrial Annual General Meeting (AGM) held on April 16, 2014, shareholders approved the 2013 Annual Report and the distribution of a dividend of €0.20 per common share. The cash dividend was declared in euro and was paid on April 30, 2014 for a total amount of $375 million (€271 million).

Shareholders also re-elected all of the eleven members of the Board of Directors already in office on the date of the AGM.

Finally, shareholders approved the Equity Incentive Plan (EIP), and also renewed the authority to purchase own shares and acquire up to a maximum of 10% of the issued common shares at the AGM date.

On April 28, 2014, CNH Industrial announced that it intends to enter into a new licensing agreement with Sumitomo (S.H.I.) Construction Machinery Co. Ltd., a wholly owned subsidiary of Sumitomo Heavy Industries, Ltd.

Under this new technology license and component supply agreement, CNH Industrial will manufacture Sumitomo designed crawler excavators (models ranging from 13 to 35 tonnes) at designated plants within its manufacturing network. Start of production of the new localized models is planned for mid-2016.

This agreement also extends the existing Global Product Supply Agreement between CNH Industrial and Sumitomo (S.H.I.) Construction Machinery for the sourcing of excavators manufactured in Sumitomo plants. Since 1992, Sumitomo has been a supplier to the CNH Industrial global distribution network of excavators ranging from 7 to 80 tonnes. This next step will further strengthen the partnership between the two companies.

In June 2014, CNH Industrial announced that it will close its assembly plant in Calhoun, Georgia, USA, in the third quarter of 2015 as part of the business footprint optimization program which is a key pillar to achieving the targets in the Business Plan.

CNH Industrial has decided to launch a comprehensive efficiency program designed to enhance efficiency and competitiveness of its Industrial Activities.

The program is expected to result in a total cumulative charge of approximately $280 million over the next three years, with a non-cash impact of approximately 20%. The majority of the restructuring charges are expected to impact the statement of operations in 2014 and 2015. Benefits from this program are expected as early as the second half of 2014, with annualized savings of approximately $160 million by the end of 2016.

Restructuring actions in Agricultural Equipment are mainly related to the closure of a joint venture as the business model is no longer viable in the current environment.

Actions identified by Construction Equipment are related to the re-tooling of its industrial footprint in connection with the recently announced enlargement of the licensing agreements with Sumitomo (S.H.I.) Construction Machinery Co., Ltd, as well as the re-positioning of Case and New Holland brand offerings and the consequent alignment of their dealer networks. The recently announced closure of the assembly plant in Calhoun, Georgia, USA, represents one of those actions.

Commercial Vehicles actions will focus on SG&A expenses and business support costs as a result of the transition to CNH Industrial’s regional structure, as well as on the completion of manufacturing product specialization programs.

 

Commercial Register No.64236277 Legal notes | Credits