CNH Industrial

(27.10% stake, 40.13% of the voting rights.
In addition, FCA holds a 2.49% stake, 2.82% of the voting rights)

 

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

  9 months
to September 30
QIII
$ million 2014  2013
(1) 2014  2013 (1)
Net revenues 24,469  24,816  7,817  8,236 
Trading profit/(loss) 1,881  2,040  570  674 
Operating profit/(loss) 1,741  1,949  505  659 
Profit/(loss) for the period 783  984  234  329 
Profit/(loss) attributable to owners of the parent 789  811  245  273 
 at 
$ million 9/30/2014  12/31/2013
(1)
Total assets 56,366  56,462 
(Net debt) / cash (25,599)  (23,290) 
- of which: Net industrial (debt)/cash (4,109)  (2,195) 
Equity attributable to owners of the parent 7,859  7,591 
(1) Amounts recast in order to reflect the change in presentation currency from euro to U.S. dollar.

CNH Industrial Group revenues totaled $24,469 million for the first nine months of 2014, a decrease of 1.4% compared to the same period of 2013. Net revenues of Industrial Activities were $23,329 million, a decrease of 2.0% compared to the first nine months of 2013. Revenue increases in Construction Equipment and Powertrain were offset by reduced revenues in Agricultural Equipment and Commercial Vehicles. Revenues from Agricultural Equipment were down 6.5% to $11,801 million mainly due to weaker demand in LATAM and NAFTA, partially offset by favorable net pricing in most regions. Revenues from Construction Equipment were up 4.9% to $2,546 million, as increased demand in NAFTA and EMEA was partially offset by decreased volumes in LATAM and APAC. Commercial Vehicles revenues decreased 2.2% to $7,675 million as increases in EMEA and APAC were offset by a sharp decline in LATAM due to overall weak economic conditions. Powertrain revenues increased 12.8% to $3,484 million driven by higher volumes. Net revenues of Financial Services totaled $1,541 million, up 8.0% compared to the first nine months of 2013 primarily driven by the increase in the average value of the portfolio.

  9 months
to September 30
Change
$ million 2014 2013 %
Agricultural equipment 11,801 12,621 -6.5
Construction equipment 2,546 2,426 4.9
Commercial vehicles 7,675 7,846 -2.2
Powertrain 3,484 3,090 12.8
Eliminations and other (2,177) (2,190) -
Total Industrial Activities 23,329 23,793 -2.0
Financial Services 1,541 1,427 8.0
Eliminations and other (401) (404) -
Net revenues 24,469 24,816 -1.4

Trading profit/(loss)

Trading profit was $1,881 million for the first nine months of 2014, down $159 million or -7.8% compared to the same period of 2013. Trading margin for the first nine months decreased 0.5 percentage points to 7.7%.

Trading profit of Industrial Activities totaled $1,488 million, compared with $1,646 million for the first nine months 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, mainly due to a significant decline in demand, and unfavorable volume and mix for Agricultural Equipment.

Agricultural Equipment trading profit totaled $1,451 million (trading margin: 12.3%), down $167 million from the $1,618 million trading profit for the first nine months of 2013 (trading margin: 12.8%): decreasing volume and negative mix as well as unfavorable currency impact were partially offset by net pricing realization.
Construction Equipment reported a trading profit of $64 million (trading margin: 2.5%), up $120 million over the $56 million trading loss for the first nine months of 2013, mainly due to favorable pricing in NAFTA and LATAM and cost containment actions.
Commercial Vehicles closed the first nine months with a trading loss of $111 million, compared with a profit of $10 million for the same period of 2013. The decrease is attributable to a sharp decline in deliveries in LATAM, as well as to Euro VI transition costs in the bus business and costs associated with the ramp-up of production related to new products, partially offset by positive volume primarily in light and heavy vehicles in EMEA, favorable pricing in EMEA and APAC and the result of continued cost containment actions. Powertrain reported a trading profit of $147 million, up $32 million over the same period in 2013, with a trading margin of 4.2% (trading margin: 3.7% for the first nine months of 2013) mainly due to the increase in volumes and related industrial efficiencies Trading profit of Financial Services totaled $393 million, down $1 million from the same period in 2013, with the positive impact of the higher average portfolio value more than offset by higher provisions for credit losses and by costs associated with new activities launched in EMEA and LATAM to support Commercial Vehicles.

  9 months
to September 30
 
$ million 2014 2013 Change
Agricultural equipment 1,451 1,618 (167)
Construction equipment 64 (56) 120
Commercial vehicles (111) 10 (121)
Powertrain 147 115 32
Eliminations and other (63) (41) (22)
Total Industrial Activities 1,488 1,646 (158)
Financial Services393394(1)
Eliminations and other---
Trading profit/(loss)1,8812,040(159)

Operating profit/(loss)

CNH Industrial Group closed the first nine months of 2014 with an operating profit of $1,741 million (or 7.1% of net revenues), compared with $1,949 million (or 7.9% of net revenues) for first nine months of 2013; the year-over-year decrease of $208 million reflected the $159 million decrease in trading profit and higher restructuring costs of $89 million were partially offset by lower net other unusual expenses of $40 million.

Restructuring costs for the first nine months of 2014 amounted to $116 million, ($27 million for the first nine months of 2013, mainly related to Commercial Vehicles). These costs relate to Construction Equipment, as a result of the re-positioning of the Case and New Holland brand offerings and the announced closure of the Group’s Calhoun, Georgia, USA facility; to Commercial Vehicles, mainly due to actions aimed at operational efficiency as a result of the transition to CNH Industrial’s regional structure; and to Agricultural Equipment, primarily due to the closure of a joint venture in China.

Other unusual expenses were $24 million for the first nine months of 2014 mainly due to the closure of an indirect taxes claim and costs for the rationalization of strategic suppliers. In the first nine months of 2013 they amounted to net expenses of $64 million, including expenses of $41 million related to the dissolution of the previous joint venture with Barclays and its consolidation into the Group’s Financial Services business, as well as costs for the rationalization of strategic suppliers.

Profit/(loss) for the period

Net financial expenses totaled $585 million for the first nine months of 2014 ($453 million for the same period in 2013). Excluding an exceptional pre-tax charge of $71 million due to the re-measurement of Venezuelan assets denominated in bolivares following the changes in Venezuela’s exchange rate mechanism, net financial expenses totaled $514 million, an increase of $61 million over the first nine months of 2013, mainly deriving from higher average net industrial debt partially offset by more favorable interest rates. 
Income taxes for the first nine months totaled $441 million ($606 million for the first nine months of 2013), representing an effective tax rate of 36.0% for the period compared to an effective tax rate of 38.1% for the same period of 2013. The Group’s 2014 effective tax rate is still expected to be in the range of 36% to 40%. 

Net debt

At September 30, 2014, the CNH Industrial Group’s net debt was $25,599 million, an increase of $2,309 million compared with the $23,290 million recorded at the end of 2013.
During the first nine months of 2014, Net industrial debt increased to $4,109 million at September 30, 2014 from $2,195 million at December 31, 2013. Cash generated by operating activities before changes in working capital ($1,586 million) was mainly offset by working capital absorption ($2,372 million) and investments in fixed assets ($1,074 million).

  At  
$ million 9/30/2014 12/31/2013 Change
Debt (30,941) (29,946) (995)
- Asset-backed financing (13,781) (14,727) 946
- Other debt (17,160) (15,219) (1,941)
Other financial assets (liabilities)(1) (75) 167 (242)
Cash and cash equivalents 5,417 6,489 (1,072)
Net (debt)/cash (25,599) (23,290) (2,309)
Industrial Activities (4,109) (2,195) (1,914)
Financial Services (21,490) (21,095) (395)
(1) Includes the positive or negative fair value of derivative financial instruments

Significant events in the third quarter of 2014 and subsequent events

In September 2014, CNH Industrial was confirmed as Industry Leader in the Dow Jones Sustainability Indices (DJSI) World and Europe for the fourth consecutive year. The 2014 assessment resulted in a score of 87/100 for CNH Industrial, compared to an average of 50/100 for the participating companies in the Machinery and Electrical Equipment industry. All companies chosen for consideration in the indices are evaluated by RobecoSAM, investment specialists focused exclusively on Sustainability Investing. Inclusion in the prestigious DJSI family of indices is limited to companies judged as exemplary in terms of their economic, environmental and social performance. The Group’s position in DJSI reflects the significant results achieved in a number of areas that led to the highest score in the economic and environmental dimension.

In September 2014, the Group announced the definitive agreement to acquire substantially all of the assets of precision spraying equipment manufacturer Miller-St. Nazianz, Inc. These assets will become part of the New Holland Agricultural brand, providing a strong platform to grow the self-propelled sprayer business on a global scale. The agreement is subject to customary closing conditions, with the goal of closing before the end of the year.

In the same month of September, CNH Industrial Finance Europe S.A. completed its offering of an aggregate principal amount of notes for €700 million due September 2021 at a fixed interest rate of 2.875% issued under the Global Medium Term Note Programme guaranteed by CNH Industrial N.V.

Commercial Register No.64236277 Legal notes | Credits