CNH Industrial

(26.97% stake, 39.99% of the voting rights of issued capital.

In addition, FCA holds a 1.17% stake, 1.74% of the voting rights)

The key consolidated figures of CNH Industrial in the first quarter of 2015 (drawn up in accordance with IFRS) are as follows:

Net revenues

Net revenues of the CNH Industrial Group in the first quarter of 2015 are $6,067 million, down 20.6% compared to the first quarter of 2014 (-10.7% on a constant currency basis). Net revenues of Industrial Activities are $5,682 million, down 21.8% compared to the first quarter of 2014 (-11.7% on a constant currency basis). In particular, the decline for Agricultural Equipment (-23.9% on a constant currency basis) is due to unfavorable industry volume and mix in all regions, primarily in the row crop sector of business, the decrease for Construction Equipment
(-16.9% on a constant currency basis) is due to negative volume and mix primarily in LATAM, and the reduction for Powertrain (-10.3% on a constant currency basis) is due to lower sales to captive customers.
Net of the negative impact of currency translation, net sales increased for Commercial Vehicles by about 5.9%, mainly driven by the positive volume and mix in EMEA, offset by the negative impact of translation differences that caused an 11.2% reduction at current exchange rates. The trend of Financial Services,in line, at current exchange rates, shows an increase of 8.6% (on a constant currency basis) primarily due to a larger average portfolio during the quarter, partially offset by a decrease in interest yields.

Trading profit (loss)

Trading profit in the first quarter of 2015 is $267 million, down 47.6% (-40.5% on a constant currency basis) from the first quarter of 2014. The trading profit margin is 4.4% compared to 6.7% in the first quarter of 2014.
Trading profit of industrial Activities is $140 million, down $240 million from the first quarter of 2014, with a trading margin of 2.5%, down 2.7 percentage points compared to the same period of the prior year.
The reduction in the trading profit of Agricultural Equipment was driven by negative volume and mix including negative industrial absorption as a result of forecasted inventory balancing measures, partially offset by positive net price realization, purchasing efficiencies and positive contribution from structural cost reductions.
Commercial Vehicles’ trading profit improved due to favorable volume and mix and cost reductions in selling, general and administrative expenses.
Construction Equipment basically reported a breakeven in the first quarter of 2015, substantially flat compared to the first quarter of 2014, as unfavorable volume and mix, mainly in heavy equipment in LATAM, were offset by structural cost containment actions implemented last year.
Trading profit of Financial Services is in line with the first quarter of 2014.

Operating profit (loss)

Restructuring expenses total $9 million in the first quarter of 2015 and mainly relate to actions in Agricultural Equipment and Commercial Vehicles as per the Company’s Efficiency Program launched in 2014. Restructuring expenses in the first quarter of 2014 were $30 million and principally refer to Construction Equipment.

Profit (loss) for the period

In the first quarter of 2015 net interest expenses were recorded for $155 million compared to $215 million in the first quarter of 2014, including a pre-tax charge of $64 million due to the remeasurement of Venezuelan assets denominated in bolivars following the changes in Venezuela’s exchange rate mechanism. Excluding this item, the comparison with the same period of 2014 shows an increase of $4 million mainly on account of exchange losses, partially offset by the lower cost of debt.

Income taxes in the first quarter of 2015 are $83 million ($145 million in the first quarter of 2014), representing an effective tax rate of 73.5% (49.8% in the first quarter of 2014, or 40.8% net of the effects of the pre-tax charge regarding Venezuela referred to above). The increase is due to deferred tax assets that were not recognized on tax losses in several countries.

Net debt

Net industrial debt of $3,120 million at March 31, 2015 is $246 million higher than the $2,874 million at December 31, 2014. Cash flows generated by operating activities before the change in working capital were $136 million, while working capital absorbed $772 million, mainly for the increase in inventories. Net investments were $185 million and the exchange effect had a positive impact of $616 million on net industrial debt.

Significant events in the first quarter of 2015 and subsequent events

In April 2015, CNH Industrial announced that, in line with the ongoing Efficiency Program launched in 2014, it plans certain changes in the geographical localization of its Iveco commercial vehicles manufacturing facilities which involve Madrid, Valladolid and Piacenza.