CNH Industrial (26.90% stake, 39.91% of voting rights on issued capital).

 

The key consolidated figures of CNH Industrial reported in the first half of 2017 are presented below:

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(1) Trading profit is a non-GAAP financial measure used to measure performance. Operating profit of Industrial Activities is defined as revenues from net sales less cost of sales, selling, general and administrative costs, research and development costs and other operating income and expenses.
(2) Net industrial debt is defined as net debt excluding the funded portion of the self-liquidating financial receivables portfolio.
(3) Data at December 31, 2016.

Revenues

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Revenues recorded in the first half of 2017 by the CNH Industrial Group were $12.923 million, up 4.5% (up 5.3% on a constant currency basis) compared to the first half of 2016. Revenues from net sales of Industrial Activities were $12,152 million in the first half of 2017, a 4.4% increase (up 5.4% on a constant currency basis) compared to the same period of the prior year.

In particular, net sales of Agricultural Equipment up 6.2% (up 5.6% on a constant currency basis) is due to a rebound in demand in LATAM, net sales increased in APAC mainly driven by favorable volume in Australia, while in EMEA sales were flat. Net sales were down in NAFTA due to unfavorable industry volume.

Construction Equipment’s net sales increased up 6.0% (up 5.8% on a constant currency basis) due to a positive volume and mix primarily in NAFTA and APAC.

Net sales of Commercial Vehicles increased 0.7% (up 3.0% on a constant currency basis); higher volumes in APAC and LATAM were offset by lower truck and bus volume in EMEA, mainly due to the 2016 Euro VI pre-buy effect in the light vehicle range.

Net revenues in Powertrain increased 12.0% (up 15.1% on a constant currency basis) compared to the first half 2016 as a result of higher sales volumes.

Financial Services revenues in the first half 2017 increased 7.1% (up 5.8% on a constant currency basis).

Trading profit

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Trading profitin in the first half of 2017 was $678 million, a $40 million increase compared to the first half of 2016 ($638 million). Trading profit of Industrial Activities was $436 million, a $43 million increase compared to the first half 2016, with a trading margin of 3.6%, up 0.2% compared to the same period of the prior year

Trading profit of Agricultural Equipment was $309 million for the first half of 2017, ($247 million in the first half of 2016) with a trading margin of 5.9% (5% in the first half of 2016). Favorable volume in LATAM and APAC including improved fixed cost absorption, and disciplined net price realization.

Trading profit of Commercial Vehicles was $64 million (trading margin of 1.3%). The decrease of $29 million was primarily due to lower volume and unfavorable mix in EMEA, partially offset by higher volume in LATAM and in APAC.

In the first half of 2017 Construction Equipment reported a trading loss of $42 million compared to a trading loss of $9 million in the first half of 2016, mainly as a result of pricing pressure in the first quarter of 2017 primarily in NAFTA, as well an unfavorable foreign exchange impact on product cost. Trading margin decreased 2.7% to 3.5%; result was impacted by a planned slower production schedule in the first quarter to maintain appropriate levels of inventory.

Trading profit of Powertrainwas $160 million, up $50 million compared to the same period in 2016, with a trading margin of 7.5%, up 1.7% compared to the first half of 2016 as a result of higher volumes and manufacturing efficiencies.

Net industrial debt

Net debt of Industrial Activities at June 30, 2017 is $2,132 million compared to $1,822 million at December 31, 2016. The increase in net debt at June 30, 2017 mainly reflects the annual dividend payment of $161million and a negative foreign exchange impact on euro denominated debt, partially offset by the seasonal cash generation from operating activities.

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(1) Total debt of Industrial Activities includes Intersegment notes payable to Financial Services of $819 million and $1,002 million as of June 30, 2017 and December 31, 2016, respectively. Total debt of Financial Services includes Intersegment notes payable to Industrial Activities of $1,322 million and $1,485 million as of June 30, 2017 and December 31, 2016, respectively.
(2) The net intersegment receivable/payable balance owed by Financial Services to Industrial Activities was $503 million and $483 million as of June 30, 2017 and December 31, 2016, respectively. 

Significant events in the first half of 2017

In April 2017, CNH Industrial Capital LLC, a wholly owned subsidiary of CNH Industrial N.V., issued at par $500 million in aggregate principal amount of 4.375% Notes due 2022.

In May 2017, CNH Industrial Finance Europe S.A., a wholly-owned subsidiary of CNH Industrial N.V., issued €500  million in principal amount of 1.375% notes due May 2022, with an issue price of 99.335% of the principal amount. The notes have been issued under the Euro Medium Term Note Programme guaranteed by CNH Industrial N.V. and have been admitted to listing on the Irish Stock Exchange.

In June 2017, Case New Holland Industrial Inc., a wholly owned subsidiary of CNH Industrial N.V., redeemed all of the outstanding $636 million aggregate principal amount of its 7.875% Senior Notes due 2017. Cash used for the redemption was approximately $656 million, which included the aggregate principal amount of the notes being redeemed plus a “make-whole” premium.

In June 2017, CNH Industrial N.V. advised its intention to renew its share buyback program (the “Program”). The Program will involve the repurchase from time to time of up to $300 million of the Company’s common shares and is intended to optimize the capital structure of the Company and to meet the obligations arising from the Company’s equity incentive plans. The Program has a duration up to and including October 13, 2018 and will be funded by the Company’s liquidity.

In June 2017, S&P Global Ratings raised its long-term corporate credit rating on both CNH Industrial N.V. and CNH Industrial Capital LLC from “BB+” to “BBB-” with stable outlook. The short-term rating of CNH Industrial N.V. was raised from “B” to “A-3”. The issue-level ratings of both CNH Industrial N.V. and CNH Industrial Capital LLC were also raised to “BBB-”.

2017 Outlook (US GAAP) 

CNH Industrial manages its operations, assesses its performance and makes decision about allocation of resources based on financial results prepared only in accordance with U.S. GAAP, and, accordingly, also the full year guidance presented below is prepared under U.S. GAAP.
During the first half of 2017, market conditions across major segments of CNH Industrial Group have been better than originally expected. Therefore CNH industrial Group is leading its 2017 guidance for sales and EPS to the upper end of the range while keeping the net industrial debt guidance unchanged as follows:

  • Net sales of Industrial Activities of approximately $24 billion;
  • Adjusted diluted EPS (of approximately $0.41;
  • Net industrial debt at the end of 2017 between $1.4 billion and $1.6 billion.

 

Commercial Register No.64236277 Legal notes | Credits