CNH Industrial


(26.89% stake, 41.68% of voting rights on issued capital.




Key consolidated data of CNH Industrial for the year 2017 are as follows:

$ million20172016
Trading profit (1)1,4371,248189
Net income (loss)477(371)848
Net Industrial Debt (2)(976)(1,822)846
(1) Trading profit is a non-GAAP financial measure used to measure performance. Trading profit is defined as net revenues 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 sell-liquidating financial receivables portfolio.


Revenues for the year 2017 of the CNH industrial Group were $27,947 million, an increase of 10.3% (up 8.4% on a constant currency basis) compared to 2016. This increase is primarily due to an improvement in net revenues of Industrial Activities which were $26.423 million in 2017, a 10.7% increase (up 8.8% on a constant currency basis) compared to 2016.

Net revenues for Agricultural Equipment were $11,130 million in 2017, an increase of 10% (up 8.0% on a constant currency basis) compared to 2016. In LATAM the increase was mainly due to higher industry volume, market share gains, a favorable mix of higher horsepower products and net price realization. Net revenues increased in APAC mainly driven by favorable volume in Australia, Russia, India, China and South East Asia. In EMEA, net revenues increased due to higher industry volume, a favorable product mix and net price realization. In NAFTA, net revenues decreased as a result of de-stocking actions in our dealer network, primarily in the high horsepower tractors and the hay and forage product lines. NAFTA industry volumes were flat overall, with the row crop sector higher, offset by lower livestock sector volumes.

Net revenues of Construction Equipment were $2,626 million, an increase of 14% (up 12.8% on a constant currency basis), due to higher industry volume in all regions except EMEA, and net price realization, primarily in NAFTA and LATAM.

Commercial Vehicles’ net revenues were $10,668 million, an increase of 9.4% (up 7.4% on a constant currency basis) as a result of higher truck and bus sales in EMEA, higher volume and better product mix in APAC, and recovering truck sales in LATAM, mainly Argentina.

Powertrain net revenues were $4,374 million in 2017, an increase of 17.8% (up 15.7% on a constant currency basis), the increase was primarily attributable to higher volumes. Sales to external customers accounted for 48% of total net revenues (47% in 2016).

Financial Services revenues totaled $2,035 million and reported an increase of 5.8% (up 3.9% on a constant currency basis) due to higher activity in all regions except NAFTA and increased sales of equipment formerly on operating leases.

$ million20172016amount%
Agricultural Equipment11,13010,1201,01010.0
Construction Equipment2,6262,30432214.0
Commercial Vehicles10,6689,7489209.4
Eliminations and other(2,375)(2,015)(360)17.9
Total Industrial Activities26,42323,8702,55310.7
Financial Services2,0351,9241115.8
Eliminations and other(511)(466)(45)9.7

Trading profit

Trading profit for the year 2017 was $1,437 million with an increase of $137 million compared to $ 1,248 million in 2016.

Trading profit of Industrial Activities was $967 in 2017, an increase of $191 million compared to 2016, with a trading margin for the year of 3.7%, up 0.4% from the prior year.

Trading profit of Agricultural Equipment’s was $621 million, a 18.7% increase compared to $523 million in 2016, mainly due to the favorable volume and product mix in all regions except NAFTA. Trading margin increased 0.4% to 5.6%

Trading profit of Commercial Vehicles was $134 million compared to $214 million in 2016, with a trading margin of 1.3% (down 0.9% compared to 2016). Trading profit increased in LATAM and APAC, mainly due to higher volume and favorable pricing.

Construction Equipment reported a trading loss of $50 million in 2017 compared to $86 million trading loss in 2016. The improvement was due to higher volume, with a positive overhead absorption and net price realization, partially offset by increases in raw material cost, unfavorable foreign exchange impacts on product components, and increased production costs driven by the increased volume.

Trading profit of Powertrain was $355 million compared to $219 million in 2016, with a trading margin of 8.1% (5.9% in 2016). The improvement was due to higher volumes and manufacturing efficiencies.

In the fourth quarter of 2017 the Group deconsolidated the Venezuelan operations and the impact has been excluded from Trading profit.

$ million20172016amount%
Agricultural Equipment6215239818.7
Construction Equipment(50)(86)36-41.9
Commercial Vehicles134214(80)-37.4
Eliminations and other(93)(94)1-1.1
Total Industrial Activities96777619124.6
Financial Services470472(2)-0.4
Eliminations and other----
Trading profit1,4371,24818915.1

Net industrial debt

Net industrial debt at 31 December, 2017 was $976 million compared to $1,822 million at 31 December 2016. The decrease in net debt was primarily due to a significant cash generation from operating activities of $1.4 million, partially offset by negative foreign exchange translation impacts on euro denominated debt and dividend payments.

$ million 12/31/2017 12/31/2016 Change
Third party debt (1) (26,014) (25,434) (580)
Derivative hedging debt     0
Cash and cash equivalents 6,200 5,854 346
Other/financial assets/(liabilities)(2) (21) (154) 133
(Net debt)/Cash(3) (19,835) (19,734) (101)
Industrial Activities (976) (1,822) 846
Financial Services (18,859) (17,912) (947)
(1) As a result of the role played by the central treasury, debt for industrial Activities also includes funding raised by the central treasury on behalf Financial Services. (2) Including fair value of derivative financial instruments. (3) The net intersegment receivable/payable balance owed by Financial Services to Industrial Activities was $689 million and $483 million as of 31 December 2017 and 31 December 2016, respectively.

Significant events in the second-half of 2017 and subsequent events

On 24 October 2017, Fitch Ratings assigned CNH Industrial N.V. and CNH Industrial Capital LLC new long-term issuer default ratings of “BBB

This rating action follows the upgrade by Standard and Poor’s, on 15 June 2017, of the long - term corporate rating of CNH Industrial N.V. and CNH Industrial Capital LLC to “BBB-”. These two actions will make CNH Industrial’s securities eligible for the main investment grade indices in the U.S. market.

On 31 October 2017, CNH Industrial announced the early redemption of all of the outstanding $600 million in principal amount of CNH Industrial Capital LLC 3⅞% Notes due July 2018.

On 20 February 2018, the United States Supreme Court (the “Supreme Court”) ruled in favor of CNH Industrial and reversed the decision of the U.S. Court of Appeals for the Sixth Circuit (the “Sixth Circuit”), in Reese v. CNH Industrial N.V. and CNH Industrial America LLC (“Reese”), ruling that retirees are not necessarily entitled to lifetime health care benefits under the terms of an expired collective bargaining agreement that included a general termination clause that applied to all benefits. CNH expects the case to be remanded to the trial court for entry of judgment for CNH Industrial and dismissal of the plaintiffs’ complaint. Once the district court enters judgment in this case, which is expected to occur during the first half of 2018, CNH Industrial intends to review the retiree health care benefits applicable to the retirees in the Reese case (the “Reese Retirees”). Modifications to, or elimination of, the existing retiree health care benefits for the Reese Retirees may result in a reduction or elimination of the related CNH Industrial’s post-employment benefit obligations. At this stage, however, CNH Industrial has not taken a decision on how to implement the US Supreme Court decision and therefore is currently unable to estimate its financial impact.

On 19 March 2018 CNH Industrial N.V. announced the next resignation of Richard Tobin as Chief Executive Officer and as a Director of CNH Industrial to pursue another executive opportunity. Mr. Tobin’s departure will be effective April 27, 2018. The Board of Directors of CNH Industrial has appointed Derek Neilson as interim CEO, which has nearly two decades of experience with CNH Industrial and most recently served as Chief Operating Officer EMEA and President of the Company’s Commercial Vehicles Products Segment. From 2012 to 2015 he served as the Group’s Chief Manufacturing Officer.

2018 Outlook (US GAAP)

Worldwide demand for agricultural equipment is expected to improve with all regions flat to up 5% on average. Farm incomes are expected to remain stable, leading to no significant changes in planted acreage. Construction equipment demand is forecasted to be up 5-10% in LATAM and APAC while remaining relatively flat to up slightly in EMEA and NAFTA. Commercial vehicle demand is expected to be up about 15% in LATAM and flat to slightly down in EMEA and APAC.

As a result of the forecasted improvement in product demand conditions, and the positive impact of changes in the Company’s capital structure, CNH Industrial is setting its full year 2018 guidance as follows:

  • net sales of Industrial Activities of $27 billion to $28 billion;
  • adjusted diluted EPS of $0.63 to $0.67;
  • net industrial debt at the end of 2018 at $0.8 billion to $1.0 billion.










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