Improved profitability in three out of four industrial segments
Financial results presented under U.S. GAAP (1)(2)
- Continued demand strength in Commercial Vehicles segment (+18% in Europe) buffered impact from challenging trading conditions in Agricultural Equipment business
- Industrial Activities operating margin of 3.5%, with year-over-year operating profit and margin improvements achieved in Commercial Vehicles, Construction Equipment and Powertrain businesses
- Agricultural Equipment operating margin at 4.2% despite significant underproduction in NAFTA row crop sector
- Net industrial debt of $2.5 billion, with industrial operations cash flow improved by $375 million as compared to Q1 2015
- Full year guidance reaffirmed
CNH Industrial N.V. (NYSE:CNHI / MI:CNHI) today announced consolidated revenues of $5,372 million for the first quarter 2016, down 5.7% compared to the first quarter 2015 on a constant currency basis (down 9.9% on a reported basis). Net sales of Industrial Activities were $5,076 million in Q1 2016, down 5.7% compared to the same period in 2015 on a constant currency basis (down 9.8% on a reported basis). Operating profit of Industrial Activities was $178 million for the first quarter, a $45 million decrease compared to the same period in 2015, with an operating margin of 3.5%, down 0.5 p.p. compared to the first quarter 2015. “Given market conditions, we are pleased with the performance of our operating segments this quarter,” said Richard Tobin, Chief Executive Officer of CNH Industrial. “While we continue to navigate challenging trading conditions in the agricultural equipment industry, we are encouraged by the improved operating profits and margins in our other industrial segments compared to last year.”
Net loss was $513 million for the quarter, or -$0.38 per share, after recording the previously announced exceptional non-tax deductible charge of $502 million related to the investigation of the Company’s whollyowned subsidiary, Iveco S.p.A., and its competitors by the European Commission for certain alleged anticompetitive practices and related matters. Adjusted net income, which excludes this exceptional charge and restructuring expenses, was $1 million for the quarter. Given the losses in certain jurisdictions and the inability to book the related tax benefit, the Company recorded a tax charge in excess of its long-term effective tax rate (“ETR”) objective of between 34% to 36%.
Net industrial debt of $2.5 billion at March 31, 2016, was $0.9 billion higher than at December 31, 2015, including a $0.2 billion negative foreign exchange translation impact. Net industrial cash flow was a net outflow of $0.6 billion in the first quarter 2016, a $0.4 billion improvement over the same period last year. As of March 31, 2016, available liquidity was $8.2 billion, up $1.0 billion compared to March 31, 2015.
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(1) CNH Industrial reports quarterly and annual consolidated financial results under U.S. GAAP and EU-IFRS. The tables and discussion related to the financial results of the Company and its segments shown in this press release are prepared in accordance with U.S. GAAP. Financial results under EU-IFRS are shown in specific tables at the end of this press release.
(2) Refer to the Non-GAAP Financial Information section of this press release for information regarding Non-GAAP financial measures
