Financial results under U.S. GAAP
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Revenues totaled $8.4 billion for the fourth quarter and $32.6 billion for the full year 2014 ($9.3 billion and $33.8 billion for the same periods in 2013). Net sales of Industrial Activities were $8.0 billion for the quarter and $31.2 billion for the year ($9.0 billion and $32.7 billion for the same periods in 2013), down 5.9% and 2.8%, respectively, on a constant currency basis.
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Operating profit of Industrial Activities was $376 million for the quarter ($389 million in Q4 2013), with an operating margin at 4.7% (up 0.4 p.p.). For the full year operating profit of Industrial Activities was $1,988 million ($2,095 million in 2013). Operating margin stood at 6.4%, flat year over year.
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Net income was $87 million (or $0.06 per share) for the quarter and $708 million (or $0.52 per share) for the full year. Net income before restructuring and other exceptional items was $167 million (or $0.12 per share) for the quarter and $940 million (or $0.69 per share) for the full year, up $50 million compared to Q4 2013 and down $7 million for the full year.
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Net industrial debt was $2.7 billion at December 31, 2014 ($3.9 billion at September 30, 2014 and $2.2 billion at December 31, 2013). Available liquidity totaled $8.9 billion ($8.7 billion at December 31, 2013).
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The Board of Directors is recommending for 2014 a dividend of €0.20 per common share, totaling approximately $307 million (€271 million).
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For 2015 CNH Industrial expects net sales of Industrial Activities at approximately $28 billion, with operating margin of Industrial Activities between 6.1% and 6.4%. Net industrial debt expected between $2.2 billion and $2.4 billion.
LONDON, Jan. 29, 2015 — CNH Industrial N.V. today announced consolidated revenues of $32,555 million for 2014, down 3.8% compared to 2013 (down 2.1% on a constant currency basis). Net sales of Industrial Activities were $31,198 million in 2014, down 4.5% from 2013 (down 2.8% on a constant currency basis). Net sales increases in Construction Equipment and Powertrain were offset by a decline in Agricultural Equipment, mainly due to unfavorable volume and product mix, particularly in LATAM and NAFTA, and in Commercial Vehicles in LATAM, as well as by the negative impact of currency translation, primarily relating to the Brazilian real.
CNH Industrial Revenues by Segment ($ million) |
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Full Year | 4th Quarter | |||||
2014 | 2013 | $ change | 2014 | 2013 | % change | |
15,204 | 136,763 | -9.3 | Agricultural Equipment | 3,403 | 4,142 | -17.8 |
3,346 | 3,258 | 2.7 | Construction Equipment | 800 | 832 | -3.8 |
10,888 | 11,278 | -3.5 | Commercial Vehicles | 3,354 | 3,551 | -5.5 |
4,464 | 4,412 | 1.2 | Powertrain | 988 | 1,331 | -25.8 |
(2,704) | (3,050) | - | Eliminations and other | (527) | (860) | - |
31,198 | 32,661 | -4.5 | Total Industrial Activities | 8,018 | 8,996 | -10.9 |
1,828 | 1,679 | 8.9 | Financial Services | 465 | 432 | 7.6 |
(471) | (504) | - | Eliminiations and other | (118) | (138) | - |
32,555 | 33,836 | -3.8 | Total | 8,365 | 9,290 | -10 |
Fourth Quarter
The Company reported consolidated revenues of $8,365 million for the fourth quarter of 2014, down 10.0% compared to Q4 2013 (down 4.9% on a constant currency basis). Net sales of Industrial Activities were $8,018 million in Q4 2014, down 10.9% from Q4 2013 (down 5.9% on a constant currency basis), largely as a result of the difficult demand conditions in Agricultural Equipment.
Agricultural Equipment
Agricultural Equipment Net sales & Operating profit/(loss) ($ million) |
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Full Year | 4th Quarter | |||||
2014 | 2013 | Change | 2014 | 2013 | Change | |
15,204 | 16,763 | -9.3% | Net sales | 3,403 | 4,142 | -17.8% |
1,770 | 2,008 | -238 | Operating profit | 241 | 312 | -71 |
11.6 | 12.0 | -0.4 p.p. | Operating margin (%) | 7.1 | 7.5 | -0.4 p.p. |
Net sales for Agricultural Equipment were $15,204 million for 2014, down 9.3% from 2013 (down 7.9% on a constant currency basis), driven by unfavorable volume and product mix, particularly in LATAM and NAFTA with a significant decrease for high horsepower products. This impact was partially offset by positive pricing. All of the regions reported decreases in net sales with the largest proportionate decline reported in LATAM.
The geographic distribution of net sales for the year was 45% NAFTA, 31% EMEA, 13% LATAM and 11% APAC.
Worldwide agricultural equipment industry unit sales were down compared to 2013, with global demand for tractors down 7% and combines down 18%. NAFTA tractor demand was up 3%, largely concentrated in the lower horsepower segment (under 140 hp). The over 140 hp segment and combine demand were both down 25% year over year. LATAM tractor and combine markets decreased 15% and 24% respectively. EMEA markets were down 8% for tractors and 10% for combines, with a significant deceleration in tractor demand in Q4 2014. APAC markets decreased 8% for tractors and 9% for combines.
Agricultural Equipment’s worldwide market share performance was in line with the market for tractors but below the market for combines, mainly due to transition to Tier 4B engine compliant products in NAFTA and a negative market mix in APAC.
Agricultural Equipment’s worldwide production units was 5% higher than retail sales during 2014 but 19% below retail sales for the fourth quarter, as the Company implemented its planned production slowdown to reduce Company and dealer inventory.
Agricultural Equipment’s operating profit was $1,770 million for the year ($2,008 million in 2013). Operating margin was 11.6% (12.0% in 2013), with decreased volumes, unfavorable product mix, and negative industrial cost absorption, offset by positive net pricing as well as SG&A and R&D expense reductions. For the fourth quarter 2014, net sales totaled $3,403 million, a decrease of 17.8% compared to the same period in 2013 (down 14.2% on a constant currency basis), due to negative volume and product mix, partially offset by positive pricing.
Operating profit was $241 million in the fourth quarter, compared to $312 million for Q4 2013, with an operating margin of 7.1% (7.5% in Q4 2013). The decrease was driven by unfavorable volume, mix and industrial costs (primarily related to production curtailments to realign inventory to market demand), partially offset by favorable pricing, as well as SG&A and R&D expense reductions.
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