- Net sales of Industrial Activities totaled $7,537 million, up 23%, with increases in all segments due to continued strong industry demand and price realization.
- Adjusted EBIT of Industrial Activities of $469 million ($238 million in Q3 2020), with Agriculture adjusted EBIT of $415 million continuing the strong performance of the segment. Adjusted EBIT increased by $58 million and $45 million for Commercial and Specialty Vehicles and Construction, respectively. Powertrain adjusted EBIT of $44 million ($60 million in Q3 2020).
- Adjusted net income of $496 million, with adjusted diluted earnings per share of $0.36 (adjusted net income of $156 million in Q3 2020, with adjusted diluted earnings per share of $0.11). In the first nine months of 2021, adjusted diluted earnings per share was $1.10, surpassing all past full year performances.
- Reported income tax expense of $79 million, with adjusted effective tax rate (adjusted ETR) of 13% and 22% for the three and nine months, respectively. Both ETRs reflect favorable changes to the Company’s expected geographic mix of pre-tax earnings and net discrete tax benefits.
- Free cash flow of Industrial Activities was negative $0.7 billion due to seasonal working capital absorption, exacerbated by supply chain disruptions in the latter part of the quarter. Total Debt of $23.7 billion at September 30, 2021 ($26.1 billion at Dec. 31, 2020). Industrial Activities net cash position at $0.7 billion, a decrease of $0.7 billion from June 30, 2021.
- Available liquidity at $13.5 billion as of Sept. 30, 2021. In Sept. 2021, CNH Industrial Capital Canada Ltd. issued CAD$300 million in aggregate principal amount of 1.50% notes due Oct. 1, 2024.
CNH Industrial saw strong performance in the third quarter of 2021 as a result of higher volumes and favorable price realization, supported by continued strong demand across our industrial endmarkets, but with supply chain difficulties continuing to affect raw material cost, component availability and sales through the end of the quarter.
Global supply chain still showing increasing input costs and logistics pressures, with ongoing disruptions to the procurement environment forcing repeated reviews of production schedules. Critical conditions affecting the supply chain are expected to remain through the last quarter of the year. The Company cannot ensure that additional temporary closures of its manufacturing facilities will not occur due to ongoing component availability issues.
Order book in Agriculture more than doubled year over year for tractors worldwide with strong dealer order collection in all regions. Combines worldwide more than doubled, with strongest growth in North America and Europe.
Construction order book was up year over year in both Heavy and Light sub-segments, with increases in all regions and particularly in North America and Europe, where it more than tripled.
Truck order intake in Europe up 68% year over year, with light duty trucks up 61%, and medium & heavy duty trucks up 89%. Truck book-to-bill in Europe at 1.87.
2021 Outlook
The Company expects solid demand to continue across regions and segments. In the latter part of the year, increased impact of raw material and ongoing freight and logistics constraints will only be partially offset by positive price realization. The Company is updating the 2021 outlook for its Industrial Activities as follows:
- Net sales at the lower end of previous guidance (up between 24% and 28% year on year) including currency translation effects
- SG&A expenses lower/equal to 7.5% of net sales
- Free cash flow positive at around $1.0 billion
- R&D expenses and capital expenditures at around $2.0 billion.
Agriculture
In North America, tractor demand was up 3% for tractors under 140 HP, and up 29% for tractors over 140 HP; combines were up 29%. In Europe, tractor and combine demand were up 5% and 55%, respectively. South America tractor and combine demand were up 8% and 16%, respectively. In Rest of World, tractor demand decreased 7% and combine demand increased 28%.
Net sales were up 31%, mainly due to higher industry demand, better mix and favorable price realization. Net sales up 50% at constant currency versus the third quarter of 2019.
Adjusted EBIT was $415 million, with Adjusted EBIT margin at 11.6%. The $141 million increase was driven by higher volume, favorable mix and positive price realization, partially offset by higher raw material and freight costs, as well as higher SG&A costs and R&D spend from the pandemic-affected low levels for the corresponding period of 2020.