2022 FIRST QUARTER RESULTS
CNH Industrial reports solid first quarter performance:
Consolidated revenues of $4.6 billion, (up 13.4% compared to Q1 2021 for continuing operations)
Net income of $336 million, Adjusted Net Income of $378 million, with adjusted diluted EPS of $0.28, and
Adjusted EBIT of Industrial Activities of $429 million (up $36 million compared to Q1 2021).
Seasonal free cash flow absorption of $1,059 million (Industrial Activities) amid continued supply chain disruptions.
Financial results presented under U.S. GAAP
“In our first quarter as a pure play agricultural and construction equipment business, the CNH Industrial team delivered a solid performance that demonstrates the potential of a focused, customer-centric company. With redoubled commitment to customerinspired innovation, diligent operational execution, and improved product quality spurring margin expansion, we delivered net sales of Industrial Activities of nearly $4.2 billion, up 15% from last year on a constant currency basis. Alongside favorable product mix, this resulted in adjusted gross margin of 22.2%, up 60 basis points from Q1 2021 and adjusted EBIT of industrial activities increased by more than 9% to $429M. Order books remain exceptionally strong, up almost 40% in agriculture and 80% in construction, as demand remained healthy. Our thoughts are with our employees, customers, and dealers directly impacted by the war in Ukraine. We are all affected by the associated higher grain prices, potential food shortages, and rising energy costs. Despite these mostly unhelpful macro forces, we are maintaining our original 2022 guidance. We did not plan for positive cash flow in the first quarter, and as critical supply chain disruptions constrained our ability to ship finished goods, we ended the quarter with a cash outflow of $1.1 billion. Logistics pressures and semiconductor shortages, which are not unique to CNH Industrial, are expected to remain a headwind through the year, but I am confident in our team’s ability to navigate the current environment as evidenced by our results during the first quarter. With a robust slate of new products to be introduced, strong early returns from the Raven acquisition and our other Precision efforts, and a dedicated, tested leadership team ready to execute our ambitious plans, CNH Industrial is positioned to deliver on our strategic priorities and our short-term objectives.”
Scott W. Wine, Chief Executive Officer
Net sales of Industrial Activities of $4,180 million, up 13% mainly due to favorable price realization.
Adjusted EBIT of Industrial Activities of $429 million ($393 million in Q1 2021), with both segments up year over year. Agriculture adjusted EBIT margin above 12% and Construction at 4%.
Adjusted net income of $378 million, with adjusted diluted earnings per share of $0.28 (adjusted net income of $352 million in Q1 2021, with adjusted diluted earnings per share of $0.26). Adjusted net income in March 2022 excludes, among other items, $71 million related to asset write-downs, financial receivable allowances and valuation allowances on deferred tax assets as a result of the suspension of operations in Russia.
Adjusted gross profit margin of Industrial Activities of 22.2%, up 0.6% from Q1 2021 primarily due to better mix and favorable price realization in Agriculture. Reported income tax expense of $159 million and adjusted income tax expense(1) of $138 million, with adjusted effective tax rate (adjusted ETR(1)) of 28%, which reflects jurisdictional mix of pre-tax results and net discrete tax charges.
Free cash flow of Industrial Activities was negative $1.1 billion as a result of higher than historical seasonal working capital cash absorption primarily due to supply chain disruptions.Total Debt of $21.3 billion at March 31, 2022 ($20.9 billion at December 31, 2021). Industrial Activities net debt(1) position at $2.1 billion, an increase of $960 million from December 31, 2021.
Available liquidity at $9,399 million as of March 31, 2022.