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CNH Industrial N.V. Annual Report on Form 10-K

Press release · 02/28 23:18
CNH Industrial N.V. Annual Report on Form 10-K

CNH Industrial N.V. Annual Report on Form 10-K

CNH Industrial N.V. filed its annual report on Form 10-K for the fiscal year ended December 31, 2024. The company reported a net loss of €1.4 billion, compared to a net loss of €1.1 billion in the prior year. Revenue decreased by 10% to €24.4 billion, primarily due to lower sales in the Agricultural and Construction Equipment segments. The company’s operating loss was €1.3 billion, compared to an operating loss of €1.1 billion in the prior year. As of December 31, 2024, the company had cash and cash equivalents of €3.4 billion and a debt-to-equity ratio of 1.4. The company also reported a significant decline in its net cash flow from operating activities, which was primarily driven by a decrease in working capital and an increase in capital expenditures. Despite these challenges, the company remains committed to its strategic priorities and is focused on improving its operational efficiency and reducing costs.

Financial Performance Overview

The financial report provides insights into the company’s financial performance, highlighting key areas such as trade receivables, currency risk, and interest rate risk. Here are the key points:

Trade Receivables

  • Trade receivables totaling $125 million at December 31, 2024 ($133 million at December 31, 2023) contain balances totaling $21 million ($24 million at December 31, 2023) that have been written down.
  • Receivables totaling $235 million ($184 million at December 31, 2023) were either past due or in nonaccrual status.

Currency Risk

  • The company is exposed to risk resulting from changes in exchange rates, which can affect its earnings and equity.
  • The total net trade flows exposed to currency risk amounted to the equivalent of 20% of revenue in 2024 (21% in 2023).
  • The company uses derivative financial instruments to hedge a certain percentage (55-85%) of the forecasted trading transaction exchange risk exposure for the coming 12 months.
  • The potential loss in fair value of derivative financial instruments held for currency risk management at December 31, 2024, resulting from a hypothetical change of 10% in the relevant exchange rates, amounted to approximately $113 million ($167 million at December 31, 2023).

Interest Rate Risk

  • Changes in market interest rates can affect the cost of financing and the return on investments, impacting the level of net financial expenses.
  • Financial Services provides loans (mainly to customers and dealers), financed primarily using various forms of external borrowings or asset-backed financing, where the characteristics of the variability of the interest rate applied to loans granted differ from those of the variability of the cost of the financing/funding obtained, changes in the current level of interest rates can affect the company’s net income/(loss).

Strengths and Weaknesses The company’s key strengths include its ability to manage currency risk through the use of derivative financial instruments and its diversified revenue streams. However, the company faces challenges in managing its trade receivables, with a significant portion being past due or in nonaccrual status.

Outlook The company’s future performance will depend on its ability to effectively manage its currency and interest rate risks, as well as its ability to improve the quality of its trade receivables. The company’s hedging policies and risk management strategies will be crucial in navigating the volatile market conditions.