CNH Industrial Presents the Strategic Business Plan for Stakeholder Value Creation at New York Investor Day

CNH Industrial N.V.

CNH Industrial N.V. (NYSE: CNHI / MI: CNHI), announces its new five-year 2020 – 2024 business plan ‘Transform 2 Win,’ today at its Capital Markets Day event in New York, U.S.A., presenting a detailed strategy to transform the Company’s structure and performance to empower its five operating segments achieve their full potential.

Highlights of the five-year plan include:
  • Net sales projected to grow at a compound annual growth rate of 5%
  • Significant growth planned in annual product development investment for all segments, totaling $13 billion over the course of the plan to 2024
  • Adjusted EBIT Margin of Industrial Activities to reach 8% by 2022 and 10% by 2024, with adjusted EBIT more than doubling from current levels
  • ROIC of Industrial Activities is projected to achieve 20% (a 600bps increase from 2018) and adjusted diluted EPS to grow from $0.86 (mid-point of 2019 guidance) to $2.00 by 2024
  • Separation of ‘On-Highway’ (commercial vehicles and powertrain segments) and ‘Off-Highway’ assets (agriculture, construction and specialty segments) will result in the creation of two listed entities, each a world leader in its business
The plan is based on robust and specific segment and functional strategies to be implemented through a combination of value enhancing strategic initiatives including sales growth opportunities, performance and business simplification initiatives, asset optimization efficiencies, and talent engagement and development programs.

CNHI Capital Markets Day
Under the ‘Transform 2 Win’ strategy, CNH Industrial will reduce operating costs and increase the efficiency of its asset base through targeted restructuring actions and other charges condensed into an efficiency program and certain other initiatives including the 80/20 simplification process, initiated in Q4 2018. Full implementation is expected by the end of 2022. Pre-tax charges associated with this efficiency program in the remainder of 2019 and through 2022 are expected to be between $450 and $500 million, of which $250 million is expected to be in cash.

The ‘Transform 2 Win’ plan will see the Company separate its ‘On-Highway’ and ‘Off- Highway’ businesses, a decision that follows the completion of a deep portfolio review process, taking into account, among other things, strategic, investor, and synergy considerations. This review highlighted that the ‘On-Highway’ and ‘Off-Highway’ businesses have diverging regulatory and customer requirements and are impacted differently by the accelerating industry megatrends of digitalization, automation, low-/zero-emission propulsion and servitization.

The spin-off of the ‘On-Highway’ assets will maximize management focus and flexibility, align investment priorities and incentives, better meet respective business needs and optimize the cost and capital structure of each company to drive profitable growth. It will further strengthen the leadership positions of both the ‘On-Highway’ and the ‘Off-Highway’ businesses, better position them to achieve their ambitious plan targets as well as optimize their shareholder value creation potential. As the process of separating the two businesses progresses, the financial plan highlights, as well as restructuring actions, will be disaggregated into separate pro-forma plans for each company.

The ‘Off-Highway’ company, with 2018 pro-forma industrial activities revenues of $15.6 billion, will be predominantly an agriculture company (75% of revenue) supported by the construction business (19% of revenue). Specialty vehicles (6% of revenue) will remain within the ‘Off-Highway’ company. Case IH, New Holland Agriculture and STEYR will build on their market positions, further strengthened product line-ups and improved distribution, and accelerated investment in automation and digitalization activities. CASE Construction Equipment and New Holland Construction, as well as ASTRA heavy duty quarry trucks, will focus on improving profitability, product range simplification and growing share in application specific segments. Defense vehicles and Magirus firefighting will further develop their industry leading offerings for their specialized customer base.

The newly listed ‘On-Highway’ company, with 2018 pro-forma industrial activities revenues of $13.1 billion, will comprise the IVECO, IVECO BUS and Heuliez Bus commercial vehicle brands (69% of revenue), together with the FPT Industrial powertrain business (31% of revenue). IVECO brands’ market position and product line-up will be further strengthened with investments in product and technology upgrades. FPT Industrial will continue to offer industry-leading powertrain solutions and accelerate the development of alternative propulsion solutions. FPT Industrial will remain a key supplier to the ‘Off-Highway’ business through a long-term supply agreement.

“The bold plan will lead to the creation of two new global leaders in their respective fields,” said Suzanne Heywood, Chairperson, CNH Industrial. “The Board of Directors strongly supports this ambitious strategy and its confidence is underpinned by the rigorous work undertaken to formulate it.”

“With our ‘Transform 2 Win’ strategy we are setting an exciting new direction for our Company. By developing ambitious yet achievable targets for each segment and reorganizing our structure to create two global leaders, all of our great businesses will be better able to realize their full potential in terms of financial performance, shareholder and broader stakeholder value generation and sustainability commitments,” said Hubertus Mühlhäuser, Chief Executive Officer, CNH Industrial. “Our clear assessment of the key megatrends, that are rapidly changing the business landscape, has led us to embrace this challenge and transform the Company. Benefitting from greater management focus, the two companies will accelerate their innovation, be nimbler in their strategic thinking and actively participate in industry consolidation. This is all thoroughly consistent with our strategic purpose of ‘powering sustainable transformation’.”

The new ‘On-Highway’ company will have a legal structure based on that of CNH Industrial N.V., with the spin-off expected to be completed in early 2021, subject to approval at an Extraordinary General Meeting of shareholders, which is anticipated to be held in H2 2020. CNH Industrial has retained external advisors to support the planned spin-off.

RLDA offers ₹10,000-cr land parcels for development

The Rail Land Development Authority (RLDA) is all set float tenders worth ₹10,000 crore as part of its efforts to monetize land, vice chairman Ved Parkash Dudeja, said adding that the move provide an opportunity to developers to Read More ...

L&T & DB Realty in JV plan 1.4-mn sq ft residential project

Larsen & Toubro's real estate development arm, L&T Realty, is forming an alliance with DB Realty to jointly develop over 1.4 million sq ft residential project in Mumbai's western suburb Malad, said sources, adding that the project Read More ...

Banguluru gets ₹200-cr Bridge in KR Puram

In an attempt to ensure trouble free transport system in the area, the state government in Karnataka has announced the construction of a new bridge between Indiranagar and Medahalli in the KR Puram constituency area in Bangaluru Read More ...

UP approves ₹900-cr for RRTS project in NCR

In a bid to boost regional connectivity in NCR, the UP government has allotted ₹900 crore to country's first Regional Rapid Transit System. Prior to this, Centre has allotted ₹2,487 crore to the project in the union budget for which Read More ...

NEC takes up ₹189-cr Tuensang-Longleng road project

North Eastern Council (NEC) has recently launched the much awaited construction and rehabilitation work on the Tuensang-Longleng road under North East Road Sector Development Scheme (NERSDS) at Nagalempong Zero Point Longleng Read More ...

Aurangabad roads get ₹152-cr road building booster

In response to a proposal sent by the Aurangabad Municipal Corporation in Maharashtra, the state government has cleared ₹152-cr for the development of roads with in the municipal limit, State Urban Development Minister Eknath Shinde Read More ...

Chennai metro gets ₹3,100-cr funding

The state has allocated 3,100 crore for construction of Chennai Metro Rail Project's phase-2 spanning 118.9 km. The state has also requested the Centre to approve funding for the project and provide 50% equity share capital Read More ...

Coastal road worth ₹13,000-cr reaches tunneling stage

Piling and reclamation work for the ₹13,000 crore Coastal Road project is in full swing and the next step is construction of two tunnels in South Mumbai, said MMRDA sources. Digging of the tunnels would begin shortly and will Read More ...

MRIDC steers ₹16,039-cr Pune-Nashik high speed rail project

Maharashtra Railway Infrastructure Development Corporation (MRIDC) has sought approval from the Railway board and the Govt. of Maharashtra for Pune-Nashik semi-high-speed train service, which aims to reduce the travel time between Read More ...

TN takes up 10-km long ₹1,620-cr elevated project

The Tamil Nadu government has decided to construct a 10.1km four-lane flyover on the expressway starting from Uppilipalayam Junction and ending after Kovai Medical Centre Hospital (KMCH). Deputy chief minister and state finance Read More ...

Pune pushes three metro rail projects

The three Metro lines in Pune will become operational by 2022, two of which are being developed by MahaMetro, and the third by the Pune Metropolitan Region Development Authority (PMRDA). Union minister Prakash Javadekar Read More ...

PMRDA plans ₹600-cr two-tier twin flyovers

The Maharashtra government has directed the Pune Metropolitan Regional Development Authority (PMRDA) to build two-tier flyovers comprising a vehicular thoroughfare and a Metro viaduct at three key junctions in the city Read More ...

CMRL unveils fifth metro corridor worth ₹178-cr

Chennai Metro Rail Limited (CMRL), which conducted a feasibility study for the Coimbatore metro rail project, has decided to create a fifth corridor to connect Vellalore and Ukkadam and has also identified two places at Read More ...

Godrej plans residential project on ₹1,359-cr land parcel

Godrej Properties has announced a new project in the residential market of Ashok Vihar in Delhi on a land it has fixed from the Railway Land Development Authority at a value of ₹1,359 crore. The the over 26.58 acre residential Read More ...

UP fast tracks Ganga e-way with ₹2,000-cr infusion

To fastrack the Ganga Expressway, the UP government has infused ₹2000 crore for its construction. One of the longest in India at 637-km, the Expressway will connect Meerut to Prayagraj. In a related development, shortly after Read More ...

BMC speeds up ₹350-cr Versova-Madh bridge project

BMC's long-pending project to build a bridge between Versova and Madh Island is set to kick off with the appointment of a consultant by the civic body. The bridge will bring down travel time from Versova to Madh from 1 hour Read More ...

New Building Material & Construction World

New Building Material & Construction World
MGS Architecture

Modern Green Structures & Architecture

Modern Green Structures & Architecture

Lifting & Specialized Transport

Lifting & Specialized Transport

Indian Infrastructure & Tenders Week

Indian Infrastructure & Tenders Week