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Iveco Group N.V.
Earnings Release • Feb 8, 2022
7333_iss_2022-02-08_f6b0d5d1-aebe-4a93-845f-21d81fc8635e.pdf
Earnings Release
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Iveco Group 2021 Full Year Combined Results
Iveco Group consolidated revenues of €12.6 billion (up 22% year on year). Net income of €76 million and adjusted EBIT of Industrial Activities of €302 million. Industrial Activities net cash at €1.1 billion.
Unaudited combined financial results presented under EU-IFRS(1)
«Today is our first earnings call as a newly listed company and 2022 is Year 1 for Iveco Group. We started this new chapter encouraged by the tireless effort of our employees, particularly in managing the continued challenges posed by the supply chain and the pandemic: I personally want to thank the entire team. Looking forward, our expectation for the current year is positive. We closed 2021 with a 77% increase in our worldwide order intake, and we are striving to run our production footprint at its full capacity. At the start of our journey as an independent organisation, we have all it takes to deliver on our commitments.»
Gerrit Marx, Chief Executive Officer
2021 Full Year Results
(all amounts € million, unless otherwise stated – comparison vs FY 2020)
| EU-IFRS FINANCIAL MEASURES | NON IFRS FINANCIAL MEASURES (2) | ||||||
|---|---|---|---|---|---|---|---|
| Consolidated revenues | 12,651 | +22% | Adjusted EBIT of Industrial Activities | 302 | +391 | ||
| of which Net revenues of Industrial Activities | 12,520 | +21% | Adjusted EBIT Margin of Industrial Activities | 2.4% | +330 | bps | |
| Net income | 76 | +448 | Adjusted net income | 140 | +307 | ||
| Diluted EPS € | 0.19 | +1.69 | Adjusted diluted EPS € | 0.43 | +1.19 | ||
| Cash flow from operating activities | 539 | -20 | Free cash flow of Industrial Activities | (125) | -7 | ||
| Cash and cash equivalents | 897 | +434 | (*) | Available liquidity | 1,436 | -183 | (*) |
(*) comparison vs 31st December 2020
Net revenues of Industrial Activities of €12,520 million, up 21%, mainly due to higher volumes and positive price realization.
Adjusted EBIT of Industrial Activities of €302 million (€89 million loss in 2020), with €403 million increase in Commercial and Specialty Vehicles. Powertrain adjusted EBIT of €208 million (€195 million in 2020).
Adjusted net income of €140 million, with adjusted diluted earnings per share of €0.43 (adjusted net loss of €167 million in 2020, with adjusted diluted loss per share of €0.76).
Reported income tax expense of €104 million, with adjusted effective tax rate (adjusted ETR(2) ) of 47% for the year ended 31st December 2021. The ETR reflects the impact of unbenefited losses in certain jurisdictions and certain other discrete items.
Free cash flow of Industrial Activities was negative €125 million due to working capital affected by higher inventory driven by supply chain disruptions. Total third-party Debt of €2.7 billion at 31stDecember 2021 (€2.8 billion at 31st December 2020). Industrial Activities net cash(2) position at €1.1 billion, a decrease of €0.1 billion from 31st December 2020.
Available liquidity at €1.4 billion as of 31st December 2021, including net financial receivables from CNH Industrial Post-Demerger.
On 4th January 2022, Iveco Group signed a €1.9 billion syndicated facility, which includes a €1.4 billion committed revolving credit facility with a 5-year tenor with two extension options of 1-year each, as well as a €0.5 billion committed term facility with a 12-month tenor, extendable for up to an additional 12 months at the Company's sole option. On 13th January 2022, Fitch Ratings assigned Iveco Group N.V. a final Long-Term Issuer Default Rating (IDR) of 'BBB-'. The outlook is Stable.
Notes, see page 3
2021 Overall Performance and Results by Segments
Iveco Group recorded a solid performance in 2021 as a result of end-demand for its products rebounding from the first phase of the COVID-19 pandemic and demand for fuel efficient transportation equipment.
Global supply chain represented the main challenge for our operations in the year, with multiple bottlenecks resulting in increased raw material prices, subcomponent availability issues, notably for semiconductors, and increased transportation costs.
Truck order intake in Europe up 81% year over year, with light duty trucks up 76%, and medium & heavy duty trucks up 94%. Truck bookto-bill in Europe at 1.57.
Commercial and Specialty Vehicles
| 2021 | 2020 | Change | European truck market was up 11% year over year, with light-duty trucks | |
|---|---|---|---|---|
| Net revenues | ("LCV") up 8%, and medium and heavy trucks ("M&H") up 19%. South American truck market was up 28% in LCV and up 42% in M&H. Order book |
|||
| (€ million) | 10,318 | 8,247 | +25.1% | is strong across all regions. Bus registrations decreased 1% in Europe and |
| Adjusted EBIT | increased 4% in South America. | |||
| (€ million) | 254 | (149) | +403 | Net revenues were up 25.1%, primarily driven by higher truck volumes and positive price realization. |
| Adjusted EBIT margin | 2.5% | (1.8)% | +430 bps | Adjusted EBIT was €254 million, with Adjusted EBIT margin at 2.5%. The €403 million increase was driven by higher volumes and positive price realization, partially offset by increased raw material costs, freight costs, and rework costs due to components shortages. SG&A costs increase was driven by higher variable compensation. R&D spend returned to more normal levels from the lows of the prior year. |
Powertrain
| 2021 | 2020 | Change | Net revenues were up 17.9% due to higher volumes. Sales to external | |
|---|---|---|---|---|
| Net revenues (€ million) |
3,750 | 3,180 | +17.9% | customer accounted for 61% (67% in 2020). Adjusted EBIT was €208 million, with an increase of €13 million compared to |
| Adjusted EBIT (€ million) |
208 | 195 | +13 | prior year, mainly due to favorable volume and mix in the first half of the year, almost offset by unfavorable raw material costs, higher freight costs due to logistics constraints, higher SG&A costs, and lower absorption of fixed cost in the second half of the year due to certain third-party sales discontinuation. |
| Adjusted EBIT margin | 5.5% | 6.1% | -60 bps |
Adjusted EBIT margin at 5.5%. R&D spend returned to a pre-pandemic level. |
Financial Services
| 2021 | 2020 | Change | Net revenues were up €30 million primarily due to higher volumes from | |
|---|---|---|---|---|
| Net revenues | financing activities. | |||
| (€ million) | 195 | 165 | +18.2% | Net income increased €46 million to €59 million, primarily due to higher volumes from financing activities in 2021 and lower risk costs reflecting better |
| Net income | conditions after 2020 COVID-19 pandemic peak. | |||
| (€ million) | 59 | 13 | +46 | The managed portfolio (including unconsolidated joint ventures) was |
| Equity at year-end | €5.4 billion at the end of the year (of which retail was 51% and wholesale 49%), up €0.1 billion compared to 31st December 2020. The receivable balance |
|||
| (€ million) | 740 | 705 | +35 | greater than 30 days past due as a percentage of portfolio was 3.9% (5.8% as |
| Retail loan originations | of 31st December 2020). | |||
| (€ million) | 1,422 | 1,380 | flat |
Notes
- (1) The financial information provided in this press release has been prepared to represent the combined historical results of operations, financial position and cash flows of the Iveco Group Business structure that is now controlled by Iveco Group N.V. following the demerger (the "Demerger") of CNH Industrial N.V. occurred on 1 st January 2022. This financial information has been derived from the consolidated financial statements and accounting records of CNH Industrial. The IFRS financial measures for the year ended 31st December 2020 have been derived from the audited Combined Financial Statements included in the Iveco Group N.V. Prospectus, published on 11th November 2021. The financial information included in this press release (1) is presented based on information currently available, (2) is intended for informational purposes, only, (3) is not necessarily indicative of and does not purport to represent what the Iveco Group operating results would have been had the Demerger occurred as described or what the future operating results will be after having given effect to the Demerger and (4) does not reflect any actions that might be taken by management after the Demerger.
- (2) Non-IFRS financial measures: refer to the "Non-IFRS Financial Information" section of this press release for information regarding non-IFRS financial measures. Refer to the specific table in the "Other Supplemental Financial Information" section of this press release for the reconciliation between the non-IFRS financial measure and the most comparable IFRS financial measure.
Non-IFRS Financial Information
Iveco Group monitors its operations through the use of several non-IFRS financial measures. Iveco Group's management believes that these non-IFRS financial measures provide useful and relevant information regarding its operating results and enhance the readers' ability to assess Iveco Group's financial performance and financial position. Management uses these non-IFRS measures to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions as they provide additional transparency with respect to our core operations. These non-IFRS financial measures have no standardized meaning under EU-IFRS and are unlikely to be comparable to other similarly titled measures used by other companies and are not intended to be substitutes for measures of financial performance and financial position as prepared in accordance with EU-IFRS.
Iveco Group's non-IFRS financial measures are defined as follows:
- Adjusted EBIT: is defined as EBIT before restructuring costs and non-recurring items. In particular, non-recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going operational activities.
- Adjusted Net Profit/ (Loss): is defined as net profit/ (loss), less restructuring costs and non-recurring items, after tax.
- Adjusted Diluted EPS: is computed by dividing Adjusted Net Income (loss) attributable to Iveco Group N.V. by a weighted-average number of common shares outstanding during the period that takes into consideration potential common shares outstanding deriving from the Iveco Group share-based payment awards, when inclusion is not anti-dilutive. When we provide guidance for adjusted diluted EPS, we do not provide guidance on an earnings per share basis because the IFRS measure will include potentially significant items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end.
- Adjusted Income Taxes: is defined as income taxes less the tax effect of restructuring expenses and non-recurring items, and non-recurring tax charges or benefits. • Adjusted Effective Tax Rate (Adjusted ETR): is computed by dividing a) adjusted income taxes by b) income (loss) before income taxes, less restructuring expenses and non-recurring items.
- Net Cash (Debt) and Net Cash (Debt) of Industrial Activities: Net Cash (Debt) is defined as total Debt plus Derivative liabilities, net of Cash and cash equivalents, Current securities, Derivative assets and other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties) and net financial amounts receivable from the CNH Industrial Group Post-Demerger. Iveco Group provides the reconciliation of Net Cash (Debt) to Total (Debt), which is the most directly comparable EU-IFRS financial measure included in the Group's consolidated statement of financial position. Due to different sources of cash flows used for the repayment of the debt between Industrial Activities and Financial Services (by cash from operations for Industrial Activities and by collection of financing receivables for Financial Services), management separately evaluates the cash flow performance of Industrial Activities using Net Cash (Debt) of Industrial Activities.
- Free Cash Flow of Industrial Activities (or Industrial Free Cash Flow): refers to Industrial Activities, only, and is computed as consolidated cash flow from operating activities less: cash flow from operating activities of Financial Services; investments of Industrial Activities in property, plant and equipment and intangible assets; as well as other changes and intersegment eliminations.
- Available Liquidity: is defined as cash and cash equivalents, including restricted cash, undrawn medium-term unsecured committed facilities, other current financial assets (primarily current securities, short-term deposits and investments towards high-credit rating counterparties), and net financial amounts receivable from CNH Industrial Group Post-Demerger.
Forward-looking statements
All statements other than statements of historical fact contained in this earning release, including competitive strengths; business strategy; future financial position or operating results; budgets; projections with respect to revenue, income, earnings (or loss) per share, capital expenditures, dividends, liquidity, capital structure or other financial items; costs; and plans and objectives of management regarding operations and products, are forward-looking statements. Forward looking statements also include statements regarding the future performance of Iveco Group and its subsidiaries on a standalone basis. These statements may include terminology such as "may", "will", "expect", "could", "should", "intend", "estimate", "anticipate", "believe", "outlook", "continue", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "prospects", "plan", or similar terminology. Forward-looking statements, including those related to the COVID-19 pandemic, are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside our control and are difficult to predict. If any of these risks and uncertainties materialize (or they occur with a degree of severity that the Company is unable to predict) or other assumptions underlying any of the forwardlooking statements prove to be incorrect, including any assumptions regarding strategic plans, the actual results or developments may differ materially from any future results or developments expressed or implied by the forward-looking statements. Factors, risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others: the continued uncertainties related to the unknown duration and economic, operational and financial impacts of the global COVID-19 pandemic and the actions taken or contemplated by governmental authorities or others in connection with the pandemic on our business, our employees, customers and suppliers; supply chain disruptions, including delays caused by mandated shutdowns, industry capacity constraints, material availability, and global logistics delays and constraints; disruption caused by business responses to COVID-19, including remote working arrangements, which may create increased vulnerability to cybersecurity or data privacy incidents; our ability to execute business continuity plans as a result of COVID-19; the many interrelated factors that affect
consumer confidence and worldwide demand for capital goods and capital goods-related products, including demand uncertainty caused by COVID-19; general economic conditions in each of our markets, including the significant economic uncertainty and volatility caused by COVID-19; travel bans, border closures, other free movement restrictions, and the introduction of social distancing measures in our facilities may affect in the future our ability to operate as well as the ability of our suppliers and distributors to operate; changes in government policies regarding banking, monetary and fiscal policy; legislation, particularly pertaining to capital goods-related issues such as agriculture, the environment, debt relief and subsidy program policies, trade and commerce and infrastructure development; government policies on international trade and investment, including sanctions, import quotas, capital controls and tariffs; volatility in international trade caused by the imposition of tariffs, sanctions, embargoes, and trade wars; actions of competitors in the various industries in which we compete; development and use of new technologies and technological difficulties; the interpretation of, or adoption of new, compliance requirements with respect to engine emissions, safety or other aspects of our products; production difficulties, including capacity and supply constraints and excess inventory levels; labor relations; interest rates and currency exchange rates; inflation and deflation; energy prices; prices for agricultural commodities; housing starts and other construction activity; our ability to obtain financing or to refinance existing debt; price pressure on new and used vehicles; the resolution of pending litigation and investigations on a wide range of topics, including dealer and supplier litigation, follow-on private litigation in various jurisdictions after the settlement of the EU antitrust investigation of the Iveco Group announced on 19th July 2016, intellectual property rights disputes, product warranty and defective product claims, and emissions and/or fuel economy regulatory and contractual issues; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of Iveco Group and its suppliers and dealers; security breaches with respect to our products; our pension plans and other post-employment obligations; further developments of the COVID-19 pandemic on our operations, supply chains, distribution network, as well as negative evolutions of the economic and financial conditions at global and regional levels; political and civil unrest; volatility and deterioration of capital and financial markets, including other pandemics, terrorist attacks in Europe and elsewhere; our ability to realize the anticipated benefits from our business initiatives as part of our strategic plan; our failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures, strategic alliances or divestitures and other similar risks and uncertainties, and our success in managing the risks involved in the foregoing.
Forward-looking statements are based upon assumptions relating to the factors described in this earnings release, which are sometimes based upon estimates and data received from third parties. Such estimates and data are often revised. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside Iveco Group's control. Iveco Group expressly disclaims any intention or obligation to provide, update or revise any forwardlooking statements in this announcement to reflect any change in expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. Further information concerning Iveco Group, including factors that potentially could materially affect Iveco Group's financial results, is included in Iveco Group's reports and filings with the Autoriteit Financiële Markten ("AFM") and Commissione Nazionale per le Società e la Borsa ("CONSOB").
Conference Call and Webcast
Today, at 4.45 p.m. CET / 3.45 p.m. GMT/ 10.45 a.m. EST, management will hold a conference call to present the full year 2021 combined financial results to financial analysts and institutional investors. The call can be followed live online at https://bit.ly/IVG\_2021\_Combined\_FY\_Results and a recording will be available later on the Company's website www.ivecogroup.com. A presentation will be made available on the Company's website prior to the call.
Contacts
Media: Investor Relations: Francesco Polsinelli, Tel: +39 335 1776091 Federico Donati, Tel: +39 011 0073539 Fabio Lepore, Tel: +39 335 7469007 E-mail: [email protected] E-mail: [email protected]
Iveco Group N.V. Condensed Combined Income Statement for the years ended 31st December 2021 and 2020 (Unaudited)
| (€ million) | 2021 | 2020 |
|---|---|---|
| Net revenues vs third parties | 11,850 | 9,885 |
| Net revenues vs CNH Industrial Group Post-Demerger | 801 | 526 |
| Net revenues | 12,651 | 10,411 |
| Cost of sales | 10,881 | 9,462 |
| Selling, general and administrative costs | 825 | 705 |
| Research and development costs | 481 | 436 |
| Result from investments: | 27 | (43) |
| Share of the profit/(loss) of investees accounted for using the equity method | 27 | (43) |
| Gains/(losses) on the disposal of investments | 8 | - |
| Restructuring costs | 36 | 32 |
| Other income/(expenses) | (168) | (109) |
| EBIT | 295 | (376) |
| Financial income/(expenses) | (115) | (112) |
| PROFIT/(LOSS) BEFORE TAXES | 180 | (488) |
| Income tax (expense) benefit | (104) | 116 |
| PROFIT/(LOSS) FROM CONTINUING OPERATIONS | 76 | (372) |
| PROFIT/(LOSS) FOR THE PERIOD | 76 | (372) |
| PROFIT/(LOSS) FOR THE PERIOD ATTRIBUTABLE TO: | ||
| Owners of the parent | 52 | (408) |
| Non-controlling interests | 24 | 36 |
| (in €) | ||
| Earning (loss) per share attributable to common shareholders | ||
| Basic | 0.19 | (1.50) |
| Diluted | 0.19 | (1.50) |
Iveco Group N.V.
Condensed Combined Statement of Financial Position as of 31st December 2021 and 2020 (Unaudited)
| (€ million) | 31st December 2021 | 31st December 2020 |
|---|---|---|
| ASSETS | ||
| Intangible assets | 1,314 | 1,260 |
| Property, plant and equipment and Leased assets | 3,113 | 3,105 |
| Inventories | 2,651 | 2,246 |
| Financial receivables from CNH Industrial Group Post-Demerger | 3,520 | 3,543 |
| Receivables from financing activities | 2,909 | 2,831 |
| Cash and cash equivalents | 897 | 463 |
| Other receivables and assets | 2,156 | 2,183 |
| TOTAL ASSETS | 16,560 | 15,631 |
| EQUITY AND LIABILITIES | ||
| Invested capital and reserves attributable to owners of the parent | 2,289 | 2,268 |
| Non-controlling interests | 22 | 68 |
| Total Equity | 2,311 | 2,336 |
| Debt payables to CNH Industrial Group Post-Demerger | 3,076 | 2,563 |
| Other debt | 2,709 | 2,750 |
| Other payables and liabilities | 8,464 | 7,982 |
| Total Liabilities | 14,249 | 13,295 |
| TOTAL EQUITY AND LIABILITIES | 16,560 | 15,631 |
Iveco Group N.V.
Condensed Combined Statement of Cash Flows for the year ended 31st December 2021 and 2020 (Unaudited)
| (€ million) | 2021 | 2020 |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 463 | 417 |
| Profit/(loss) | 76 | (372) |
| Adjustment to reconcile profit/(loss) to cash flows from/(used in) operating activities | 463 | 931 |
| CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES | 539 | 559 |
| CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES | (45) | (90) |
| CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES | (88) | (407) |
| Translation exchange differences | 28 | (16) |
| TOTAL CHANGE IN CASH AND CASH EQUIVALENTS | 434 | 46 |
| CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 897 | 463 |
Iveco Group N.V.
Supplemental Combined Statements of Operations for the years ended 31st December 2021 and 2020 (Unaudited)
| 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||
| (2) | (2) | 9,885 | |||||||
| 526 | |||||||||
| (2) | (2) | 10,411 | |||||||
| (3) | (3) | 9,462 | |||||||
| 705 | |||||||||
| 436 | |||||||||
| (43) | |||||||||
| 13 | 14 | - | 27 | (57) | 14 | - | (43) | ||
| 8 | - | - | 8 | - | - | - | - | ||
| 36 | - | - | 36 | 32 | - | - | 32 | ||
| (168) | - | - | (168) | (110) | 1 | - | (109) | ||
| 221 | 74 | - | 295 | (391) | 15 | - | (376) | ||
| (115) | - | - | (115) | (112) | - | - | (112) | ||
| 106 | 74 | - | 180 | (503) | 15 | - | (488) | ||
| (89) | (15) | - | (104) | 118 | (2) | - | 116 | ||
| (372) | |||||||||
| 17 | 59 | - | 76 | (385) | 13 | - | (372) | ||
| 11,763 757 12,520 10,866 769 481 13 17 |
151 44 195 79 56 - 14 59 |
(64) - (64) (64) - - - - |
2021 11,850 801 12,651 10,881 825 481 27 76 |
9,833 481 10,314 9,425 645 436 (57) (385) |
120 45 165 105 60 - 14 13 |
(68) - (68) (68) - - - - |
Notes:
(1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes Commercial and Specialty Vehicles and Powertrain segments, as well as the holding company Iveco Group N.V.
(2) Elimination of Financial Services' interest income earned from Industrial Activities. (3) Elimination of Industrial Activities' interest expense to Financial Services.
Iveco Group N.V.
Supplemental Combined Statement of Financial Position as of 31st December 2021 and 2020 (Unaudited)
| 31st December 2021 | 31st December 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (€ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | ||
| ASSETS | ||||||||||
| Intangible assets | 1,301 | 13 | - | 1,314 | 1,247 | 13 | - | 1,260 | ||
| Property, plant and equipment and Leased assets | 3,077 | 36 | - | 3,113 | 3,060 | 45 | - | 3,105 | ||
| Inventories | 2,650 | 1 | - | 2,651 | 2,244 | 2 | - | 2,246 | ||
| Financial receivables from CNH Industrial Group Post-Demerger |
2,896 | 624 | - | 3,520 | 3,125 | 418 | - | 3,543 | ||
| Receivables from financing activities | 67 | 2,954 | (112) | (2) | 2,909 | 80 | 2,897 | (146) | (2) | 2,831 |
| Cash and cash equivalents | 726 | 171 | - | 897 | 366 | 97 | - | 463 | ||
| Other receivables and assets | 1,869 | 345 | (58) | (3) | 2,156 | 1,924 | 319 | (60) | (3) | 2,183 |
| TOTAL ASSETS | 12,586 | 4,144 | (170) | 16,560 | 12,046 | 3,791 | (206) | 15,631 | ||
| EQUITY AND LIABILITIES | ||||||||||
| Invested capital and reserves attributable to owners of the parent |
1,549 | 740 | - | 2,289 | 1,563 | 705 | - | 2,268 | ||
| Non-controlling interests | 22 | - | - | 22 | 68 | - | - | 68 | ||
| Total Equity | 1,571 | 740 | - | 2,311 | 1,631 | 705 | - | 2,336 | ||
| Debt payables to CNH Industrial Group Post Demerger |
2,370 | 706 | - | 3,076 | 2,192 | 371 | - | 2,563 | ||
| Other debt | 291 | 2,530 | (112) | (2) | 2,709 | 321 | 2,575 | (146) | (2) | 2,750 |
| Other payables and liabilities | 8,354 | 168 | (58) | (3) | 8,464 | 7,902 | 140 | (60) | (3) | 7,982 |
| Total Liabilities | 11,015 | 3,404 | (170) | 14,249 | 10,415 | 3,086 | (206) | 13,295 | ||
| TOTAL EQUITY AND LIABILITIES | 12,586 | 4,144 | (170) | 16,560 | 12,046 | 3,791 | (206) | 15,631 | ||
Notes:
(1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes Commercial and Specialty Vehicles and Powertrain segments, as well as the holding company Iveco Group N.V.
(2) This item includes the elimination of receivables/payables between Industrial Activities and Financial Services.
(3) This item primarily represents the reclassification of deferred taxes assets/liabilities in the same taxing jurisdiction and elimination of intercompany activity between Industrial Activities and Financial Services.
Iveco Group N.V. Supplemental Combined Statement of Cash Flows for the years ended 31st December 2021 and 2020
(Unaudited)
| 2021 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|
| (€ million) | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated | Industrial Activities(1) |
Financial Services |
Eliminations | Consolidated |
| CASH AND CASH EQUIVALENTS AT BEGINNING | ||||||||
| OF THE YEAR | 366 | 97 | - | 463 | 271 | 146 | - | 417 |
| Profit/(loss) | 17 | 59 | - | 76 | (385) | 13 | - | (372) |
| Adjustment to reconcile profit/(loss) to cash flows | ||||||||
| from/(used in) operating activities | 460 | 5 | (2) | 463 | 893 | 38 | - | 931 |
| CASH FLOWS FROM/(USED IN) OPERATING | ||||||||
| ACTIVITIES | 477 | 64 | (2) | 539 | 508 | 51 | - | 559 |
| CASH FLOWS FROM/(USED IN) INVESTING | ||||||||
| ACTIVITIES | (85) | 35 | 5 | (45) | (308) | 218 | - | (90) |
| CASH FLOWS FROM/(USED IN) FINANCING | ||||||||
| ACTIVITIES | (61) | (24) | (3) | (88) | (86) | (321) | - | (407) |
| Translation exchange differences | 29 | (1) | - | 28 | (19) | 3 | - | (16) |
| TOTAL CHANGE IN CASH AND CASH | ||||||||
| EQUIVALENTS | 360 | 74 | - | 434 | 95 | (49) | - | 46 |
| CASH AND CASH EQUIVALENTS AT END OF | ||||||||
| THE YEAR | 726 | 171 | - | 897 | 366 | 97 | - | 463 |
Notes:
(1) Industrial Activities represents the enterprise without Financial Services. Industrial Activities includes Commercial and Specialty Vehicles and Powertrain segments, as well as the holding company Iveco Group N.V.
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of EBIT to Adjusted EBIT by segment (€ million) |
|||||||
|---|---|---|---|---|---|---|---|
| 2021 | |||||||
| Commercial and Specialty Vehicles |
Powertrain | Unallocated items, eliminations and other |
Total Industrial Activities |
Financial Services | Eliminations | Total | |
| EBIT | 239 | 206 | (224) | 221 | 74 | - | 295 |
| Adjustments: | |||||||
| Restructuring costs | 34 | 2 | - | 36 | - | - | 36 |
| Other discrete items(1) | (19) | - | 64 | 45 | - | - | 45 |
| Adjusted EBIT | 254 | 208 | (160) | 302 | 74 | - | 376 |
| 2020 | |||||||
| Commercial and Specialty Vehicles |
Powertrain | Unallocated items, eliminations and other |
Total Industrial Activities |
Financial Services | Eliminations | Total | |
| EBIT | (437) | 181 | (135) | (391) | 15 | - | (376) |
| Adjustments: | |||||||
| Restructuring costs | 18 | 14 | - | 32 | - | - | 32 |
| Other discrete items(1) | 270 | - | - | 270 | - | - | 270 |
| Adjusted EBIT | (149) | 195 | (135) | (89) | 15 | - | (74) |
(1) In the year ended 31st December 2021, this item includes the pre- and after-tax gain of €8 million from the sale of the 30.1% interest in Naveco, as well as the positive impact of €11 million from the sale of investments by a joint venture accounted for under the equity method, presented in column "Commercial and Specialty Vehicles". This item also includes €43 million separation costs in connection with the spin-off of the Iveco Group business, and a loss of €21 million due to the valuation, at their recoverable amount, of certain assets classified as held for sale presented in column "Unallocated items, eliminations and other". In the year ended 31st December 2020, this item primarily included asset optimization charges of €247 million, other asset impairment charges of €6 million, and €17 million negative impact from the costs recognized by a Chinese joint venture, accounted for under the equity method, for valuation allowances against deferred tax assets and restructuring actions.
(Unaudited)
Reconciliation of Total (Debt) to Net Cash (Debt)
| (€ million) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Consolidated | Industrial Activities | Financial Services | ||||||
| 31st December 2021 |
31st December 2020 |
31st December 2021 |
31st December 2020 |
31st December 2021 |
31st December 2020 |
|||
| Third party (debt) | (2,709) | (2,750) | (220) | (235) | (2,489) | (2,515) | ||
| Intersegment notes payable(1) | - | - | (71) | (86) | (41) | (60) | ||
| (Debt) payables to CNH Industrial Group Post Demerger(2) |
(3,076) | (2,563) | (2,370) | (2,192) | (706) | (371) | ||
| Total (Debt) | (5,785) | (5,313) | (2,661) | (2,513) | (3,236) | (2,946) | ||
| Cash and cash equivalents | 897 | 463 | 726 | 366 | 171 | 97 | ||
| Intersegment notes receivables(1) | - | - | 41 | 60 | 71 | 86 | ||
| Financial receivables from CNH Industrial Group Post Demerger(3) |
3,520 | 3,543 | 2,896 | 3,125 | 624 | 418 | ||
| Other current financial assets(4) | 54 | 128 | 54 | 128 | - | - | ||
| Derivatives assets(5) | 50 | 28 | 49 | 21 | 1 | 7 | ||
| Derivatives liabilities(5) | (43) | (27) | (42) | (22) | (1) | (5) | ||
| Net Cash (Debt)(6) | (1,307) | (1,178) | 1,063 | 1,165 | (2,370) | (2,343) |
(1) As a result of the role played by the central treasury, debt for Industrial Activities also includes funding raised by the central treasury on behalf of Financial Services (included under Intersegment financial receivables). Intersegment financial receivables for Financial Services, on the other hand, represent loans or advances to Industrial Activities – for receivables sold to Financial Services that do not meet the derecognition requirements – as well as cash deposited temporarily with the central treasury. Total Debt of Industrial Activities includes Intersegment notes payable to Financial Services of €71 million and €86 million as of 31 December 2021, and 2020, respectively. Total Debt of Financial Services includes Intersegment notes payable to Industrial Activities of €41 million and €60 million as of 31 December 2021, and 2020, respectively.
(2) It mainly includes overdraft and advances/utilizations under cash management and/or cash pooling arrangements and loans granted by the CNH Industrial Group Post-Demerger central treasury. (3) It mainly refers to cash balances deposited with the CNH Industrial Group Post-Demerger central treasury, including cash management and/or cash pooling arrangements.
(4) This item includes short-term deposits and investments towards high-credit rating counterparties.
(5) Derivative assets and Derivative liabilities include, respectively, the positive and negative fair values of derivative financial instruments.
(6) The net intersegment receivable/(payable) balance recorded by Financial Services relating to Industrial Activities was €30 million and €26 million as of 31 December 2021 and 2020, respectively.
| (€ million) | Reconciliation of Cash and cash equivalents to Available liquidity | ||
|---|---|---|---|
| 31st December 2021 | 31st December 2020 | ||
| Cash and cash equivalents | 897 | 463 | |
| Undrawn committed facilities | 41 | 48 | |
| Other current financial assets(1) | 54 | 128 | |
| Net financial receivables from CNH Industrial Group Post-Demerger(2) | 444 | 980 | |
| Available liquidity | 1,436 | 1,619 | |
| (1) (2) |
This item includes short-term deposits and investments towards high-credit rating counterparties. This item includes cash deposited in the central treasury of CNH Industrial Post-Demerger. |
Other Supplemental Financial Information
(Unaudited)
| Change in Net Cash (Debt) of Industrial Activities (€ million) |
||
|---|---|---|
| 2021 | 2020 | |
| Net Cash (Debt) of Industrial Activities at beginning of period | 1,165 | 1,302 |
| Adjusted EBIT of Industrial Activities | 302 | (89) |
| Depreciation and Amortization | 565 | 578 |
| Depreciation of assets under operating leases and assets sold with buy-back commitments | 227 | 249 |
| Cash interest and taxes | (155) | (77) |
| Changes in provisions and similar(1) | (159) | (350) |
| Change in working capital | (303) | 197 |
| Operating cash flow of Industrial Activities | 477 | 508 |
| Investments in property, plant and equipment, and intangible assets(2) | (563) | (400) |
| Other changes | (39) | (226) |
| Free Cash Flow of Industrial Activities | (125) | (118) |
| Capital increases and dividends | - | - |
| Currency translation differences and other | 23 | (19) |
| Change in Net Cash (Debt) of Industrial Activities | (102) | (137) |
| Net Cash (Debt) of Industrial Activities at end of period | 1,063 | 1,165 |
Reconciliation of Net cash provided by (used in) Operating Activities to Free Cash Flow of Industrial Activities (€ million)
| 2021 | 2 2020 |
|
|---|---|---|
| Net cash provided by (used in) Operating Activities | 539 | 0 559 2 |
| Less: Cash flows from Operating Activities of Financial Services net of eliminations | (62) | 0 (51) |
| Operating cash flow of Industrial Activities | 477 | 508 |
| Investments in property, plant and equipment, and intangible assets of Industrial Activities | (563) | (400) |
| Other changes (1) | (39) | (226) |
| Free Cash Flow of Industrial Activities | (125) | (118) |
| (1) This item primarily includes change in intersegment financial receivables and capital increases in intersegment investments. |
Other Supplemental Financial Information
(Unaudited)
| Reconciliation of Adjusted net profit/(loss) and Adjusted income tax (expense) benefit to Consolidated Profit/(loss) and Income tax (expense) benefit and calculation of Adjusted diluted EPS and Adjusted ETR |
||
|---|---|---|
| (€ million, except per share data) | ||
| 2021 | 2020 | |
| Profit /(loss) | 76 | (372) |
| Adjustments impacting Profit/ (loss) before income tax (expense) benefit (a) | 84 | 302 |
| Adjustments impacting Income tax (expense) benefit (b) | (20) | (97) |
| Adjusted net profit/ (loss) | 140 | (167) |
| Adjusted net profit/ (loss) attributable to Iveco Group N.V. | 116 | (206) |
| Weighted average shares outstanding – diluted (million) | 271 | 271 |
| Adjusted diluted EPS (€) | 0.43 | (0.76) |
| Profit/ (loss) before taxes | 180 | (488) |
| Adjustments impacting Profit/ (loss) before income tax (expense) benefit (a) | 84 | 302 |
| Adjusted profit/ (loss) before income tax (expense) benefit (A) | 264 | (186) |
| Income tax (expense) benefit | (104) | 116 |
| Adjustments impacting Income tax (expense) benefit (b) | (20) | (97) |
| Adjusted income tax (expense) benefit (B) | (124) | |
| Adjusted Effective Tax Rate (Adjusted ETR) (C=B/A) | 47% | 10% |
| a) Adjustments impacting Profit/(loss) before income tax (expense) benefit | ||
| Restructuring costs | 36 | |
| Spin-off costs | 46 | |
| Impairment of certain assets held for sale | 21 | |
| Other assets impairment charges | - | |
| Asset optimization charges | - | 247 |
| Gain from the sale of 30.1% interest in Naveco | (8) | |
| Non-recurring expense (income) recognized by Chinese joint ventures(1) | (11) | |
| Total | 84 | 302 |
| b) Adjustments impacting Income tax (expense) benefit | ||
| Tax effect of adjustments impacting income tax (expense) benefit | (17) | (57) |
| Net discrete tax benefit | (3) | (40) |
| Total | (20) | (97) |
(1) In 2021, this item included the positive impact from the sale of investments of a Chinese joint venture accounted for under the equity method. In 2020, this item included the negative impact from the costs recognized by a Chinese joint venture, accounted for under the equity method, for valuation allowances against deferred tax assets and restructuring actions.
Translation of financial statements denominated in a currency other than the Euro
The principal exchange rates used to translate into Euro the financial statements prepared in currencies other than the Euro were as follows:
| Average 2021 | At 31st December 2021 | Average 2020 | At 31st December 2020 | |
|---|---|---|---|---|
| U.S. dollar | 1.183 | 1.133 | 1.142 | 1.227 |
| Pound sterling | 0.860 | 0.840 | 0.890 | 0.899 |
| Swiss franc | 1.081 | 1.033 | 1.071 | 1.080 |
| Brazilian real | 6.378 | 6.310 | 5.894 | 6.373 |
| Polish Zloty | 4.565 | 4.597 | 4.443 | 4.560 |
| Czeck Koruna | 25.640 | 24.858 | 26.455 | 26.242 |
| Argentine peso(1) | 116.239 | 116.239 | 103.043 | 103.043 |
(1) From July 1, 2018, Argentina's economy was considered to be hyperinflationary. After the same date, transactions for entities with the Argentine peso as the functional currency were translated using the closing spot rate.