Reuters — CNH Industrial said on Thursday its 2023 net sales of industrial activities would grow by between six and 10 per cent, after the group posted stronger-than-expected results in the last quarter of 2022.
The industry faced several headwinds in 2022, including a choppy supply chain and inflation, but late in the year these problems began to modestly improve and the trend should continue into 2023, CEO Scott Wine told analysts.
The Italo-American farming and construction machine maker forecast its 2023 free cash flow (FCF) of industrial activities at between $1.3 billion and $1.5 billion, compared with $1.6 billion last year (all figures US$).
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In spite of a lesser impact of inflation on some areas, Wine said price rises would still have to be part of the company’s strategy going into 2023.
Looking further ahead, he said, “we’re not saying that 2024 is going to be a horrible year” but added that “it’s unlikely that this very strong ag (agriculture) markets we’ve experienced for years is going to go on forever.”
The combine harvesters producer has re-positioned itself in recent years to fit its declared aim of feeding a growing world population.
The group has accelerated its investments in agriculture with a focus on automation and precision technology such as driverless tillage or seed-by-seed planting to deliver higher yields, cut costs, and lower its ecological impact.
Agriculture accounted for over 80 per cent of CNH’s industrial revenues in the fourth quarter. Overall sales from industrial activities rose 31 per cent at constant currency to $6.35 billion, pushed by favourable price trends and higher volumes.
Its adjusted operating profit of industrial activities rose to $680 billion, beating analysts’ expectations of $566 million based on a market consensus provided by Intesa Sanpaolo.
Earlier on Thursday the group said it was planning to delist from Milan and keep its shares trading only in New York.
Wine said the company was targeting the sole listing by the end of this year but it could be delayed until 2024.
‘Improvements’
CNH, which will propose an annual cash dividend of about 38 cents per share, also said it welcomed the end of a strike by two local unions at its factories in Wisconsin and Iowa.
The company said Jan. 23 its unionized workers at Racine and Burlington have voted to ratify a “last, best and final” offer it presented following mediation.
About 1,100 workers at the two plants, represented by the United Auto Workers (UAW), had been on strike since early May 2022.
The Racine plant makes Case IH Magnum tractors, transmissions for the company’s Axial-Flow combines and axles and valves for other ag applications. The Burlington plant makes harvest headers for Case IH and New Holland combines; it also makes backhoes, forklifts and crawler dozers.
The UAW, in a separate release Jan. 23, said the deal provides for “wage increases, shift premium increases (and) classification upgrades as well as other improvements.”
“Our negotiators tenaciously bargained to the very end, even fighting for contract improvements in the face of threats from (CNH) to hire permanent strike replacements,” UAW vice-president Chuck Browning said in the release.
— Reporting for Reuters by Federica Urso and Federico Maccioni. Includes files from Glacier FarmMedia Network staff.
