CNH Industrial CEO Scott Wine said the "great results" in Q2 came from the group capitalising on favourable market fundamentals and solid operational execution.
"Our Agriculture segment set margin records, and for the first quarter in our history, Construction net sales surpassed US$1bn," said Wine. "The CNH Business System is becoming a way of life, engaging our employees in improving processes and removing unnecessary costs. We are transforming the business and expanding our technology investments to drive growth and improve through-cycle margins.”
Global industry volume for construction equipment was down 9% year over year in the second quarter for Heavy construction equipment; Light construction equipment was flat year over year. Aggregated demand increased 8% in North America, was flat in EMEA, decreased 16% in South America and decreased 13% for Asia Pacific (excluding China, Asia Pacific markets decreased 3%).
Construction net sales increased for the quarter by 19% to US$1.06bn, driven by favorable price realisation and positive volume/mix mainly in North America partially offset by lower net sales from South America.
Gross profit margin was 16.0%, up 2.2 p.p. compared to Q2 2022, mainly due to higher volume and favorable price realisation partially offset by higher raw material costs and manufacturing costs.
Adjusted EBIT increased US$38m due to favourable price realisation and favourable volume/mix partially offset by higher production costs, SG&A spend, and R&D investments. Adjusted EBIT margin at 6.8% increased by 300 bps vs. the same quarter of 2022.
Following the Q2 results, CNH Industrial reaffirmed its 2023 outlook for industrial activities that net sales will be up between 8% and 11% year-on-year including currency translation effects.
