CNH Industrial. Francesco RONDINELLI Head of EMEA Purchasing

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1 CNH Industrial Francesco RONDINELLI Head of EMEA Purchasing

2 CNH Industrial the genesis CNH Industrial creation September 2013 September Merger Completed Creation of a global major player in the capital goods sector Integration and simplification of the corporate structure PRE-COMBINATION GROUP STRUCTURE NEW GROUP STRUCTURE Minority Shareholders 100% & ~13% ~87% 100% 100% Agricultural Equipment Construction Equipment Trucks & Commercial Vehicles Powertrain CNH Global N.V.* IVECO FPT Industrial 2

3 CNH Industrial Some figures at WW level 1 group 12 industry recognized brands 48 R&D centers 62 manufacturing facilities 190 national markets 71,192 employees 6,300 individuals dedicated to innovation 7,710 active patents owned $ 5,1* BILLIONS invested in R&D $ 32,7 BILLIONS Net Sales (December 2013) * based on last 5 years IFRS at exchange rate of 1,35 USD/EUR) 3

4 CNH Industrial Our Products are tied together by Common Purpose 4

5 CNH Industrial Group Executive Council (GEC) 5

6 2013 Full Year Results Financial Highlights Data in Revenues ( /bn) Up 4.3% on a constant currency basis, as growth for the Agricultural Equipment, Trucks & CVs and Powertrain was partially offset by more challenging trading conditions for Construction Equipment Flat +1.9% FY 12 FY 13 FY 12 FY 13 Net profit ( /mn) Up 1.9% vs. last year Trading profit ( /mn) Flat y-o-y on a constant currency basis as higher volumes and positive mix in Ag & CE segment and higher revenues and better capacity utilization for Powertrain compensated for Euro VI transitional costs and less favorable product mix and pricing environment in Trucks & CVs segment 2,063 1,985 1,642 1, % FY 12 FY 13 Dec-end 12 Dec-end 13 Net industrial debt ( /mn) 50mn lower than year end 2012 Trading margin 8.0% 7.7% Group available liquidity ( /bn) Down 0.3 p.p. vs. last year -0.3 p.p. Up 0.1bn (inclusive of 1.6bn in undrawn committed facilities) FY 12 FY 13 Dec-end 12 Dec-end

7 CNH Industrial Five-Year Business Plan

8 CNH Industrial The Macro Trends driving our Business 8

9 CNH Industrial Strategic Business Plan Highlights Expand world class agricultural business product portfolio and geographic reach Re-position Construction Equipment brands and return to profitable growth Fully realize the potential of the Commercial Vehicles new product pipeline Leverage industry leading powertrain technologies investments commercial potential Best in class product support and integration of support functions 9

10 CNH Industrial Business Plan Financial Targets Summary (US GAAP) Consolidated Net Income (USD millions) Margin increases 3.1pp % Net Revenue Industrial Activities Operating Margin Note: Net Income and EPS before restructuring for the plan period 10

11 CNH Industrial Business Plan Industrial activities Segment progression 32,7 $bn 1.17X = 5,6 $bn 38,3 $bn Note: CE in negative operating profit position in 2013 Numbers may not add due to rounding 11

12 CNH Industrial Business Plan Industrial activities Sales and Operating Margin (USD billions) Operating Margin increases 2.6pp Industrial Activities Operating Margin Note: Consolidated figures include corporate & eliminations Numbers may not add due to rounding 12

13 CNH Industrial Five-Year Business Plan EMEA REGION

14 EMEA The Largest CNH Industrial Region in Terms of Revenue 2013 revenue of $14.2 billion, 42% of total CNH Industrial revenue 5 segments: AG, CE, CV, PT and Financial Services Commercial branches in 20 countries 33 Manufacturing plants with 46 product lines 26 R&D Centers More than 1,700 dealers and importers: ~3,600 points of sale 14

15 EMEA CNH Industrial is a Leader in the Capital Goods Sector 15

16 EMEA Industrial Footprint 33 Plants Serving 6 Business Units and 46 Product Lines 16

17 EMEA Distribution 20 Countries with Direct Presence and over 1,700 Dealers 17

18 EMEA Agricultural Equipment Tractors Strategy TIV Trend Period Total Industry Volume: Total Industry Value : Increase market share across tractor segment Maintain leadership in specialty segment Leverage India and Turkey sourced tractors to further penetrate MEA markets Focus on the professional farmer Target high horse power segment CVT transmission competence AFS/ Precision farming Extension of RTK network 18

19 EMEA Agricultural Equipment Combines Strategy TIV Trend Period Total Industry Volume: Total Industry Value : Leader in conventional value segment Broadest and most competitive product range in conventional flagship Centers of excellence in Zedelgem and Plock Advanced PLM solutions State of the art service and parts network Focus on larger non-conventional combines segment Unique CVT transmission offering Further professionalization of dealer network, targeting large farmers 19

20 EMEA - Agricultural Equipment Hay and Forage Strategy TIV Trend Period Total Industry Volume: Total Industry Value : Hay & Forage segment represents the largest single opportunity for product line expansion and future growth for the New Holland brand Maintain leadership in large square balers Leverage round balers offering to grow in the livestock segment New investments to complete the offering in implement business Extend the product offering to target large contractors 20

21 EMEA - Construction Equipment Strategy & Top Priorities Consolidate and strengthen the distribution network Reinforce value proposition with focus on product support (Reman, ProCare) and Parts performance Target segments: medium sized customers in building construction segment rental and key accounts in infrastructures and road building Target agriculture/landscaping and small residential segments Expand points of presence through New Holland Agriculture network Leverage on the new compact wheel loader to reinforce the new light range together with SSL, TLB and MHEX 21

22 2018 WW Engine Market Scenario Targeting Best in Class Powertrain Efficiency 22

23 2018 WW Engine Market Scenario Emissions Legislation Evolution 23

24 EMEA - Commercial Vehicles Industrial Footprint 24

25 EMEA Commercial Vehicles Developing at Steady Growth in AME and Recovering in Europe ( 000 units) CAGR Trucks Bus Trucks Bus Europe +3.0% Europe 1.1% CAGR +4.2% 1, CAGR +3.3% Trucks +7.5% AME AME Bus +4.9% Growth Potential in AME will be addressed through the South African JV

26 EMEA Commercial Vehicles Industrial Localization will Support AME Market Development New plant in Rosslyn (Pretoria) Joint-venture (in which IVECO holds 60%) with the LARIMAR Group Location: Rosslyn, near Pretoria in the Automotive Industrial Park Total Area: 182,000 sqm of which 50,000 covered Product lines: Medium, Heavy Trucks and Bus Start of Production: during

27 EMEA Main Drivers for Growth Realize market share potential of EURO VI product launches in Commercial Vehicle segment Re-position Construction Equipment Brands and open New Holland AG network to CE segment Expand commercial presence in Eastern Europe and Africa Fully exploit synergy potential of industrial footprint, common systems and processes 27

28 CNH Industrial Purchasing

29 CNH Industrial WW Purchasing Supplier Performance is Critical to Our Success IVECO AVG TM 53% AVG TM + IC 78% Quality, innovation and performance AG on our products rely in large AVG TM 60% part AVG on TM our + IC 87% suppliers: around 80% of total manufacturing CE cost is made of purchased parts AVG TM % AVG TM + IC % 29

30 CNH Industrial Purchasing Annual Purchase Value WW (Direct & Indirect material) WORLD WIDE EMEA by Sector APV by Geography 15,7 $bn LATAM NAFTA Indirect 10,1 $bn EMEA APV by Sector Indirect 15,7 $bn Highlights EMEA Purchasing represents more than 60% of the World Wide business In the next years we are expecting stable growth driven by the introduction of a series of new products and positive volume trend 30

31 CNH Industrial WW Purchasing Strategic business plan Become the ideal partner for innovation: partnership and long term business collaboration with strategic suppliers early involvement in product development phase Leverage on advance sourcing Introduce a new approach to Quality Promote a culture of Sustainability among employees managing supplier relationships Promote social and environmental responsibility among suppliers Exploit technical cost reduction opportunities: Focus on continuous improvement with increased cross-functional attention Move from crash programs to built-in design to cost in standard development processes Involve suppliers to reinforce partnership Shift focus from direct material cost to full manufacturing cost Streamlining of Supplier base through consolidation, resourcing, new sourcing processes and new commodity strategies, to reduce its fragmentation and minimize related risks Adopt a Best place to buy approach considering cost competitiveness, quality standards and flexibility, exploiting buy back opportunities and leveraging on CNH Industrial worldwide footprint 31

32 CNH Industrial WW Purchasing Supplier partnership Become the ideal partner for innovation: partnership and long term business collaboration with strategic suppliers, early involvement in product development phase Leverage on advance sourcing Introduce a new approach to Quality Promote a culture of sustainability among employees managing supplier relationships Promote social and environmental responsibility among suppliers Exploit technical cost reduction opportunities: Focus on continuous improvement with increased cross-functional attention Move from crash programs to built-in design to cost in standard development processes Involve suppliers to reinforce partnership Build on supplier relationships with strategic and long term business collaboration Stronger focus on global and strategic suppliers Shift focus from direct material cost to full manufacturing cost Streamlining of Supplier base through consolidation, resourcing, new sourcing processes and new commodity strategies, to reduce its fragmentation and minimize related risks Leverage on Advance Purchasing for new products: new APV accounting for more than 50% at the end of the plan period Definition of long term contract for each supplier across CNHi Adopt a «Best place to buy» approach considering cost competitiveness, quality standards and flexibility, exploiting buy back opportunities and leveraging on CNH Industrial worldwide footprint Early involvement in the product development phase to proactively drive and support innovation and cost optimization Complete WCM program implementation 32

33 CNH Industrial WW Purchasing Quality and Sustainability Become the ideal partner for innovation: partnership and long term business collaboration with strategic suppliers, early involvement in product development phase Leverage on advance sourcing Promote a culture of sustainability among employees managing supplier relationships Promote social and environmental responsibility among suppliers Introduce a new approach to Quality SUSTAINABILITY Exploit technical cost reduction Streamlining of Supplier base through opportunities: consolidation, resourcing, new sourcing Focus on continuous improvement with processes and new commodity increased cross-functional attention strategies, to reduce its fragmentation Move HUMAN from crash RIGHTS programs AND to WORKING built-in CONDITIONS and minimize related risks design RESPECT to cost in FOR standard THE ENVIRONMENT development Adopt a «Best place to buy» approach processes BUSINESS ETHICS considering cost competitiveness, quality Involve suppliers to reinforce partnership standards and flexibility, exploiting buy back opportunities and leveraging on Shift focus from direct material cost to full CNH Industrial worldwide footprint manufacturing cost CNH Industrial is a leader in sustainability and promotes relations with suppliers based on open dialogue and collaboration to increase efficiency, improve quality, foster innovation and encourage a shared commitment in reaching sustainability targets QUALITY Implementation of best practices and continuous improvement of quality levels 33

34 CNH Industrial WW Purchasing Technical Cost reduction Focus on continuous improvement with enhanced attention and dedication of resources to Technical Cost Reduction opportunities Become the ideal partner for innovation: partnership and long term business collaboration with strategic suppliers, early involvement in product development phase Leverage on advance sourcing From war room to design to cost Introduce a new approach to Quality Promote a culture of sustainability among employees managing supplier relationships Promote social and environmental responsibility among suppliers TCR meetings with Suppliers for target assignment and regular follow up Same TCR rules / organisation CNHI and technical ideas sharing Benchmark and teardown analysis Supplier reward program Exploit technical cost reduction opportunities: Focus on continuous improvement with increased cross-functional attention Move from crash programs to built-in design to cost in standard development processes Involve suppliers to reinforce partnership Shift focus from direct material cost to full manufacturing cost Streamlining of Supplier base through consolidation, resourcing, new sourcing processes and new commodity strategies, to reduce its fragmentation and minimize related risks Adopt a «Best place to buy» approach considering cost competitiveness, quality standards and flexibility, exploiting buy back opportunities and leveraging on CNH Industrial worldwide footprint 34

35 CNH Industrial WW Purchasing Supply base optimization Continuous identification of best total cost suppliers based on cost competitiveness, quality and footprint, with focus on: Become the ideal partner for innovation: partnership and long term business collaboration with strategic suppliers, early involvement in product development basis phase while optimizing sourcing locally Leverage on advance sourcing Exploit technical cost reduction opportunities: Focus on continuous improvement with increased cross-functional attention Move from crash programs to built-in design to cost in standard development processes Involve suppliers to reinforce partnership Shift focus from direct material cost to full manufacturing cost Introduce a new approach to Quality Promote a culture of sustainability among employees managing supplier relationships Promote social and environmental responsibility among suppliers «Best place to buy» considering also flexibility, delivery costs and quality Pursue common strategies on major commodities and major suppliers on a worldwide BCC suppliers always included in bid list for new sourcing Exploring new opportunities in Eastern Europe Footprint optimization Streamlining of Supplier base through consolidation, resourcing, new sourcing processes and new commodity strategies, to reduce its fragmentation and minimize related risks Adopt a «Best place to buy» approach considering cost competitiveness, quality standards and flexibility, exploiting buy back opportunities and leveraging on CNH Industrial worldwide footprint 35