Prime Mover Magazine

CNH Industrial annoucnes IVECO spin-off on Wall Street

New York – Industrial conglomerate, CNH Industrial, has announced that it will be separating its ‘on-highway’ divisions including IVECO commercial vehicles and powertrains, from it’s ‘off-highway’ activities such as agricultural and construction equipment manufacturing.

The targeted restructuring will result in the creation of two separate listed entities the company said at its Capital Markets Day at the New York Stock Exchange on Tuesday with full implementation of the separation expected by the end of 2022.

The ‘Transform 2 Win’ plan follows a review of the on-highway and off-highway businesses, namely New Holland agricultural and Case construction equipment.

Each has have identified for their diverging regulatory and customer requirements which will be impacted differently by changing industry trends including automation, emissions, and digitalisation.

The new on-highway company will comprise of IVECO Trucks and light commercials, IVECO Bus and Heuliez Bus along with the PFT powertrain operations.

Prime Mover was in attendance at the announcement and understands the spin-off is expected to be completed in early 2021.

Included in the five year 'Transform 2 Win' plan will be a review of all of IVECO’s global operations.

It is anticipated that this will likely result in the closures of some manufacturing facilities as well as some ambitions projections for sales growth and profit margins.

In 2018 the agriculture and construction businesses of CNH Industrial had proforma sales of $15.6 billion.

On-Highway operations generated $13.1 billion with the group’s most profitable businesses across agricultural equipment and powertrains.

Each delivered margins of 8.9 per cent in contrast with the 2.7 per cent of commercial vehicles.

"The bold plan will lead to the creation of two new global leaders in their respective fields," CNH Industrial chair Suzanne Heywood said.

"The board of directors strongly supports this ambitious strategy and its confidence is underpinned by the rigorous work undertaken to formulate it."

CNH Industrial CEO Hubertus Mühlhäuser said the Transform 2 Win strategy signalled an exciting new direction for the company.

"By developing ambitious yet achievable targets for each segment and reorganising our structure to create two global leaders, all of our great businesses will be better able to realise their full potential in terms of financial performance, shareholder and broader stakeholder value generation and sustainability commitments," he said.

"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."

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