CNHI Capital Markets Day Highlights

CNHI Capital Markets Presentations

This week was CNH’s Capital Markets Day 2022 where they talked a bit about their business. I focused more on some of the precision and tech areas of their business more than anything.

One of the most interesting slides I thought was this one illustrating the percentage of sales that are New Holland or Case branded by geography:

This slide illustrates some of the best benefits of precision (I especially like the emphasis on ergonomics!):

The emphasis on the combine I think is great. The power the combine has to deliver better outcomes for farmers is exceptional. Between the combine and the sprayer, what precision capabilities can do for profitability and sustainability is really unmatched in the industry (not specific to CNH, just in general). 

Here is the CNH tech stack:

Here is John Deere for comparisons sake:

In Upstream last year I highlighted the benefit of having an entirely in house proprietary tech stack for autonomy (specific to Raven, now apart of CNH) which gives them the ability to control the customer experience from beginning to end.

On top though, they have an open eco system for other “apps” to be able to deliver necessary tools to farmers as we see the demand for precision and analytics amp up: 

One slide that caught my attention specifically was this:

The process doesn’t look new or surprising, but what’s notable is the “future needs”. Being able to make sense of and use the agronomic data collected is an opportunity for CNH. John Deere has talked about this in the past and while I hesitate to say it hasn’t been talked about by CNH, if you look at previous annual reports or investor days, there was more of an emphasis on the physical hardware than the agronomic data itself. This is likely an area for CNH to further partner, or acquire and empower the dealer network as well. 

This week CNH also announced the following:

CNH Industrial Establishes Strategic Investment Arm - Precision Farming Dealer

CNH Industrial announces the formation of its strategic investment arm, CNH Industrial Ventures. This is a further step in the company’s pioneering industry role to accelerate time-to-market for valuable innovations that will boost customer productivity and advance its ESG targets. With the aim of strengthening the company’s position as an innovation leader in the agriculture and construction segments, these investments and collaborations will focus on areas including Alternative Propulsion, Digital, Autonomy, Robotics and other relevant disruptive technologies. 

For more on the rationale behind corporate venture capital investing, I wrote about it last year.

In the context of the CNH presentations, this market forecast for the equipment space stands out: 

Agricultural Robotics Market 2022-2032

It also highlights the expected growth for the market:

The growth and importance of mechanics and equipment in agronomic data acquisition and execution of agronomic outcomes is difficult to ignore. In the February 13th edition of Upstream I highlighted the emphasis of the combine for resistance management and deployment of precision capabilities being even beyond what traditional input companies can do. The implications of this for manufacturers and input retailing is significant when one begins to think about the skill set and tools necessary to continue to thrive and support customers.