CNH Introduces New Strategic Business Plan to Boost Product Leadership and Profit Margins

9-May-2025: CNH presented its Strategic Business Plan (SBP) during the Company’s Investor Day 2025. The new plan aims to consolidate CNH’s position as the #1 or #2 player across all major markets, with a strong focus on integrating Iron + Tech. As part of this strategy, the brand is enhancing its go-to-market approach through a new dual-brand dealer strategy. It is also focused on delivering end-to-end quality across all operations.

Key Objectives for 2030

CNH’s Chief Executive Officer, Gerrit Marx, emphasized the strategic goals that will guide the company over the next five years:

• Market Leadership: Consolidate its position as the #1 or #2 player in all major agriculture markets.
• Profitability Growth: Achieve a 16-17% Agriculture mid-cycle adjusted EBIT margin by 2030.
• Cost Efficiency: Deliver over $550 million in operational and quality cost improvements.
• Cash Flow Increase: Enhance industrial cash generation by 25% over the cycle, ensuring greater returns to shareholders.

“We have a clear path to achieve our goals,” said Gerrit Marx. “We are committed to delivering strong growth alongside our cost efficiency targets. We have demonstrated our ability to improve margins consistently, and we will take that to the next level in this new phase of our journey.”

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Breaking New Ground on Iron + Tech

A key pillar of CNH’s new strategy is to advance the integration of Iron + Tech. This involves not only enhancing the physical equipment but also integrating cutting-edge technology like Artificial Intelligence (AI) to deliver superior user experiences.

• Precision Tech Integration: CNH plans to double its Precision Tech sales as a percentage of total Agriculture Net Sales by 2030.
• Product Line Expansions: The company will update and launch new tractors, harvesters, and crop protection equipment. In 2024, CNH introduced its next-generation twin and single rotor combines, offering a 15% reduction in total cost of ownership. Additionally, a full refresh of the tractor lineup (spanning 20 to 700+ horsepower models) is underway, with new product lines to be introduced from 2026 onward.
• Smart Farming: Its Precision Tech includes advanced agronomic sensors, autonomous features, smart implements, and satellite connectivity through its FieldOps™ digital platform, enhancing data synchronization and agronomic insights.

Revamping the Go-to-Market Strategy

CNH is refining its go-to-market strategy to better serve farmers and strengthen its brand identity:

• Dual-Brand Strategy: The brand will continue to strengthen Case IH and New Holland as global brands, while STEYR will focus on the European market. Each brand will serve distinct customer segments.
• Dealer Network Expansion: The company is introducing a ‘New Deal’ with dealers, investing 100 basis points of annual margin over the next five years to promote growth-oriented dealers. This investment will enhance customer service and improve overall engagement.
• AI-Powered Services: The brand is focusing on improving its customer service capabilities with integrated platforms and AI-powered solutions. These will enable predictive maintenance, increased connectivity, and retrofit solutions, guaranteeing 100% uptime and ensuring equipment is “fixed right the first time.”

Expanding EBIT Margins

CNH’s target is to achieve a 16-17% Agriculture mid-cycle adjusted EBIT margin by 2030. This goal will be supported by:

• Margin Expansion Initiatives: These include a higher Precision Tech product mix, operational efficiencies in strategic sourcing, improved plant efficiencies, and optimized manufacturing processes.
• Operational Improvements: The company expects to generate over $550 million in savings from operational and quality enhancements, contributing to overall margin growth.
• Construction Segment: For its construction business, CNH targets a 7-8% mid-cycle adjusted EBIT margin by 2030. This will be driven by product launches, sourcing improvements, and manufacturing efficiencies.

Strengthening the Construction Business

CNH’s Construction segment will focus on continuous growth, market share gains, and margin expansion:

• Brand Strength: Leveraging its well-known brands, including CASE Construction, New Holland Construction, and Eurocomach, the company will introduce new products and technology innovations.
• Digital Integration: The company plans to integrate digital technologies into its construction machinery to offer smarter, more efficient solutions for customers.
• Cost Efficiencies: By optimizing manufacturing and sourcing, the brand aims to drive further cost reductions, creating capacity for future investments and accelerating market growth.

Maximizing Shareholder Returns

CNH’s plan also emphasises delivering increasing value to its shareholders throughout the business cycle.

• Increased Cash Flow: The company plans to increase its industrial cash generation by 25% during the cycle.
• Capital Allocation: After debt repayment and potential mergers and acquisitions, CNH will return substantially all Industrial Free Cash Flow (FCF) to shareholders. This will be done through:
  • Consistent dividends, targeting 25-35% of net income.
  • Share buybacks to increase shareholder value.

The company is committed to preserving its strong balance sheet and investment-grade credit rating while maintaining the flexibility for strategic investments.

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