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CNH 4Q23 Results

BASIC INDUSTRIES
  • Neutral for spreads.
  • Revenue miss and outlook concerning, however management are delivering on cost savings and improving margins to cushion earnings.
  • Revenue missed expectations by 7%, -5% YoY. Adj. operating income beat by 3%, +6% YoY.
  • Free cash flow of Industrial Activities $1.216bn vs guidance $1-1.2bn.
  • Sees industrial sales down 8-12% in 2024, vs expectations of -6%. Margins guided to improve further. Guiding FCF to increase to $1.2-1.4bn. Equity likely to take this positively.
  • Industrial leverage remains negligible.
  • Lower risk costs within financial services is a positive, as we have seen in US retail banking results.

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