CNH Industrial Sets Dividend Target of Up to 35%

By Gilles Castonguay

MILAN--CNH Industrial NV, the newly merged truck and tractor maker whose stock begins trading in New York on Monday, plans to adopt a dividend policy with a potential payout of up to 35% of net profit.

CNH Industrial was formed by Fiat Industrial SpA's (FI.MI) acquisition of its U.S. subsidiary CNH NV (CNH).

According to a slide presentation released Friday, CNH Industrial has set a minimum payout target of EUR150 million.

There would also be the potential to provide other "shareholder friendly distributions," the presentation says without elaborating.

The presentation came as the company's executives meet with potential investors to promote the stock ahead of its listing. The stock will also begin trade in Milan.

It took Fiat Industrial more than a year to buy out CNH shareholders who held the remaining 12% stake that it didn't already own.

Based in Turin, Italy, Fiat Industrial is best known for its Iveco trucks. CNH, whose head offices are near Chicago, makes Case Construction excavators and New Holland tractors.

Fiat Industrial paid a dividend this year of EUR0.225 a share on 2012 results, for a total of EUR275 million. CNH Industrial also confirmed 2013 targets set by its predecessor, including a profit margin of up to 8.3% on revenue of more than EUR24 billion.

CNH Industrial ranks behind Caterpillar Inc (CAT), Volvo AB (VOLV-B.SK) and John Deere Ltd (JDE-YY) in terms of revenue, according to the presentation. In 2012, CNH Industrial would have had revenue of EUR24.7 billion.

The last day of trading in Fiat Industrial shares in Milan is Friday. They were down 1.06% at EUR9.81 at 1427 GMT, giving the company a market capitalization of EUR12.13 billion, according to FactSet.

CNH Industrial is incorporated in the Netherlands and it is seeking fiscal residency in the U.K.

-Write to Gilles Castonguay at [e-mail]; Twitter: @GRCastonguay

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