- First
time disclosure of performance and plan for its five Business
Units: Truck, Bus, Defence, Powertrain and Financial
Services
- Transfer
of ownership of MAGIRUS Firefighting Business Unit to Mutares;
closing by January 2025
- Key
financial targets of Industrial Activities for 2028 include: Net
Revenues of approximately €19 billion, Adj. EBIT margin of 7 to 8%,
Free Cash Flow of approximately €0.9 billion. At Group level: Adj.
Net Income of approximately €0.9 billion and Adj. diluted EPS
exceeding €3 per share
- New
partnership announced with Ford Otosan on Heavy-Duty Truck cabin
structures
-
Strategic Partnership with Hyundai Motor Company extended
and deepened
Turin, 14th March 2024. Iveco Group presents a
new Strategic Plan, outlining objectives up to 2028 during the
Company’s Capital Markets Day held today in Turin, Italy.
The decision to hold a Capital Markets Day two
years after its first Investor Day in November 2021, was driven by
the Group’s recent achievements: by the end of 2023, Iveco Group
had already met its key targets for 2026, or was ahead of the
previous trajectory.
In its prior strategic plan from 2021, Iveco
Group targeted total Net Revenues of Industrial Activities at
between €16.5 and €17.5 billion by 2026 and it achieved €15.9
billion by year-end 2023, proving to be fully on track. The 2026
Adjusted EBIT margin of Industrial Activities was to reach between
5 and 6% (from 3.6% in 2019) which the Company already achieved in
2023. For the Free Cash Flow from Industrial Activities, Iveco
Group targeted €500 million in 2026 and already reached more than
€400 million in 2023, ahead of the previous target trajectory.
These are outcomes largely attributable to the
company’s focused delivery and ‘one team’ approach, which unites
its global workforce of over 36,000 employees towards a common
purpose.
Gerrit Marx, CEO, Iveco Group, said, “The first
of our values states that ‘we go beyond the obvious’. It embodies
the soul of our Group and clearly reflects our ambition to
consciously push limits and courageously set out on new pathways.
We have demonstrated that we can fulfil the promises we make. Today
we commit ourselves to a new plan, an acceleration of our product
portfolio, stronger and more diverse partnerships, and a dial up
our sustainability journey. We will deliver these commitments
because the pathways and opportunities in front of us and our five
business units are exciting and unlimited. Moreover, while we are
drawing upon possibilities internally, we will continue exploring
powerful opportunities outside. We will always go beyond the
obvious.”
The key strategic pillars for future
growthThe Group’s pathway is underpinned by four key
pillars: Innovation, Financial Discipline, Partnerships and
Sustainability. These pillars drive the success of each Business
Unit and enable the overall Group to collectively withstand
external challenges and focused spending.
InnovationIveco Group fully
backs the investments it has made since operating as an independent
Company and will invest over €5.5 billion from 2024 to 2028 in
order to stay on the front end of the very fast innovation
curve.
The Company is driving Innovation in three key
areas: Energy Transition, Artificial Intelligence (AI) &
Software Defined Vehicles, and Autonomous Driving.
In Energy Transition, the Company reaffirms its
aim to reach net zero carbon emissions by 2040. Instrumental to
this achievement is Iveco Group’s multi-propulsion approach that
includes green and zero-emission solutions. These will be backed by
innovative pay-per-use business models, such as GATE – Green &
Advanced Transport Ecosystem. Initially launched in Italy in
mid-2023, with a focus on Iveco Group’s ZEV (Zero Emission
Vehicles), GATE’s five-year ambition is to scale up, evolving into
a brand-agnostic platform open to other OEMs’ vehicles.
Artificial Intelligence is central to Iveco
Group’s customer-centred innovations, with Generative AI enabling
significant advancements in areas such as data analysis,
machine-human interaction, and software development. Software
Defined Vehicles, powered by AI algorithms, are set to
revolutionise the industry, simplify vehicle updates, and increase
customer productivity. To remain on top of these trends, Iveco
Group has inaugurated its own Software & Analytics Lab, with
plans for a team of 500 specialised engineers in the coming
years.
Iveco Group is already testing Autonomous
Driving on public roads in Europe. For this development and its
swift commercialisation, collaboration with PLUS, a global provider
of self-driving truck technology, alongside other truck OEMs is
fundamental. These advancements offer already today highly
automated driver assistance systems to drivers and fleet
owners.
Financial DisciplineIveco Group
is committed to increasing its cash generation potential and
reducing seasonality where possible. At the same time, the
continued focus on cost optimization and efficiency will further
decrease product costs and maintain a lean SG&A structure, that
by 2028 is projected to be reduced by 50 basis points versus
2023.
The Company’s prior operational excellence
programme set a target to save €1 billion in the 2019-2026
timeframe. At the end of 2023, Iveco Group was in line with its
goal, having set aside €300 million in operational efficiencies,
plus another €600 million of improved profitability in terms of
volumes, mix and pricing. With the new plan, starting with 2024,
the Company is committing to €1 billion of efficiencies, split in
€600 million by 2026 and another €400 million by 2028. This will be
accomplished through the implementation of a detailed set of
initiatives, aimed at reducing product complexity, optimizing
best-cost-countries sourcing, maximizing manufacturing
efficiencies, and exploiting several commercial and technical
levers.
In terms of investments, the €5.5 billion
projected over the next five years are split between Capex and
capitalized R&D. More than 50% of total investments is not
bound by compliance or regulatory restrictions, thus allowing for
swift adaptation to market dynamics as and when necessary. The
Group will prioritize investments that offer attractive returns and
will continue to explore cooperation opportunities to optimize
spending, demonstrating a disciplined investment profile.
PartnershipsIveco Group’s
strategy involves partnering with like-minded, nimble organizations
to accelerate innovation.
Iveco Group is extending and deepening its
partnership with Hyundai Motor Company in the area of electric
heavy-duty truck solutions, including both battery electric trucks
and fuel cell electric trucks for European markets. By leveraging
the advanced technologies and assets of each party, the two
companies expect to accelerate the transition to a sustainable
future.
Since initiating their partnership in March
2022, Hyundai Motor and Iveco Group have achieved a series of
significant milestones. Notably, in September 2022, they unveiled
the first IVECO eDaily Fuel Cell Electric Vehicle at the IAA
Transportation event in Hanover. This was followed by the debut of
the IVECO BUS E-WAY H2 in October 2023 at Busworld in Brussels.
Most recently, in February of this year, the two companies
announced the signing of a supply agreement for an IVECO-badged
all-electric light commercial vehicle for Europe, based on
Hyundai's eLCV platform.
Also today, IVECO and Ford Trucks, the heavy
commercial vehicles brand of Ford Otosan, announce a non-binding
Memorandum of Understanding to explore a collaboration on the
development of a joint cabin structure for heavy-duty trucks
compliant with the new regulations coming into force in 2028/2029.
This is a preliminary step in the co-development of new products
and technologies, encompassing components and systems within the
cabin.
Partnerships such as these offer a triple win:
they reduce costs and spending for all partners involved, ensure
compliance and competitiveness, and deliver essential vehicle
features without passing on excessive costs to customers. These
recently announced partnerships are not yet reflected in the plan
with their expected positive impacts on investments and
economics.
SustainabilitySustainability is
a key pillar for Iveco Group. The Group’s actions are designed to
have a positive impact on its people and on broader society.
The Company achieved some of its key
sustainability targets well ahead of its 2026 goals. Iveco Group
surpassed the goal of 60% water recycling across global facilities,
reaching 64% by the end of 2023. By the end of last year, 24% of
management positions were held by women, starting from 18.2% in
2021 and already exceeding the 2026 target set at 23%. The Net
Promoter Score in customer experience increased by 20% compared to
2021, achieving the target three years ahead of original plan. The
Group is also on track to meet its workplace injury reduction
targets well ahead of schedule.
Building on these early achievements, Iveco
Group has set even more ambitious Sustainability targets,
including:
- By 2026, 100% of total electricity
consumption will come from renewable sources. This target’s
deadline was anticipated from 2030 to 2026;
- The Group aims to recycle 75% of
industrial water at company plants worldwide by 2026, versus the
previous target of 60%;
- The new 2028 target for gender
parity is for 30% of office positions to be held by women.
Therefore, the Group will widen and raise its scope to include all
female employees across every phase of their career.
The “Unlimited Pathways” for the Group
and its Business UnitsIveco Group introduces today a new
structure of reporting performance by business unit, providing
additional clarity on the individual performances of Powertrain,
Bus, Defence, Truck and Financial Services. Each unit has its own
unique “Unlimited Pathway”, reflecting its performance, future
targets and potential upsides.
The Fire Fighting Business Unit (regrouped under
the MAGIRUS brand) is not included in the new Strategic Business
Plan of Iveco Group, nor in the related projected financials. As
the Group announced to the market yesterday, it has just signed a
definitive agreement for the transfer of its ownership to Mutares,
a publicly listed investment group specialized in similar
situations. This marks a new chapter in the long-standing history
of the brand that is “serving heroes since 1864”, enabling it to
compete even more efficiently and effectively in its unique
market.
POWERTRAIN (FPT Industrial
brand)The Powertrain Business Unit is one of the top three
independent engine manufacturers globally. The Unit’s focus on both
Internal Combustion Engines (ICE) and ePowertrains positions it
uniquely for the shift towards alternative fuels and
electrification, ensuring a sustainable and profitable future.With
a diversified portfolio and a robust capacity for innovation, the
Powertrain Business Unit aims to reach between €5.5 and €6 billion
in Net Revenues by 2028 (previous target at €~5 billion by 2026)
and is targeting double-digit profitability, which means growing
its Adjusted EBIT margin by roughly 100 basis points every year, up
to 9.5-10.5% at year-end 2028.
BUS (IVECO BUS and HEULIEZ
brands)The Bus Business Unit relies on its full offering
of vehicles across all segments and on a strong focus on local
communities. An investment of €600 million in advanced technology
between 2024 and 2028 will ensure the unit remains at the forefront
of the industry, particularly in the area of zero-emission
vehicles.The Bus Business Unit aims to reach between €3 and €3.5
billion in Net Revenues by 2028 and is determined to increase the
scale of business and optimise operations so as to almost double
its profitability versus 2022, reaching 7-8% by 2028.
DEFENCE (IDV and ASTRA
brands)Within Iveco Group, Defence functions as an
independent and self-sufficient Business Unit, which emphasizes
technological innovation, operational excellence, and strategic
partnerships. Its strengths reside in its capability and
adaptability to fulfil specific customer needs, thereby continuing
to responsibly support numerous countries worldwide in keeping
their communities safe.The Business Unit is accelerating its
growth, supported by an order book today already exceeding €4
billion. It projects to reach between €1.2 and €1.3 billion in Net
Revenues by 2028, with an Adjusted EBIT margin of 12 to 13%.
TRUCK (IVECO brand)The Truck
Business Unit aims to leverage its leadership in the Light
Commercial Vehicle segment with the Daily and eDaily, and in the
medium-duty truck range with the well-known Eurocargo, while
improving the margins of its Heavy-Duty Truck segment with the
S-Way and S-eWay models. Technological innovation, financial
discipline and strategic partnerships will drive its success.The
Unit aims to reach €11.0-11.5 billion in Net Revenues by 2028 with
an Adjusted EBIT margin of approximately 7%.
FINANCIAL SERVICES (IVECO CAPITAL and
GATE brands)The Financial Services Business Unit is
focused on maintaining its current successes while pioneering new,
sustainable mobility solutions, including those provided by GATE,
the 100% e-born and digital native platform for medium-long-term
pay-per-use rental of electric commercial vehicles.The Unit aims to
grow its captive portfolio at between €8 to €9 billion versus €6.9
billion in 2023, with an Adjusted EBIT in the range of €130 to €150
million by 2028.
Iveco Group’s financial targets for
2028On the back of the individual ambitions of its
Business Units, Iveco Group announces ambitious targets for 2028.
These goals reflect the Group’s commitment to its continued growth
and its confidence in its ability to deliver on its promises.
The 2028 Iveco Group’s financial targets are,
for the Industrial Activities:
- Net Revenues of approximately €19
billion;
- Adjusted EBIT margin of 7 to
8%;
- Free Cash Flow of approximately
€0.9 billion.
At Group level:
- Adjusted Net Income of
approximately €0.9 billion;
- Adjusted diluted EPS exceeding €3
per share.
Financials shown exclude the Fire Fighting
Business Unit since, as mentioned above, Iveco Group signed a
definitive agreement for the transfer of its ownership.
Iveco Group Capital Markets Day presentation and
Q&A are live streamed (details at this link) and a replay will
remain archived in the corporate website. The presentation will
also be posted on the Group’s website www.ivecogroup.com, as soon
as each section is delivered, in the dedicated section, under
Investors/Events.
Non-EU-IFRS Financial
Information Iveco Group monitors its operations through
the use of several non-EU-IFRS financial measures. Iveco Group’s
management believes that these non-EU-IFRS financial measures
provide useful and relevant information regarding its operating
results and targets and enhance the readers’ ability to assess
Iveco Group’s financial performance and financial position.
Management uses these non-EU-IFRS measures to identify operational
trends, as well as make decisions regarding future spending,
resource allocations and other operational decisions as they
provide additional transparency with respect to our core
operations. These non-EU-IFRS financial measures have no
standardized meaning under EU-IFRS and are unlikely to be
comparable to other similarly titled measures used by other
companies and are not intended to be substitutes for measures of
financial performance and financial position as prepared in
accordance with EU-IFRS. Iveco Group’s non-EU-IFRS financial
measures are defined as follows:
- Adjusted EBIT: is defined as EBIT
before restructuring costs and non-recurring items. In particular,
non-recurring items are specifically disclosed items that
management considers rare or discrete events that are infrequent in
nature and not reflective of on-going operational activities.
- Adjusted Net Income/(Loss): is
defined as profit/(loss) for the period, less restructuring costs
and non-recurring items, after tax.
- Adjusted Diluted EPS: is computed
by dividing Adjusted Net Income/(Loss) attributable to Iveco Group
N.V. by a weighted-average number of Common Shares outstanding
during the period that takes into consideration potential Common
Shares outstanding deriving from the Iveco Group share-based
payment awards, when inclusion is not anti-dilutive. When Iveco
Group provides guidance for adjusted diluted EPS, the Group does
not provide guidance on an earnings per share basis because the
EU-IFRS measure will include potentially significant items that
have not yet occurred and are difficult to predict with reasonable
certainty prior to year end.
- Adjusted Income Taxes: is defined
as income taxes less the tax effect of restructuring expenses and
non-recurring items, and non-recurring tax charges or
benefits.
- Adjusted Effective Tax Rate
(Adjusted ETR): is computed by dividing a) adjusted income taxes by
b) profit (loss) before income taxes, less restructuring expenses
and non-recurring items.
- Net Cash (Debt) and Net Cash (Debt)
of Industrial Activities: Net Cash (Debt) is defined as total Debt
plus Derivative liabilities, net of Cash and cash equivalents,
Derivative assets and other current financial assets (primarily
current securities, short-term deposits and investments towards
high-credit rating counterparties) and financial receivables from
CNH Industrial deriving from financing activities and sale of trade
receivables. Iveco Group provides the reconciliation of Net Cash
(Debt) to Total (Debt), which is the most directly comparable
EU-IFRS financial measure included in the Group’s consolidated
statement of financial position. Due to different sources of cash
flows used for the repayment of the debt between Industrial
Activities and Financial Services (by cash from operations for
Industrial Activities and by collection of financing receivables
for Financial Services), management separately evaluates the cash
flow performance of Industrial Activities using Net Cash (Debt) of
Industrial Activities.
- Free Cash Flow of Industrial
Activities (or Industrial Free Cash Flow): refers to Industrial
Activities, only, and is computed as consolidated cash flow from
operating activities less: cash flow from operating activities of
Financial Services; investments of Industrial Activities in
property, plant and equipment and intangible assets; as well as
other changes and intersegment eliminations.
- Available Liquidity: is defined as
cash and cash equivalents, including restricted cash, undrawn
medium-term unsecured committed facilities, other current financial
assets (primarily current securities, short-term deposits and
investments towards high-credit rating counterparties), and
financial receivables from CNH Industrial deriving from financing
activities and sale of trade receivables.
Cautionary StatementStatements
other than statements of historical fact contained in this press
release, including competitive strengths; business strategy; future
financial position or operating results; budgets; projections with
respect to revenue, income, earnings (or loss) per share, capital
expenditures, dividends, liquidity, capital structure or other
financial items; costs; and plans and objectives of management
regarding operations and products, are forward-looking statements.
Forward-looking statements are not guarantees of future
performance. Rather, they are based on current views and
assumptions and involve known and unknown risks, uncertainties and
other factors, many of which are difficult to predict and/or are
outside the Company’s control. If any of these risks and
uncertainties materialise (or they occur with a degree of severity
beyond the Company’s predictions and/or expectations) or other
assumptions underlying any of the forward-looking statements prove
to be incorrect, the actual results or developments may differ
materially from any future results or developments expressed or
implied by the forward-looking statements, which are sometimes
based upon estimates and data received from third parties (such
estimates and data being often revised). Except as otherwise
required by applicable rules, Iveco Group expressly disclaims any
intention to provide, update or revise any forward-looking
statements in this press release to reflect any change in
expectations or any change in events, conditions or circumstances
on which these forward-looking statements are based. All
forward-looking statements by Iveco Group or persons acting on its
behalf are expressly qualified in their entirety by the cautionary
statements contained herein. Information in this press release
cannot be relied upon as a guide to future performance. To the
fullest extent permitted by applicable law, no representation or
warranty of the Company, express or implied, is made as to, and no
reliance should be placed upon, the fairness, accuracy,
completeness or correctness of the information or opinions
contained in this press release. None of the Company, its
affiliates, directors, advisors, employees and representatives, or
anyone acting on their behalf shall bear any responsibility (in
negligence or otherwise) for any loss arising from any use of this
press release or its contents or otherwise arising in connection
with these materials. This press release does not represent
investment advice or a solicitation, recommendation, invitation, or
offer for the purchase or sale of financial products and/or of any
kind of financial services as contemplated by the laws in any
country or state. Further information concerning Iveco Group,
including factors that potentially could materially affect Iveco
Group’s financial results, is included in Iveco Group’s reports and
public filings under applicable regulations.
Iveco Group N.V. (EXM: IVG) is
the home of unique people and brands that power your business and
mission to advance a more sustainable society. The eight brands are
each a major force in its specific business: IVECO, a pioneering
commercial vehicles brand that designs, manufactures, and markets
heavy, medium, and light-duty trucks; FPT Industrial, a global
leader in a vast array of advanced powertrain technologies in the
agriculture, construction, marine, power generation, and commercial
vehicles sectors; IVECO BUS and HEULIEZ, mass-transit and premium
bus and coach brands; IDV, for highly specialised defence and civil
protection equipment; ASTRA, a leader in large-scale heavy-duty
quarry and construction vehicles; MAGIRUS, the industry-reputed
firefighting vehicle and equipment manufacturer; and IVECO CAPITAL,
the financing arm which supports them all. Iveco Group employs more
than 36,000 people around the world and has 20 industrial sites and
29 R&D centres. Further information is available on the
Company’s website www.ivecogroup.com
Media Contacts:Francesco Polsinelli, Tel: +39
335 1776091Fabio Lepore, Tel: +39 335 7469007E-mail:
mediarelations@ivecogroup.com
Investor Relations:Federico Donati, Tel: +39
011 0073539 E-mail: investor.relations@ivecogroup.com
- 20240314_PR_Iveco_Group_Capital_Markets_Day_2024
Grafico Azioni Iveco Group NV (BIT:IVG)
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