- Capital markets event today will feature updates from company
leaders on Ford’s ambitious strategy, including KPIs and financial
targets for three global business segments
- Reports to include financial bridges to a company adjusted EBIT
margin of 10% in 2026, and to similarly timed EBIT margin targets
for Ford Blue, Ford Model e and Ford Pro
- Company will announce new battery raw-material definitive
agreements, strengthening Ford’s sourcing to produce two million
EVs by the end of 2026 – and beyond
- For full-year 2023, company maintains guidance of $9 billion to
$11 billion in adjusted EBIT and about $6 billion in adjusted free
cash flow
Less than two quarters into full deployment, the teams behind
the Ford+ growth plan’s new customer-centered business segments are
redefining customer value, while at the same time reducing
cyclicality, improving capital efficiency, and generating
profitable growth and strong free cash flow.
That’s the essential message of CEO Jim Farley, CFO John Lawler
and other Ford leaders to hundreds of investors, analysts and
others attending the company’s capital markets event today
in-person and virtually.
The program will be livestreamed, with supporting material, via
shareholder.ford.com beginning at 8:00 a.m. Remote attendees are
advised to register online by 7:45 a.m. Eastern Time. Replays of
the presentations and Q&A will be at the same site starting
later today.
“The days of being all things to all people are over at Ford,”
Farley said. “We’re developing and delivering connected, digital
products that give customers tailored ownership experiences -
opening up diverse revenue pools and unprecedented growth for us
instead of jockeying for slivers of share with complex hardware in
over-served vehicle categories.”
Farley said that Ford is “competing differently” and placing
“big bets” through each of its three, customer-centered business
segments:
- Ford Blue, with a portfolio of iconic gas-powered and
hybrid vehicles, including exciting derivative versions of models
like F-150 and Ranger trucks and Bronco SUVs, and a commitment to
achieving high quality in every category
- Ford Model e, a startup within Ford that’s rapidly
developing innovative, updatable next-generation electric vehicles,
as well as breakthrough digital platforms and software – such as
the top-rated BlueCruise advanced driver-assistance technology –
for adoption across all of the company’s products
- And Ford Pro – what Farley calls Ford’s “secret weapon”
– to help commercial customers lower the total cost of vehicle
ownership and transform their enterprises with a leading lineup of
specialized gas, hybrid and electric vehicles and increasing attach
rates for productivity services, like prognostics and
telematics.
Ford has fresh, in-demand products and ambitious objectives for
profitable growth for each of the businesses, which are making
decisions – including about how to allocate capital – based on the
specific needs of their different customers.
“We want to give customers services and experiences they can’t
live without – including things we haven’t yet imagined,” said
Farley.
Farley and Lawler will be joined by Kumar Galhotra of Ford Blue;
Doug Field and Lisa Drake of Ford Model e; and Ted Cannis of Ford
Pro. Collectively, they’ll describe how the company is raising its
standing with millions of longtime customers around the globe – and
creating appeal with millions of new ones who are often younger,
more diverse and haven’t previously considered Ford.
Lawler will illustrate how Ford is raising its effectiveness in
the value-creation areas the company first laid out when the Ford+
plan was introduced two years ago:
- Improving product mix, anchored by highly regarded and popular
nameplates
- Leading in development and delivery of high-volume electric
vehicles
- Through Ford Pro, leveraging existing and emerging strengths
into a comprehensive commercial business with an expanded
addressable market, and
- Revolutionizing experiences for all types of customers with
connected vehicles, including software and services opportunities
that, over time, will broaden sources of company revenue and make
it more durable.
“With the customer-centered business segments fully stood up,
we’re taking giant leaps forward with big implications for how we
compete and create value over the long haul,” Lawler said.
For example, Ford Model e’s growth expectations include a
production capacity run-rate of two million EVs by the end of 2026
and beyond. To that end, Drake today will announce Ford’s latest
agreements for battery raw materials.
Lawler will show bridges to a total company adjusted earnings
before interest and taxes (EBIT) margin of 10% in 2026 – “a
waypoint” to higher subsequent profitability. He’ll also provide
walks to 2026 EBIT margin targets for Ford Blue (low double-digits)
and Ford Pro (mid-teens), and by late 2026 for Ford Model e
(8%).
“With that kind of segment-level information, investors and
others can track every quarter and assign value to the progress
we’re making in transforming Ford and the industry,” he said. “It’s
a transparency that they can’t get anywhere else today.”
According to Lawler, disciplined capital allocation is
fundamental to the Ford+ plan, made possible by tremendous
flexibility from improving operations, free cash flow generation
and a strong balance sheet. The company’s intentions, he said,
remain to produce an adjusted return on invested capital of about
20% over the plan period and distribute 40% to 50% of adjusted free
cash flow to shareholders through dividends and antidilutive share
repurchases.
Over the last several years, Lawler said, capital uses have
progressively shifted from restructuring global operations to
funding growth, including investments in:
- Exciting new vehicle derivatives for Ford Blue
- Greater vertical integration of battery plants and raw
materials, as well as a new distribution model, within Ford Model
e, and
- For Ford Pro, all-new, industry-leading Super Duty trucks and
e-Transit vans, plus capabilities in software and services that
help customers raise their productivity.
Ford again reiterated its expectations for full-year 2023
adjusted EBIT of $9 billion to $11 billion and adjusted free cash
flow of about $6 billion. The company continues to anticipate EBIT
of about $7 billion for Ford Blue, up modestly from 2022, and
approaching $6 billion for Ford Pro, nearly double last year, and a
full-year loss of about $3 billion for the startup Ford Model
e.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in
Dearborn, Michigan, committed to helping build a better world,
where every person is free to move and pursue their dreams. The
company’s Ford+ plan for growth and value creation combines
existing strengths, new capabilities and always-on relationships
with customers to enrich experiences for customers and deepen their
loyalty. Ford develops and delivers innovative, must-have Ford
trucks, sport utility vehicles, commercial vans and cars and
Lincoln luxury vehicles, along with connected services. The company
does that through three customer-centered business segments: Ford
Blue, engineering iconic gas-powered and hybrid vehicles; Ford
Model e, inventing breakthrough EVs along with embedded software
that defines exceptional digital experiences for all customers; and
Ford Pro, helping commercial customers transform and expand their
businesses with vehicles and services tailored to their needs.
Additionally, Ford is pursuing mobility solutions through Ford
Next, and provides financial services through Ford Motor Credit
Company. Ford employs about 174,000 people worldwide. More
information about the company and its products and services is
available at corporate.ford.com.
Adjusted EBIT and Adjusted EBIT Margin are non-GAAP financial
measures. Ford does not provide guidance on a net income or net
income margin basis, the respective comparable GAAP measures.
Ford’s net income will include potentially significant special
items that have not yet occurred and are difficult to predict with
reasonable certainty, including gains and losses on pension and
OPEB remeasurements.
Adjusted free cash flow is a non-GAAP financial measure. Ford
does not provide guidance for net cash provided by/(used in)
operating activities, the comparable GAAP measure. Ford’s net cash
provided by/(used in) operating activities will include potentially
significant special items that have not yet occurred and are
difficult to predict with reasonable certainty, including cash
flows related to the Company's exposures to foreign currency
exchange rates and certain commodity prices (separate from any
related hedges), Ford Credit's operating cash flows, and cash flows
related to special items, including separation payments, each of
which individually or in the aggregate could have a significant
impact to our net cash provided by/(used in) our operating
activities.
Cautionary Note on Forward-Looking
Statements
Statements included or incorporated by reference herein may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on expectations, forecasts, and assumptions by
our management and involve a number of risks, uncertainties, and
other factors that could cause actual results to differ materially
from those stated, including, without limitation:
- Ford and Ford Credit’s financial condition and results of
operations have been and may continue to be adversely affected by
public health issues, including epidemics or pandemics such as
COVID-19;
- Ford is highly dependent on its suppliers to deliver components
in accordance with Ford’s production schedule and specifications,
and a shortage of or inability to acquire key components, such as
semiconductors, or raw materials, such as lithium, cobalt, nickel,
graphite, and manganese, can disrupt Ford’s production of
vehicles;
- To facilitate access to the raw materials necessary for the
production of electric vehicles, Ford has entered into, and expects
to continue to enter into, multi-year commitments to raw material
suppliers that subject Ford to risks associated with lower future
demand for such materials as well as costs that fluctuate and are
difficult to accurately forecast;
- Ford’s long-term competitiveness depends on the successful
execution of Ford+;
- Ford’s vehicles could be affected by defects that result in
delays in new model launches, recall campaigns, or increased
warranty costs;
- Ford may not realize the anticipated benefits of existing or
pending strategic alliances, joint ventures, acquisitions,
divestitures, restructurings, or new business strategies;
- Operational systems, security systems, vehicles, and services
could be affected by cyber incidents, ransomware attacks, and other
disruptions and impact Ford and Ford Credit as well as their
suppliers and dealers;
- Ford’s production, as well as Ford’s suppliers’ production,
and/or the ability to deliver products to consumers could be
disrupted by labor issues, natural or man-made disasters, adverse
effects of climate change, financial distress, production
difficulties, capacity limitations, or other factors;
- Ford’s ability to maintain a competitive cost structure could
be affected by labor or other constraints;
- Ford’s ability to attract and retain talented, diverse, and
highly skilled employees is critical to its success and
competitiveness;
- Ford’s new and existing products and digital, software, and
physical services are subject to market acceptance and face
significant competition from existing and new entrants in the
automotive and digital and software services industries and its
reputation may be harmed if it is unable to achieve the initiatives
it has announced;
- Ford’s results are dependent on sales of larger, more
profitable vehicles, particularly in the United States;
- With a global footprint, Ford’s results could be adversely
affected by economic or geopolitical developments, including
protectionist trade policies such as tariffs, or other events;
- Industry sales volume can be volatile and could decline if
there is a financial crisis, recession, or significant geopolitical
event;
- Ford may face increased price competition or a reduction in
demand for its products resulting from industry excess capacity,
currency fluctuations, competitive actions, or other factors;
- Inflationary pressure and fluctuations in commodity and energy
prices, foreign currency exchange rates, interest rates, and market
value of Ford or Ford Credit’s investments, including marketable
securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or
derivative markets around the world at competitive rates or in
sufficient amounts could be affected by credit rating downgrades,
market volatility, market disruption, regulatory requirements, or
other factors;
- The impact of government incentives on Ford’s business could be
significant, and Ford’s receipt of government incentives could be
subject to reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit
losses, lower-than-anticipated residual values, or
higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and OPEB plans
(e.g., discount rates or investment returns) could be worse than
Ford has assumed;
- Pension and other postretirement liabilities could adversely
affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant
litigation, governmental investigations, or adverse publicity
arising out of alleged defects in products, services, perceived
environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans and
facilities to comply with safety, emissions, fuel economy,
autonomous driving technology, environmental, and other
regulations;
- Ford and Ford Credit could be affected by the continued
development of more stringent privacy, data use, and data
protection laws and regulations as well as consumers’ heightened
expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit
regulations, consumer protection regulations, or other
regulations.
We cannot be certain that any expectation, forecast, or
assumption made in preparing forward-looking statements will prove
accurate, or that any projection will be realized. It is to be
expected that there may be differences between projected and actual
results. Our forward-looking statements speak only as of the date
of their initial issuance, and we do not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise. For
additional discussion, see “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2022, as
updated by our subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230522005341/en/
Media T.R. Reid 1.313.319.6683
treid22@ford.com
Equity Investment Community Lynn Antipas Tyson 1.914.485.1150
ltyson4@ford.com
Fixed-Income Investment
Community Jessica Vila-Goulding
1.313.248.3896 jvila5@ford.com
Shareholder Inquiries 1.800.555.5259 or 1.313.845.8540
stockinf@ford.com
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