Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Q1 2021 Earnings Presentation
59 slides from Ford Mtr Co Del's earnings presentation, Apr 28, 2021
Slide 1: Q1 2021 Earnings Review
Q1 2021 Earnings Review April 28, 2021 Note: See slide A15 for related notes
Slide 2: Information Regarding This Presentation
Information Regarding This Presentation FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements. 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 caus
Slide 3: The Plan
The Plan To Stay in the Game We Must: Turn around automotive operations, compete like a challenger Treat customers like family Create must-have products and services Simplify everything Modernize everywhere Care for each other To Grow and Win We Will: Capitalize on our strengths Disrupt ourselves Pa
Slide 4: First Quarter Highlights
First Quarter Highlights • Adjusted EBIT of $4.8B and a margin of 13.3% (10.8% excluding gain on Rivian), despite significant Turn Around Automotive disruption of semiconductor supply chain; North America EBIT margin of 12.8%, Europe 4.8% • Overseas operations delivered EBIT of $0.5B, an improvement
Slide 5: First Quarter Financial Results
First Quarter Financial Results Adj. FCF Revenue Adj. EBIT Adj. EBIT Margin Adj. EPS $(0.4)B $36.2B $4.8B 13.3% $0.89 Up $1.8B Up $1.9B Up $5.4B Up 15.1 ppts Up $1.12 5 Lincoln Vehicles
Slide 6: The Plan: Must-Have Products And Services
The Plan: Must-Have Products And Services Bronco Ford Telematics Pro Power Onboard • High reservation-to-order conversion rate • Announced Ford Telematics Essentials; • Available across the F-150 lineup, featuring with 70% new customers to Ford utilizes connected vehicle data to give more exportable
Slide 7: The Plan: Must-Have Products And Services
The Plan: Must-Have Products And Services Mustang Mach-E FORDLiive BlueCruise • All-electric Mustang Mach-E on sale in • Launched FORDLiive in Europe, a connected • BlueCruise allows hands-free highway driving North America and Europe uptime system to help Ford commercial on more than 100,000 miles
Slide 8: The Plan: Lead Electrification Revolution
The Plan: Lead Electrification Revolution • Investing $1B in a new electric vehicle manufacturing center in Cologne, Germany as part of ~$22B* electrification investment • Ford’s first European-built, volume all-electric passenger vehicle for European customers will be assembled in Cologne starting
Slide 9: Cash Flow, Cash Balance And Liquidity ($B)
Cash Flow, Cash Balance And Liquidity ($B) A djusted Free Cash Flow Ca sh B alance & L iquidity Liquidity $6.6 $46.9 $47.2 $45.5 • Q1 Adjusted FCF of $(0.4)B driven by: $39.8 ‒ Adverse timing differences $1.9 $35.4 $35.1 $39.3 between accrual-based EBIT and $0.5 cash flows, primarily for customer $3
Slide 10: Revenue And EBIT Metrics
Revenue And EBIT Metrics Wholesale Units ( 000) & A djusted E BIT ( $B) & • Q1 wholesale units down 6%, driven R evenue ( $B) E BIT Margin ( %) by the global semiconductor Wholesale Units $4.8 shortage $39.7 $37.5 $36.2 $36.0 $3.6 • Revenue up 6%, driven by higher $34.3 net pricing, favorable mix an
Slide 11: Q1 2021 Results
Q1 2021 Results ($B) $4.8 $3.4 $3.3 • Company Adjusted EBIT of $4.8B, up $5.4B, driven by improvement in Automotive, Ford Credit and Corporate Other $1.0 $0.6 • Corporate Other includes $0.9B gain on our investment in Rivian $(0.2) • Special Items of $(0.4)B reflects $(0.5) $(0.4) $(0.7) primarily g
Slide 12: Q1 2021 Adjusted EBIT ($B)
Q1 2021 Adjusted EBIT ($B) Nor th South Total Total Europe China IMG America America Auto Company Q1 2020 $ 0.4 $ (0.1) $ (0.1) $ (0.2) $ (0.0) $ (0.2) $ (0.6) YoY Change: Industry $ 1.1 Volume / Mix $ (0.5) $ (0.1) $ (0.2) $ 0.0 $ (0.0) $ (0.8) $ (0.8) Share / Stock / Mix (1.9) Net Pricing 2.6 0.1
Slide 13: North America
North America Wholesale Units (000) 681 Q1 Headlines 619 651 540 533 272 • Wholesales declined 14% YoY, driven by semiconductor supply constraints • Revenue up 5%, reflecting strong customer demand for new product portfolio and higher industry-wide net pricing on lower dealer inventories from semico
Slide 14: South America
South America Wholesale Units (000) 74 Q1 Headlines 59 48 63 • EBIT of $(0.1)B, our best quarterly EBIT since Q3 2013; marks the sixth consecutive 14 18 quarter of YoY EBIT improvement • Significant restructuring of the business progressing as planned Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Slide 15: Europe
Europe Wholesale WholesaleUnits* Units (000) (000) 341 339 Q1 Headlines 288 239 278 154 • EBIT of $0.3B, up $0.5B on 4% lower wholesales; EBIT margin of 4.8% • Commercial vehicle share reached a record high; launched new FORDLiive connected Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 uptime syst
Slide 16: China
China Wholesale WholesaleUnits* Units (000) (000) JV Volume 202 Q1 Headlines 159 169 164 150 190 81 • EBIT improved $0.2B to about breakeven, marking the fourth consecutive quarter of 139 156 146 140 YoY EBIT improvement, driven by strength of Lincoln, Ford near-premium utilities & 72 commercial veh
Slide 17: International Markets Group
International Markets Group Wholesale WholesaleUnits* Units (000) (000) 98 93 Q1 Headlines 78 76 82 • EBIT of $0.2B, up $0.2B; achieved best quarterly EBIT 36 • All markets are profitable, except India Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 • Ranger recognized as Car of the Year in Thailand
Slide 18: Mobility
Mobility EBIT ($B) Q1 Headlines $(0.2) $(0.3) $(0.2) $(0.3) $(0.3) $(0.3) • Ford AV LLC celebrated its third anniversary in Miami with the addition of a new 140,000 square foot command center • In partnership with Ford, Argo AI is now simulating ride-hail and delivery Q4 2019 Q1 2020 Q2 2020 Q3 2020
Slide 19: Ford Credit
Ford Credit EBT ($B) $1.1 $1.0 Q1 Headlines $0.9 $0.6 $0.5 • EBT of $1.0B, up $0.9B, reflecting non-recurrence of increase in credit loss reserves due to COVID-19 and strong auction performance $0.0 • Portfolio performing well – loss-to-receivables (LTR) remains low, reflecting historically low Q4 2
Slide 20: Cash Flow And Balance Sheet ($B)
Cash Flow And Balance Sheet ($B) Q1 Balance Sheet 2020 2021 2020 2021 D ec. 31 Mar. 31 Company Adj. EBIT excl. Ford Credit $ (0.7) $ 3.9 Capital Spending $ (1.8) $ (1.4) Company Excl. Ford Credit Depreciation and Tooling Amortization 1.4 1.2 Company Cash Balance $ 30.8 $ 31.3 Net Spending $ (0.4) $
Slide 21: Special Items ($B)
Special Items ($B) Q1 Global Redesign 2020 2021 Potential 2022+ Actions and Cash Effects Potential 2021 Actions and Cash Effects Global Redesign Recorded 2018 - 2020 Europe excl. Russia $ (0.1) $ (0.1) India (0.0) - ~$11 South America (0.0) (0.3) 1.45 ~$1 Russia 0.0 0.0 China (0.0) (0.0) Separations
Slide 22: 2021 Outlook ($B)
2021 Outlook ($B) 2020 2021 Outlook Actual Adjusted EBIT $5.5 - $6.5 $2.8 Adjusted FCF $0.5 - $1.5 $0.7 Capital Spending $6.0 - $6.5 $5.7 Pension Contributions $0.6 - $0.8 $0.6 Global Redesign EBIT Charges $2.2 - $2.7 $3.4 Global Redesign Cash Effects $3.0 - $3.5 $0.5 22
Slide 23: Perspectives On 2021
Perspectives On 2021 Tailwinds / Headwinds Global Semiconductor Shortage Tailwinds: Non-recurrence of COVID shutdown-related • Ford lost about 200K units or 17% of planned volume losses net of structural cost offsets, production in Q1; outlook assumes about 50% of strong must-have products, Rivian g
Slide 24: Cautionary Note On Forward-Looking Statements
Cautionary Note On Forward-Looking Statements Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptio
Slide 25: Appendix
Appendix Lincoln Zephyr Preview Vehicle Note: See slide A15 for related notes
Slide 26: Key Metrics
Key Metrics Wholesale Units (000) Market Share (%) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 North America 681 619 272 651 540 533 12.8 % 13.6 % 14.2 % 13.6 % 12.1 % 12.5 % South America 74 59 14 48 63 18 6.9 6.9 6.5 5.7 6.0 3.6 Europe 341 288 15
Slide 27: Key Metrics
Key Metrics EBIT ($B) EBIT Change (%) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 North America $ 0.7 $ 0.4 $ (0.9) $ 3.2 $ 1.1 $ 2.9 (64) % (83) % (156) % 59 % 53 % N/M % South America (0.2) (0.1) (0.2) (0.1) (0.1) (0.1) 12 28 19 34 40 35 Europe 0
Slide 28: Key Metrics
Key Metrics Wholesale Units (000) Market Share (%) 2021 B / (W) 2021 B / (W) Q1 2020 Q1 2021 Q1 2020 Q1 2021 2020 2020 North America 619 533 (85) 13.6 % 12.5 % (1.1) ppts South America 59 18 (42) 6.9 3.6 (3.3) Europe 288 278 (10) 6.9 7.2 0.3 China 81 150 69 2.2 2.3 0.1 International Markets Group 78
Slide 29: Q1 Results ($M)
Q1 Results ($M) Q1 2020 2021 2021 B / (W) 2020 North America $ 373 $ 2,949 $ 2,577 South America (112) (73) 39 Europe (149) 341 489 China (241) (15) 226 International Markets Group (25) 201 226 Automotive $ (154) $ 3,403 $ 3,557 Mobility (285) (197) 88 Ford Credit 30 962 932 Corporate Other (223) 64
Slide 30: Quarterly Results ($M)
Quarterly Results ($M) 2019 2020 2021 Full Year Q1 Q2 Q3 Q4 Full Year Q1 North America $ 6,639 $ 373 $ (947) $ 3,202 $ 1,082 $ 3,710 $ 2,949 South America (696) (112) (165) (107) (105) (489) (73) Europe (excl. Russia) 124 (149) (667) (444) 409 (851) 341 China (762) (241) (136) (57) (65) (499) (15) I
Slide 31: Net Income / (Loss) Reconciliation To Adjusted EBIT ($M)
Net Income / (Loss) Reconciliation To Adjusted EBIT ($M) Q1 2020 2021 Net income / (loss) attributable to Ford (GAAP) $ (1,993) $ 3,262 Income / (Loss) attributable to non-controlling interests - - Net income / (loss) $ (1,993) $ 3,262 Less: (Provision for) / Benefit from income taxes (847) (680) In
Slide 32: Net Cash Provided By Operating Activities Reconciliation To Company Adj. FCF
Net Cash Provided By / (Used In) Operating Activities Reconciliation To Company Adj. FCF ($M) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net cash provided by / (used in) operating activities (GAAP) $ 2,900 $ (473) $ 9,115 $ 11,088 $ 4,539 $ 4,492 Less: Items Not Included in Company Adjusted Fre
Slide 33: Earnings Per Share Reconciliation To Adjusted EPS
Earnings / (Loss) Per Share Reconciliation To Adjusted Earnings / (Loss) Per Share Q1 2020 2021 Diluted After-Tax Results ($M) Diluted after-tax results (GAAP) $ (1,993) $ 3,262 Less: Impact of pre-tax and tax special items (1,074) (302) Adjusted net income – diluted (Non-GAAP) $ (919) $ 3,564 Basic
Slide 34: Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate
Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate 2021 Memo: Q1 Full Year 2020 Pre-Tax Results ($M) Income / (Loss) before income taxes (GAAP) $ 3,942 $ (1,116) Less: Impact of special items (401) (2,246) Adjusted earnings before taxes (Non-GAAP) $ 4,343 $ 1,130 Taxes ($M) (Provision
Slide 35: Adjusted ROIC ($B)
Adjusted ROIC ($B) Four Quarters Four Quarters Adjusted Net Operating Profit After Cash Tax Ending Q1 2020 Ending Q1 2021 Net income / (loss) attributable to Ford $ (3.1) $ 4.0 Add: Non-controlling interest - 0.0 Less: Income tax 0.3 0.0 Add: Cash tax (0.6) (0.4) Less: Interest on debt (1.0) (1.9) L
Slide 36: Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measures That Supplement GAAP Measures We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. The non-GAAP measures listed below are intended to be considered by users as supplemental
Slide 37: Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measures That Supplement GAAP Measures • Company Adjusted Free Cash Flow (FCF) (Most Comparable GAAP Measure: Net Cash Provided By / (Used In) Operating Activities) – Measure of Company’s operating cash flow excluding Ford Credit’s operating cash flows. The measure contains elemen
Slide 38: Definitions And Calculations
Definitions And Calculations Wholesale Units and Revenue • Wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that are sold to dealerships, units manufactured by Ford that are sold to other manufacturers, units distributed by
Slide 39: Product Notes
Product Notes Cover Slide • Left: 2020 Mustang Shelby GT350 • Right: 2021 Mach-E Mustang GT Performance Edition. Pre-production model shown. Available late Summer 2021 2021 Bronco (shown on Slide 6) • Pre-production computer-generated image shown with optional equipment and aftermarket accessories.
Slide 40: Q1 2021 Earnings Review
Q1 2021 Earnings Review April 28, 2021 1
Slide 41: Information Regarding This Presentation
Information Regarding This Presentation Forward-Looking Statements This presentation includes forward-looking statements. 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 caus
Slide 42: Key Takeaways
Key Takeaways • Strong Q1 EBT of $962M • Balance sheet remains strong with liquidity at $34B; continue to access diverse funding sources • Portfolio performing well – charge-offs and loss-to-receivables (“LTR”) ratio remain significantly below year- ago levels, reflecting historically low losses. Cr
Slide 43: Key Metrics
Key Metrics EBT ($M) $1,123 Q1 Headlines $630 $912 $962 $543 • EBT of $962M, up $932M, reflecting non-recurrence of increase in credit loss reserves due to COVID-19 and strong auction performance $30 • Por tfolio performing well – loss-to-receivables (“LTR”) remains low, reflecting Q4 2019 Q1 2020 Q
Slide 44: Q1 2021 Net Receivables Mix
Q1 2021 Net Receivables Mix ($B) Net Investment in Operating Leases Consumer Financing Non-Consumer Financing $127.1 $26.6 $100.5 • Receivables declined $11B YoY, primarily reflecting lower $26.3 wholesale receivables • Operating lease portfolio was $75.3 21% of total net receivables $57.4 $21.9 $25
Slide 45: U.S. Origination Metrics And Credit Loss
U.S. Origination Retail & Lease FICO and Retail Repossessions (000) and Metrics And Higher Risk Mix (%) Repossession Rate (%) Higher Risk Portfolio Mix (%) Repossession Rate (%) Credit Loss 753 743 748 Drivers 739 738 735 7 7 6% 6% 6% 6% 6% 6% 5 5 5 1.27% 1.24% 3 1.04% 1.01% 0.92% 0.52% • Discipline
Slide 46: Worldwide Credit Loss Metrics
Worldwide Credit Loss Charge-Offs ($M) and LTR Ratio (%) Metrics LTR Ratio (%) $107 $101 $88 0.36% 0.35% $67 0.32% • Worldwide credit loss metrics $45 0.24% $41 remain strong and below year 0.17% 0.16% ago levels, reflecting historically low losses • Credit loss reserve reflects Q4 2019 Q1 2020 Q2 2
Slide 47: U.S. Lease Metrics
U.S. Lease Metrics Lease Return Volume (000) and Return Rates (%) Lease Placement Volume (000) 24-Month Return Rate (%) 36-Month 39-Month / Other 82 70 75 71 12 67 • Lease placement volume and share 11 52 12 62 62 58 65 53 51 down YoY 9 11 10 64 38 59 77% 76% 76% • Lower lease return volume and retu
Slide 48: Cumulative Maturities At March 31, 2021
Cumulative Maturities At March 31, 2021* ($B) Assets Debt • Strong balance sheet is $147 inherently liquid with cumulative $120 $126 debt maturities having a longer $95 $92 tenor than asset maturities $74 $64 • As of March 31, 2021 $76B of $46 $147B assets are unencumbered Apr – Dec 2021 2022 2023 2
Slide 49: Funding Structure – Managed
Funding Structure – Managed 2020 2021 Receivables* ($B) Dec 31** Mar 31 Term Unsecured Debt $ 76.6 $ 69.4 Term Asset-Backed Securities 54.6 50.2 Ford Interest Advantage / Deposits 6.5 7.2 • Well capitalized with a strong Other 5.7 7.2 balance sheet; $33.7B in net Equity 15.6 15.3 liquidity Adjustmen
Slide 50: Public Term Funding Plan
Public Term Funding Plan* ($B) 2019 2020 2021 Through Actual Actual Forecast Apr 27 • Completed $6B of public issuance in 2021 Unsecured $ 17 $ 14 $ 5-9 $ 1 • Strong balance sheet and substantial liquidity provide Securitizations** 14 13 7 - 10 5 funding flexibility Total $ 31 $ 27 $ 12 - 19 $ 6 * S
Slide 51: Cautionary Note On Forward-Looking Statements
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 assumptio
Slide 52: Appendix
Appendix EBT By Segment A2 Financing Shares And Contract Placement Volume A3 Total Net Receivables Reconciliation To Managed Receivables A4 Financial Statement Leverage Reconciliation To Managed Leverage A5 Liquidity Sources A6 Non-GAAP Financial Measures That Supplement GAAP Measures A7 Definitions
Slide 53: EBT By Segment ($M)
EBT By Segment* ($M) Q1 H / (L) 2021 2020 ** Results United States and Canada segment $ 996 $ 974 Europe segment 66 49 All Other segment (15) (22) Total segments $ 1,047 $ 1,001 Unallocated other (85) (69) Earnings before taxes $ 962 $ 932 Taxes (117) (81) Net income $ 845 $ 851 Distributions $ 1,00
Slide 54: Financing Shares And Contract Placement Volume
Financing Shares And Contract Placement Volume Q1 2020 2021 Share of Ford Sales* United States 56 % 47 % Canada 63 60 U.K. 44 35 Germany 44 37 China 34 41 Wholesale Share United States 74 % 72 % Canada 47 13 U.K. 100 100 Germany 93 91 China 51 66 Contract Placement Volume - New and Used (000) United
Slide 55: Total Net Receivables Reconciliation To Managed Receivables ($B)
Total Net Receivables Reconciliation To Managed Receivables ($B) 2020 2020 2021 Mar 31 Dec 31 Mar 31 Finance receivables, net (GAAP) $ 110.8 $ 105.0 $ 100.5 Net investment in operating leases (GAAP) 27.0 26.7 26.6 Total net receivables* $ 137.8 $ 131.7 $ 127.1 Unearned interest supplements and resid
Slide 56: Financial Statement Leverage Reconciliation To Managed Leverage ($B)
Financial Statement Leverage Reconciliation To Managed Leverage* ($B) 2020 2020 2021 Mar 31** Dec 31** Mar 31 Leverage Calculation Debt $ 136.8 $ 137.7 $ 126.8 Adjustments for cash (11.3) (18.5) (14.1) Adjustments for derivative accounting (1.6) (1.5) (0.8) Total adjusted debt $ 123.9 $ 117.7 $ 111.
Slide 57: Liquidity Sources ($B)
Liquidity Sources* ($B) 2020 2020 2021 Mar 31 Dec 31 Mar 31 Liquidity Sources Cash $ 11.3 $ 18.5 $ 14.1 Committed asset-backed facilities 35.9 38.1 38.2 Other unsecured credit facilities 2.8 2.5 2.5 Total liquidity sources $ 50.0 $ 59.1 $ 54.8 Utilization of Liquidity Securitization & restricted cas
Slide 58: Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measures That Supplement GAAP Measures We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. The non-GAAP measures listed below are intended to be considered by users as supplemental
Slide 59: Definitions And Calculations
Definitions And Calculations ABS cap aci t y i n ex ces s of el i gi ble recei vabl es and other ad just ments (as s hown on t he Li qui dit y Sources chart ) Incl ud es as set -backed capaci ty i n ex cess of el igi bl e receiv ables ; cash rel at ed t o t he Ford Credi t Rev ol vi ng E xtended Var