Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Investor Day (October 2017)
59 slides from Ford Mtr Co Del's investor day presentation, Oct 3, 2017
Slide 1: CEO Strategic Update
CEO Strategic Update Ford Motor Company | October 3, 2017
Slide 2: Jim Hackett, CEO
Jim Hackett | CEO Ford Motor Company
Slide 3: Our solid profits allowed us to distribute over $15 billion to shareholders since 2012
Our solid profits allowed us to distribute over $15 billion to shareholders since 2012 Billions Supplemental Dividend $15.4 $1.2 Anti-Dilutive Share Repurchases Regular Dividends $2.7 $11.5 $3.5 $2.3 $1.0 $2.7 $0.6 $1.7 $2.4 $2.4 Average 2016 2017* 2012 - 2017 2012 - 2015 * Assumes 2017 regular divi
Slide 4: We have grown the business but have fallen short of our 8% automotive operating margin goal
We have grown the business but have fallen short of our 8% automotive operating margin goal Automotive Revenue (Billions) Automotive and Volume (Thousands) Operating Margin Automotive Revenue Wholesale Volume $142 6,651 8%+ Target 4,866 6.1% $104 6.7% 4.6% (0.7)% 2009 2016 2009 2010 2011 2012 2013 2
Slide 5: Ford leadership team
Jim Farley President, Global Markets Joe Hinrichs President, Global Operations Marcy Klevorn President, Mobility Bob Shanks Chief Financial Officer
Slide 6: Five principles we need to act on
Five principles we need to act on: 1. Ford will prepare for disruption by becoming fit 2. We will be in the vehicle business – moving both people and goods 3. Our vehicles will be smart and connected 4. These smart vehicles will thrive in a new transportation operating system 5. We will evolve to ca
Slide 7: Since the Great Recession, our industry enjoyed strong demand
Since the Great Recession, our industry enjoyed strong demand… U.S. Industry Volume (Millions)* 17.8 17.9 16.8 15.9 14.8 13.5 13.0 11.8 10.6 2008 2009 2010 2011 2012 2013 2014 2015 2016 * Includes Medium and Heavy vehicles 7
Slide 8: …and we achieved record levels of profitability
…and we achieved record levels of profitability Ford Adjusted Pre-Tax Results (Billions) $10.1 $10.8 $10.4 $9.3 $8.9 $8.2 $7.3 $- $(7.3) 2008 2009 2010 2011 2012 2013 2014 2015 2016 8
Slide 9: We need to be able to navigate the now, near and far
We need to be able to navigate the now, near and far FAR NEAR NOW 9
Slide 10: A new type of clock for CEOs
A new type of clock for CEOs FAR NEAR NOW 10
Slide 11: A new type of clock for CEOs
A new type of clock for CEOs 11
Slide 12: A new type of clock for CEOs
A new type of clock for CEOs NOW NEAR FAR 12
Slide 13: We cannot compete for the future unless we get fit today
We cannot compete for the future unless we get fit today 13
Slide 14: Our first priority is to reset revenue and attack costs
Our first priority is to reset revenue and attack costs 14
Slide 15: Our costs have grown as fast as revenue; capital spending has grown even faster
Our costs have grown as fast as revenue; capital spending has grown even faster Automotive Revenue and Capital Spending Total Cost Growth* as Percentage of Net Revenue 5.4% 4.9% 3.5% 30% 29% Growth Growth 2010 2016 2010 2016 2010 2011 2012 2013 2014 2015 2016 Auto Revenue Total Cost * Adjusted data;
Slide 16: We established Global Markets and Global Operations organizations
We established Global Markets and Global Operations organizations • Promote better accountability across the markets • Enable more effective cost reduction • New industrial model for the next generation of vehicles • Have already launched profit improvement and spending reduction initiatives 16
Slide 17: We are reducing the pace of cost growth
We are reducing the pace of cost growth Automotive Cost Performance Future 5-Year Incremental Efficiencies Product Engineering $4 Billion Automotive Cost Growth 50% Material Cost $10 Billion 2010 - 2016 2017 - 2022 17
Slide 18: We are also addressing the need for a fundamental redesign of our operations
We are also addressing the need for a fundamental redesign of our operations 18
Slide 19: Not only one-time savings but also compounding improvements
Not only one-time savings but also compounding improvements Profits Time 19
Slide 20: Our re-imagined F-Series yields great results now and in the future
Our re-imagined F-Series yields great results now and in the future F-Series Progress 2014 - 2017 Share 1.7 ppts Average Transaction Price 16% F-150 Weight 700 lb F-150 Fuel Economy up to 19% + CAFE positive Next-Generation F-Series 90% manufacturing equipment re-use Remains positive to CAFE 20
Slide 21: We are regaining focus on what our customers value the most and reducing complexity
We are regaining focus on what our customers value the most and reducing complexity Orderable Combinations Current Model Forward Model 35,000 360 2,302 1,168 672 26 228 96 Focus Escape Fusion Explorer 21
Slide 22: We are also taking a hard look at our product development process
We are also taking a hard look at our product development process to improve efficiency New Vehicle Product Development Time 20% Change-over Time 25% 22
Slide 23: Internal combustion spending will be re-deployed into electrification
Internal combustion spending will be re-deployed into electrification for future demand Internal Combustion Reinvest Into Electrified Powertrains Engine Powertrain Capital Architectures Spending (Bils.) 17 $1.7 12 $1.2 $$$ 29% 32% Decline Decline 2016 2022 2016 2022 23
Slide 24: Factory of the Future promises smaller footprints, faster logistics and closer customer contact
Factory of the Future promises smaller footprints, faster logistics and closer customer contact 24
Slide 25: Understanding our future starts with a winning aspiration
Understanding our future starts with a winning aspiration 25
Slide 26: Our vision for the future
Our vision for the future Ford Motor Company was built on the belief that freedom of movement drives human progress. It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing sm
Slide 27: Winning aspiration
21 FINES FINES ResetRevewe | Redesign nd Business seadkosts | Operations A Risk for Ford in Shunning Bailout, and Possibly a Reward ‘WINNING ASPIRATION arouse ne 2 8 Wome \Newe Busi STRATES CHOKES CULTURAL IMPLIATIONS Ford pulls its weight without bailout funds a @99800008 ‘Rut Balt Fd Noto Company)
Slide 28: People have passion for their vehicles
People have passion for their vehicles 28
Slide 29: Vehicles can enable technology with passion
Vehicles can enable technology with passion 29
Slide 30: It is more than mobility… it is mobility with passion
It is more than mobility… it is mobility with passion 30
Slide 31: There are many more choices for where we play and how we win
There are many more choices for where we play and how we win WHAT IF A CITY MOVED WITH THE RHYTHMS OF ITS INHABITANTS? INTRODUCTION OF FULLY ELECTRIFIED VEHICLE AUTONOMOUS SAE LEVEL POPULATION INCREASES 4-CAPABLE VEHICLES EBIKES WIRELESS CHARGING CROWD-SOURCED DYNAMICALLY- ROUTED SHUTTLE SERVICE 31
Slide 32: There are persistent forces that will help us make the choices from Now to Far
There are persistent forces that will help us make the choices to move from Now to Far THE CITY OF TOMORROW, DECADES ADVANCED, HIGH-SPEED MASS TRANSIT AND DECADES FROM NOW. VEHICLES ROUTED AROUND PEDESTRIANS AND EACH OTHER SIGNIFICANT POPULATION OF FULLY AUTONOMOUS VEHICLES PARKING CUT TO ALLOW RE-U
Slide 33: Focusing on strategic choices
Focusing on strategic choices 33
Slide 34: Investing now in the understanding of use is the gift that will keep on giving
Investing now in the understanding of use is the gift that will keep on giving 34
Slide 35: Recent advances in deep learning are breathtaking
Recent advances in deep learning are breathtaking 35
Slide 36: Deep learning will help us understand vehicle interactions to optimize autonomous vehicles
Deep learning will help us understand vehicle interactions to optimize autonomous vehicles 36
Slide 37: Environments will actually communicate to the vehicles
Environments will actually communicate to the vehicles 37
Slide 38: There will be a variety of propulsion choices but electrification will become more common
There will be a variety of propulsion choices but electrification will become more common Global Industry 2017 Global Industry Outlook 2030 Internal Combustion Engine (ICE) Hybrid Electric Vehicle (HEV) Battery Electric Vehicle (BEV) / Plug-in Hybrid (PHEV) 38
Slide 39: Advanced propulsion systems need to offer passion and intimacy
Advanced propulsion systems need to offer passion and intimacy 39
Slide 40: City of Tomorrow Video
City of Tomorrow Video
Slide 41: Smart Vehicles in a Smart World
Smart Vehicles in a Smart World AUTONOMOUS ROAD USER VEHICLES CHARGING CONNECTED DYNAMIC VEHICLES SHUTTLE INTEGRATED FARE REAL-TIME TRAFFIC MANAGEMENT MANAGEMENT MULTI-MODAL INCENTIVES TRANSPORTATION (DISCOUNTS, TRAVEL, SOLUTIONS VOUCHERS, ETC.) PERSONAL TRAVEL SMART ASSISTANT APPS PARKING REAL TIME
Slide 42: Flexibility and partnerships enable agility
Flexibility and partnerships enable agility Ford Transportation Microtransit Fleet Dynamic incl. Customer Management FordPass Shuttle as a Service Non-Emergency Digital Services And more… (incl. ride hailing) Medical Transport Solutions Management Notifications And more… Telemetry Telemetry Payments
Slide 43: Connectivity, Non-Emergency Medical Transport, Chariot, FordPass
Connectivity Non-Emergency Medical Transport Chariot FordPass and Digital Services Platform
Slide 44: Evolving our portfolio to optimize returns
Evolving our portfolio to optimize returns Utilities Leverage regional strengths Play to Win Commercial Vehicles Build on leadership: F-Series, Ranger and Transit Leadership Cars Profitable subsegments and value partnerships Smart plays Powertrains Simplify and partner ICE and diversify electrificat
Slide 45: Accelerating pure electric vehicle portfolio
Accelerating pure electric vehicle portfolio • Profit driven • New Zotye BEV MOU and other alliances • New dedicated BEV team - Team Edison • Expanded BEV line-up post 2020 • End-to-end business model change from design through ownership • …more to come 45
Slide 46: On-track for production ready AV business
On-track for production ready AV business • Business model driven: People, Goods, Content • Human-centered design • Argo AI: On-track with scalable and production ready tech • Max utilization: HEV, commercial durability, flexible vehicle format • Expanding tech and future commercial business partner
Slide 47: We are redesigning our industrial model for smart vehicles in a smart world
We are redesigning our industrial model for smart vehicles in a smart world Today Tomorrow Deep • Machine Learning Learning • Artificial Intelligence Lean Manufacturing Data • 3D Printing • Virtual Factory Capital • Manufacturing 4.0 47
Slide 48: BEV product simplification yields floor space and capital efficiencies
BEV product simplification yields floor space and capital efficiencies Current State – Final Assembly Future State – Final Assembly Benefits vs. ICE PRE-DELIVERY • 50% reduction in footprint TRIM / CHASSIS / PRE-DELIVERY • 50% reduction in capital CHASSIS investment • 30% reduction in hours per unit
Slide 49: Improving time to market and engineering efficiency
Improving time to market and engineering efficiency Total Time To Market Incl. Top Hat Platform Time To Market Cumulative Engineering Efficiency (Billions) $4.0 Lower is Better Cumulative Savings 2016 2017 2018 2019 2020 2021 2022 49
Slide 50: Financial update
Financial update • Remain committed to investment-grade balance sheet • Strong shareholder distributions via unchanged distribution strategy • Continue to be focused on: – Growth … grounded in analytically risk-assessed assumptions – 8%+ Automotive operating margin – ROIC in excess of cost of capita
Slide 51: We will accelerate the introduction of connected, smart vehicles and services
We will accelerate the introduction of connected, smart vehicles and services New Ford Vehicles Connected – U.S. Take Rate New Connected Vehicles 100% 55% 90% Globally By 2020 2018 2019 51
Slide 52: We will rapidly improve our fitness to lower costs, release capital and finance growth
We will rapidly improve our fitness to lower costs, release capital and finance growth New Partnerships in Emerging Markets Global Lincoln Sales (000) 159 India and EM 108 Partnership 47% Growth China Low 2014 2016 Cost BEV Global Lincoln Quality 2013 2017 Yusheng Low Cost Utility Initial Quality Su
Slide 53: We will re-allocate capital to where we can win in the future
We will re-allocate capital to where we can win in the future Re-allocating $7 Billion of Capital from Cars to SUVs and Trucks $7 Billion Fewer Nameplates / Lower Spend New SUVs and Trucks Investment • North America Ranger – 2018 • All-new Bronco – 2020 • Three other vehicles including BEV SUV North
Slide 54: We will continuously innovate to create the most human-centered mobility solutions
We will continuously innovate to create the most human-centered mobility solutions 54
Slide 55: We will empower our team to work together effectively to compete and win
We will empower our team to work together effectively to compete and win 55
Slide 56: Slide 56
Slide 57: Risk Factors
Risk Factors 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
Slide 58: Appendix
Appendix
Slide 59: Reducing global material cost by an incremental $10 billion through 2022
Reducing global material cost by an incremental $10 billion through 2022 2018 - 2022 Plan by Workstream (Billions) $10 billion Total New Model Current Complexity Product Cost Model Cost Reductions 59