Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Investor Day (May 2023)
123 slides from Ford Mtr Co Del's investor day presentation, May 22, 2023
Slide 1: Lynn Antipas Tyson, Executive Director, Investor Relations
Lynn Antipas Tyson Executive Director, Investor Relations
Slide 2: Safe harbor statement and disclosures
Safe harbor statement and disclosures Forward-looking statements These presentations include 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 cause
Slide 3: 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 4: Appendix
Appendix
Slide 5: Notes
Notes General • Unless otherwise indicated, statements regarding sales rankings, attachment rates, and the basis for improvements are for full-year 2022 results and/or based on S&P Global data. • Calculated results may not sum due to rounding • Visit ford.com for vehicle information Model e • Compet
Slide 6: Notes
Notes Ford Pro • Revenue TAM opportunity is based on a Boston Consulting Group study • #1 commercial share claims are for Q1 2023 • E-Transit Courier and E-Transit Custom not on sale until 2024 • #1 U.K. best selling vehicle claim is for Q1 2023 • Ford Pro digital and physical services cost of owner
Slide 7: Net Cash Provided By / (Used In) Operating Activities Reconciliation To Company Adj. FCF
Net Cash Provided By / (Used In) Operating Activities Reconciliation To Company Adj. FCF ($M) Full Year Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2021 2022 Net cash provided by / (used in) operating activities (GAAP) $ 3,531 $ (1,084) $ 2,947 $ 3,812 $ 1,178 $ 15,787 $ 6,853 Less: Items Not Included i
Slide 8: Net Income / (Loss) Reconciliation To Adjusted EBIT ($M)
Net Income / (Loss) Reconciliation To Adjusted EBIT ($M) Fourth Quarter Full Year 2021 2022 2021 2022 Net income / (loss) attributable to Ford (GAAP) $ 12,282 $ 1,289 $ 17,937 $ (1,981) Income / (Loss) attributable to non-controlling interests (9) (30) (27) (171) Net income / (loss) $ 12,273 $ 1,259
Slide 9: 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 10: 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 11: Jim Farley, President & Chief Executive Officer
Jim Farley President & Chief Executive Officer
Slide 12: Slide 12
Slide 13: We’re accelerating our use of low capital derivatives
We’re accelerating our use of low capital derivatives
Slide 14: We’re simplifying our products
We’re simplifying our products
Slide 15: We’re learning from the data in our connected vehicles
We’re learning from the data in our connected vehicles
Slide 16: We’re expanding services beyond the vehicle and throughout the ownership life cycle
We’re expanding services beyond the vehicle and throughout the ownership life cycle
Slide 17: Kumar Galhotra, President, Ford Blue
Kumar Galhotra President, Ford Blue
Slide 18: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 2022 2026
Slide 19: Kentucky Truck Plant
Kentucky Truck Plant A new vehicle rolls off the assembly line every 37 seconds
Slide 20: Business priorities
Business priorities 1. 2. 3. Improve Reduce Grow revenue quality costs and profits
Slide 21: Ford Blue is a growth business
Ford Blue is a F-150 Bronco Maverick growth business
Slide 22: Bronco and Maverick customers new to Ford
>50% of Bronco and Maverick customers are new to Ford
Slide 23: Global Ranger sales growth in Q1
20% global Ranger sales growth in Q1
Slide 24: Increasing capacity by 160K over the next 10 months
Increasing capacity by 160K over the next 10 months
Slide 25: Levers for improving our returns
Levers for 1. Derivatives 2. Hybrids 3. Accessories & parts improving our returns
Slide 26: We will focus on product derivatives
We will focus F-150 Bronco Ranger on product derivatives F-150 Raptor Bronco Raptor Ranger Raptor
Slide 27: Low investment, high margins
Low investment high margins 80%+ parts commonality 2-3x EBIT to base vehicle F-150 Raptor Bronco Raptor
Slide 28: Bronco derivatives
Bronco derivatives Raptor Work Everglades Premium Heritage Heritage +
Slide 29: These derivatives have pricing power
These derivatives have pricing power
Slide 30: U.S. aftermarket accessories industry $8B
U.S. aftermarket accessories industry $8B
Slide 31: Average Bronco owner spend $1,700
$1,700 average Bronco owner spend
Slide 32: FCSD post warranty service over the next 3 years
FCSD post warranty service 25% 40% ` over the next 3 years
Slide 33: Mobile service bays launching in 2023
2,000+ ` mobile service bays launching in 2023
Slide 34: We are less exposed than our competition during this EV transition
We are less exposed than our competition during this EV transition
Slide 35: Rangers sold in markets with minimal EV infrastructure
>70% of Rangers are sold in markets with minimal EV infrastructure
Slide 36: Quality target: Best-in-class by 2025
Quality target: Best-in-class by 2025 F-150 Super Duty Bronco Ranger Transit z
Slide 37: How we are addressing quality
1. 2. 3. Engineering Manufacturing Supply Chain How we are addressing quality
Slide 38: Launch vehicle testing
Tested and held launch Increased number of Drove millions of miles vehicles 3X longer than launch vehicles tested in launch vehicles prior launches
Slide 39: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 1% Warranty Cost 2022 2026
Slide 40: Supply base stability
Supply base stability We are working to improve this every day Operational audits Ongoing monitoring Production stability of of more than 125 for quality and semiconductor chip supplier sites supply flow supply
Slide 41: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 1.5% Supplier Instability 2022 2026
Slide 42: Cost of parts
Cost of parts Elimination of parts Material Explorer wiring harness designed to aid modification complexity reduction manufacturing
Slide 43: Examples like these will save half a billion dollars annually
Examples like these will save half a billion dollars annually
Slide 44: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 1.5% 10% 7.2% Parts Cost 2022 2026
Slide 45: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 2022 2026
Slide 46: Structural costs
Structural costs Labor & D&A Engineering SG&A overhead
Slide 47: Orderable combination reductions
Orderable combination reductions 1,900 Explorer 23 to 800 to 32 Expedition
Slide 48: Sequencing efficiencies
Sequencing efficiencies 85,000 ft2 freed up to enable further insourcing
Slide 49: F-150 complexity reduction
F-150 complexity reduction more than 2,400 parts eliminated
Slide 50: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 2022 2026
Slide 51: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch. /Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 2022 2026
Slide 52: Doug Field
Doug Field Chief Advanced Product Development & Technology Officer
Slide 53: Customers new to Ford
50% 60% customers customers new to Ford new to Ford
Slide 54: Model e Gen 1 EVs
Model e Gen1 E\V/s WY Kiss Ford Modele
Slide 55: Customers new to full-size truck segment
60% customers new to full-size truck segment
Slide 56: Max payload and max towing
2,235lbs 10,000lbs max payload max towing
Slide 57: 580hp, 0-60 mph under 4.0 secs
580hp <4.0secs 0-60 mph Ford Modele
Slide 58: Mega Power Frunk
Mega Power Frunk a Ford Modele
Slide 59: Pro Power Onboard
Pro Power Onboard 240 volts Ford Modele
Slide 60: Intelligent Backup Power
Intelligent . el Backup Power iy lees Ford Modele
Slide 61: E = m V dt +
E = m ∫ V dV dt dt + Cd A f p 2 ∫ V 3 dt + f r mg ∫ V dt
Slide 62: Customer experience +57 points
Customer experience +57points of NPS if negotiation with dealer < 30 minutes
Slide 63: Dealer loyalty when transaction is mostly digital
+40% dealer loyalty when transaction is mostly digital
Slide 64: Delivery from Retail Replenishment Center in <10 days
Delivery from Retail Replenishment Center in <10 days TBD
Slide 65: 90% of the U.S. lives within 20 miles of a Model e dealer
90% of the U.S. lives within 20 miles of a Model e dealer
Slide 66: Connection, Productivity, Safety and Autonomy, Security
Connection Productivity Safety and Autonomy Security
Slide 67: #1 rated ADAS in the U.S.
#1 rated ADAS in the U.S.
Slide 68: 20% take rate in pilot on 23MY Mustang Mach-E
20% New slide: 25% take rate on Mustang Mach-E at $2100 – rolling out across the 2024 model year take rate in pilot on 23MY Mustang Mach-E
Slide 69: 500,000 BlueCruise ready U.S. vehicles in 2024 model year
500,000 BlueCruise ready U.S. vehicles in 2024 model year
Slide 70: Design principles
1. Design for real customers Design 2. Capability without complexity principles 3. Simple, but never patronizing
Slide 71: Our EV leadership team
Our EV leadership team 106 years building Ford 31 years building 13 EVs delivered 46 years building 197 years developing vehicles Ford EVs chips software
Slide 72: The best of both worlds
The best ef.both worlds® melt PNG a |
Slide 73: Lisa Drake
Lisa Drake Vice President, EV Industrialization, Ford Model e
Slide 74: Model e EV volumes and capacity
Model e EV volumes Nearly Well over 100,000 1 million 2 million units in 2022 units of capacity units of capacity by YE 2026 including Ford Pro by YE 2026
Slide 75: Cuautitlan Assembly Plant
Cuautitlan Assembly Plant 40 41 days 30 Full line rate 20 JPH 2X jobs per hour 12% less labor per unit 10 0 Day 10 Day 20 Day 30 Day 40
Slide 76: The Ford launch standard
The Ford launch standard Engineered line rate 103K Cumulative production within 55 days 36K 25K Competitors 7K 4K 0 Days of acceleration 70 130
Slide 77: Oakville Electric Vehicle Complex
Oakville Electric Vehicle Complex + We own the land + Skilled workforce + Saves up to 2 years and infrastructure of thousands versus building new
Slide 78: Zero operators in mainline bodyshop
Zero operators in 25% smaller 25% smaller final 60% reduction in mainline paint shop assembly battery pack bodyshop labor
Slide 79: Improvement in labor and overhead cost versus current ICE F-150
improvement in labor and overhead cost versus current ICE F-150
Slide 80: 240 GWh total secured capacity
240GWh total secured capacity Scaling capacity with quality
Slide 81: Vertical integration: Raw materials
Vertical integration: Raw materials 2M 28 3 global EV Ni 58.693 Li 6.941 production 90% sourced 90% sourced capacity
Slide 82: Raw materials: Nickel
Raw materials: Nickel LME plus $1.50/kg $5.50/kg 80 kg per 100-kWh ~$200M NiSO4 from Class 1 nickel NiSO4 from MHP saved battery annual savings at 45 GWh LME minus $4.00/kg
Slide 83: Entire cell plant dedicated to Ford Pro EVs
Entire cell plant All commercial dedicated to vehicles qualify Ford Pro EVs for $7,500 tax credit
Slide 84: Full vertical integration
๏ Full vertical integration ๏ 42 GWh ๏ $45/kWh production tax credit ๏ World-class LFP technology ๏ Single cell – multiple products
Slide 85: We expect to produce one of the least expensive batteries in the U.S.
We expect to produce one of the least expensive batteries in the U.S.
Slide 86: Battery pack costs
Battery pack costs LFP: Further savings in 2027 + NCM: On track for 30% cost reduction
Slide 87: Ted Cannis, CEO, Ford Pro
+ PRO Ted Cannis CEO, Ford Pro
Slide 88: We expect to nearly double our EBIT
We expect to nearly double $3.2B ~$6.0B our EBIT 2022 2023
Slide 89: EBIT margin potential
EBIT margin potential 6.6% 2022 14% 2026
Slide 90: Ford Pro key metrics
Ford Pro key metrics 2022 2026 Growth 2030 Ford Pro vehicle installed base (UIO) ~12M >13% Connected vehicle mix ~30% ~2x Paid software attach rate ~12% ~3x
Slide 91: Revenue TAM opportunity
Revenue TAM opportunity Present (2022) Future unlock with next generation product Service parts & Connected Connected Vehicles Charging Future services subscriptions productivity + ADAS insurance Commercial Maintenance and Charging Fleet and Carrier model Limitless vehicles sales repair service hard
Slide 92: Aftersales parts attach rate
Aftersales parts attach 34% >50% rate 2022 Growth by 2026
Slide 93: Execution of the Ford Pro strategy will leverage 3 key areas
Execution of the Ford Pro strategy will leverage 3 key areas 1 2 3 Sustain commanding position Strengthen industry-leading Leverage software and new digital through new product launches physical service network architecture to provide differentiated and freshness productivity solutions
Slide 94: Market share in U.S. and Europe
#1 U.S. 41% market share U.S. Class 1-7 full-size truck and van market #1 Europe 15% share Europe commercial vehicle market
Slide 95: Ford Pro vehicle lineup
Transit Transit Transit Transit Ranger Courier Connect Custom Transit Chassis Cab/ Cutaway E-Series Super Duty Super Duty F-53/F-59 F-150 Cutaway F-250/F-350/F-450/F-550 Chassis Cab F-650/F-750 Stripped Chassis
Slide 96: Transit Custom best selling vehicle in the U.K.
Transit Custom #1 best selling vehicle in the U.K.
Slide 97: 8 key E-Transit configurations
8 key E-Transit configurations
Slide 98: Best-selling electric vehicles in their categories since launch
Best-selling electric vehicles in their categories since launch
Slide 99: We will guide our customers through the EV transition
We will guide our customers through the EV transition
Slide 100: Uptime is the lifeblood for all businesses
Uptime is the lifeblood for all businesses
Slide 101: Physical service network
Physical service network 1,400 commercial 1,000 mobile service vehicle centers vehicles
Slide 102: FORDLiive has helped European customers avoid 300,000 days of downtime
FORDLiive has helped European customers avoid 300,000 days of downtime
Slide 103: Ford Pro end-to-end upfit solution
Ford Pro end-to-end upfit solution Manufacturing Upfitter Dealer Customer plant
Slide 104: Service Elite Centers in North America by 2026
100+ Service Elite Centers in North America by 2026
Slide 105: Ford Pro Intelligence
Ford Pro Intelligence Ford Pro’s integrated digital and physical services can lower the cost of ownership by up to 20%
Slide 106: Ford Pro’s next gen digital architecture
Ford Pro’s next gen digital architecture will revolutionize the commercial customer experience
Slide 107: Customer benefits and loyalty flywheel
Physical • Increased productivity service & • #1 EV market leadership Ford Pro insights aftersales Customer • Improved uptime ta & Ford Pro • New services growth Intelligence Da network benefits • Safety & security benefits • Margin expansion • Lower TCO • Customer stickiness loyalty e& Bu im nd pt
Slide 108: ~20% of our EBIT will come from software and service by 2026
~20% of our EBIT will come from software and service by 2026
Slide 109: Customer relationships and product
3. 1. Physical Customer service relationships network 4. 2. Integrated Product software portfolio platform
Slide 110: John Lawler, CFO
— John Lawler CFO
Slide 111: Ford+ investment thesis
Ford+ investment thesis Disruptive technology allows us to leverage foundational strengths to build new capabilities enriching customer experiences and deepening loyalty Customer experience FOUNDATIONAL ENHANCED EXPANDED TAM & STRENGTHS CAPABILITIES VALUE CREATION Leading iconic nameplates Integrate
Slide 112: Ford+
Ford Blue Ford Pro Ford Modele —— kr eel ' | Ford+
Slide 113: Milestones
Milestones + De-risk asset base Record adjusted FCF in 2022 of + Rationalize product portfolio + Reallocate capital to higher return growth opportunities $9B majority from automotive Ford+
Slide 114: Capital allocation (2023-2026)
Capital allocation (2023-2026) Balance sheet/ Product, battery JVs, shareholders 25% and raw materials 60% Ford Blue 25% Ford Model e 43% Adj. Earnings Calls on Ford Pro 32% Distribution/ capital ROIC & FCF go to market 5% Technology, ~20% modernization 10% and software Ford+
Slide 115: Ford+
Ford+
Slide 116: Ford Blue low double-digit EBIT margin by 2026
Ford Blue low double-digit EBIT margin by 2026 1% (1)% 4% Services Exch./Other Struct. Cost 1% (6)% Vol. & Mix Net Pricing 4% Contr. Cost 10% 7.2% 2022 2026 Ford+
Slide 117: Ford Pro mid-teen EBIT margin by 2026
Ford Pro mid-teen EBIT margin by 2026 4% (2)% 1% 1% 6% (3)% Contr. Cost Struct. Cost Services Exch./Other Vol. & Mix Net Pricing 14% 6.6% 2022 2026 Ford+
Slide 118: Ford Model e 8% EBIT margin by year end 2026: Key levers
Ford Model e 8% EBIT margin by year end 2026: Key levers 3% 8% 15% Other 2026 10% Design & (40.6)% Engineering Battery 20% 2022 Scale Ford+
Slide 119: Ford Model e 8% EBIT margin by year end 2026
Ford Model e 8% EBIT margin by year end 2026: Key levers Ford+ Ford Model e 8% EBIT margin by year end 2026 54% (4)% 6% (10)% Vol. & Mix Net Pricing oO COS Struct. Cost 1% 2% Services (Eee (30.6) ja. "ome! Gen vehicles Ford+ 8% 2026
Slide 120: Total company 10% adjusted EBIT margin by 2026
Total company 10% adjusted EBIT margin by 2026 5% (4)% 4% (1)% 1% (1)% Vol. & Mix Net Pricing Contr. Cost Struct. Cost Services Other 10% 6.6% structural cost structural cost 20% of revenue 14% of revenue 2022 2026 Ford+
Slide 121: Art of the possible total Ford - 2030
Art of the possible total Ford - 2030 Present (2022) Future unlock with next generation product Vehicles Service Parts & Charging Connected Connected Future Subscriptions Features Insurance Services Retail & Parts, Service & Ford Pro Partial Autonomy Carrier Model Unlimited Commercial Accessories In
Slide 122: Total Shareholder Return (TSR)
Total Shareholder Return (TSR) Value creation/ Stock price Driving TSR through Distributions 40-50% FCF to shareholders Ford+
Slide 123: EV / EBITDA Multiple
Ford+ plan for growth Higher margins EBITDA margins Autos: 12% BIC industrials: 28% 20 Best-in-class industrials Lower capital intensity EV / EBITDA Multiple 16 Capex/EBITDA 12 S&P Autos: 42% BIC industrials: 10% 500 8 Legacy OEMs Lower cyclicality Peek-to-trough EBIT 4 Autos: 54% BIC industrials: 1