Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor — Deutsche Bank Global Automotive Conference 2019
55 slides from Ford Mtr Co Del's conference presentation, Jan 16, 2019
Slide 1: Deutsche Bank Global Automotive Conference Ford Motor Company
Deutsche Bank Global Automotive Conference Ford Motor Company January 16, 2019
Slide 2: Important Notice Regarding This Presentation
Important Notice Regarding This Presentation • This presentation includes our preliminary view of 2018 results. Our actual results could differ materially from the preliminary results included in this presentation. We will provide additional detail on 2018 results in our earnings presentation on Jan
Slide 3: Jim Hackett, Chief Executive Officer
Jim Hackett Chief Executive Officer
Slide 4: Creating Tomorrow, Together
Creating Tomorrow, Together Our Belief Freedom of movement drives human progress. Our To become the world’s most trusted company, Aspiration designing smart vehicles for a smart world. Passion for Product & Deep Customer Insight Our Plan for Value Creation Winning Propulsion Autonomous Mobility Port
Slide 5: Reshaping And Transforming Company – Sharpening Competitiveness While Improving Results
Reshaping And Transforming Company – Sharpening Competitiveness While Improving Results � $11B � VW � Commitment to restructuring agreements fitness opportunity OCT MARCH APRIL JULY JAN 2017 2018 2018 2018 2019 � Focus on fastest-growing � Mahindra � Europe and most MOU redesign profitable segments
Slide 6: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meet our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification to create exciting iconic high-end p
Slide 7: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meet our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification efforts to create exciting iconic hi
Slide 8: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meeting our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification to create Choices exciting iconic
Slide 9: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meeting our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification efforts to create exciting iconic
Slide 10: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meeting our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification efforts to create exciting iconic
Slide 11: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meeting our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification efforts to create exciting iconic
Slide 12: Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns
Global Redesign Provides Roadmap To Improve Competitiveness, Profitability And Returns Winning � Shifting our vehicle portfolio to better meeting our customers’ Portfolio needs, focusing on our product strengths Propulsion � Re-deploying capital into electrification efforts to create exciting iconic
Slide 13: Creating Tomorrow, Together
Creating Tomorrow, Together Our Freedom of movement drives human progress. Belief Our To become the world’s most trusted company, Aspiration designing smart vehicles for a smart world. • Confident in our plan to redesign our business Passion for Product & Deep Customer Insight Our Plan for Value Cre
Slide 14: Jim Farley, President, Global Markets
Jim Farley President, Global Markets
Slide 15: Global Segmentation Shift Toward Trucks And Utilities Plays To Strengths And Informs Capital Allocation
Global Segmentation Shift Toward Trucks And Utilities Plays To Strengths And Informs Capital Allocation Global Industry Segmentation (% Of Total) Capital Allocation Shift (% Of Total) Truck / Utilities Car 43% 53% 64% 90% 57% 47% 36% 10% 2015 2019 2016 - 2020 2019 - 2023 15
Slide 16: Ford Is The Best-Selling Truck And Van Brand In The World
Ford Is The Best-Selling Truck And Van Brand In The World Note: 2017 Results 16
Slide 17: Broad Truck And Van Franchises Lead Globally
Broad Truck And Van Franchises Lead Globally #1 F-Series Full-size Ranger: #2 Medium Transit: #1 Cargo #1 Pickup Globally #2 Pickup Outside U.S. #1 Van Globally F-Series (+series, cab, powertrain option etc.) Medium / Small Pickup Van F-750 Super Duty Ranger Chassis Cab Transit Chassis Cab F-650 Sup
Slide 18: Global Truck And Van Business Is Large And Delivers Compelling Returns
Global Truck And Van Business Is Large And Delivers Compelling Returns 2.4M $72B $10B 14% 38% Volume Revenue EBIT EBIT Margin ROIC Note: 2017 Results 18
Slide 19: Expanding Van Business To Capitalize On Segment Growth
Expanding Van Business To Capitalize On Segment Growth Global Industry Market Transit Family Light Commercial Bus / Van Global Industry Volume (000) Ford Revenue 2,987 2,937 2,809 2,697 2015 2016 2017 2018 19
Slide 20: Building On Global Medium Pickup Strength With Ranger Raptor And Relaunch Of Ranger In North America
Building On Global Medium Pickup Strength With Ranger Raptor And Relaunch Of Ranger In North America Global Industry Market Medium Pickup Segment Trend (000) Global Industry Volume (000) 3,166 Ford Revenue 2,929 2,686 2,576 2015 2016 2017 2018 2019 20
Slide 21: Unique F-Series DNA Creates Formidable Competitive Moat
Unique F-Series DNA Creates Formidable Competitive Moat Product Capability Large and Loyal Owner Base � and Durability � � Built Ford Tough Brand Strength � Experienced Dealer Network Deep Customer Knowledge and Continuous Innovation � Insights � Breadth of Product Trusted Fleet and Commercial � and
Slide 22: Dominant Full-size Pickup Truck Position And U.S. Results Demonstrate Deep Understanding Of Customer Needs
Dominant Full-size Pickup Truck Position And U.S. Results Demonstrate Deep Understanding Of Customer Needs U.S. Results Average Sales Transaction Advantage Price Share Over Chevy 2018 $46,700 37.6% 324K All-new All-new F-150 Super Duty launched launched September September 2015 $42,000 35.7% 180K 20
Slide 23: Extending Leadership In Trucks And Vans
Extending Leadership In Trucks And Vans • Electrifying F-Series and Transit • Increasing connectivity • Expanding network and digital services • Growing high-end and affordable derivatives • Building global alliances 23
Slide 24: Ford Global Utilities
Ford Global Utilities 24
Slide 25: Growing Utility Mix With Exciting, New Product Lineup
Growing Utility Mix With Exciting, New Product Lineup Global Utility (Percent Of Total Volume) Global Industry Ford 40% 38% 32% 29% 2018 2021 25
Slide 26: U.S. Utility Portfolio Freshens Significantly Over Next Two Years
U.S. Utility Portfolio Freshens Significantly Over Next Two Years U.S. Ford and Lincoln Utilities Refreshed Products Compared With 2018 EXPLORER 50% 36% BRONCO SMALL RUGGED UTLITY MUSTANG INSPIRED BEV ESCAPE 2019 2020 LINCOLN AVIATOR LINCOLN UTILITY 26
Slide 27: China Utility Portfolio Freshens Significantly Over Next Two Years
China Utility Portfolio Freshens Significantly Over Next Two Years China Ford and Lincoln Utilities Refreshed Products Compared With 2018 55% EXPLORER KUGA TERRITORY TERRITORY NEW SUV 20% 2019 2020 LINCOLN AVIATOR LINCOLN UTILITY 27
Slide 28: Early Results Of SUV Product Offensive Are Positive, Exemplified By All-New Expedition
Early Results Of SUV Product Offensive Are Positive, Exemplified By The Success Of All-New Expedition U.S. Results Average Transaction Conquest Price Share From GM 2018 $63,600 18% 21% 2017 $51,000 12% 18% All-new Expedition launched November 2017 28
Slide 29: All-New Explorer Raises The Bar Again In Large Utilities
All-New Explorer Raises The Bar Again In Large Utilities • All-new RWD architecture • Smarter and more capable • Broadest-ever lineup with richer mix 29
Slide 30: Ford Will Define The Future Of SUVs Again With New Mustang-inspired Electric Performance Utility
Ford Will Define The Future Of SUVs Again With New Mustang-inspired Electric Performance Utility 30
Slide 31: Continue To Strengthen Utility Position Through Innovation
Continue To Strengthen Utility Position Through Innovation • Electrifying • Increasing connectivity and digital services • Expanding driver assist technologies • Innovating silhouettes • Building global alliances for developing markets 31
Slide 32: Redesigning Regional Businesses
Redesigning Regional Businesses North America • “Return to 10” margin objective • Deep reorganization of salary workforce to enhance effectiveness and reduce costs North America • Significant wave of new truck and SUV product launches in 2019 profitable and Europe growing; • Fundamental redesign of
Slide 33: Redesigning Regional Businesses
Redesigning Regional Businesses North America • “Return to 10” margin objective North America • Deep reorganization of salary workforce to enhance effectiveness and reduce costs profitable and • Significant wave of new truck and SUV product launches in 2019 growing; remake of Europe • Fundamental re
Slide 34: Redesigning Regional Businesses
Redesigning Regional Businesses North America • “Return to 10” margin objective • Deep reorganization of salary workforce to enhance effectiveness and reduce costs North America • Significant wave of new truck and SUV product launches in 2019 profitable and Europe growing; • Fundamental redesign of
Slide 35: Redesigning Regional Businesses
Redesigning Regional Businesses North America • “Return to 10” margin objective • Deep reorganization of salary workforce to enhance effectiveness and reduce costs North America • Significant wave of new truck and SUV product launches in 2019 profitable and Europe • Fundamental redesign of Europe bu
Slide 36: Redesigning Regional Businesses
Redesigning Regional Businesses North America • “Return to 10” margin objective • Deep reorganization of salary workforce to enhance effectiveness and reduce costs North America • Significant wave of new truck and SUV product launches in 2019 profitable and Europe • Fundamental redesign of Europe bu
Slide 37: Alliances Are Catalysts For Global Redesign: VW And Mahindra
Alliances Are Catalysts For Global Redesign: VW And Mahindra VOLKSWAGEN MAHINDRA • Alliance to deliver medium pickup trucks • Will co-develop midsize compact sport for global customers starting in 2022, and utility vehicle for India; opportunities in follow with commercial vans other emerging market
Slide 38: Bob Shanks, Chief Financial Officer
Bob Shanks Chief Financial Officer
Slide 39: Full Year 2018 Preliminary Results
Full Year 2018 Preliminary Results Company Revenue $160.3B 2.0% Driven by strong mix and net pricing Company Adj. EBIT* $7.0B 4.4% $ Company Adj. EBIT Margin* $2.6B lower YoY, mainly China and Europe NA EBIT Margin 7.9% Strong mix and net pricing Ford Credit EBT $2.6B Best result in 8 years Company
Slide 40: An Investment Grade Rating And A Strong Balance Sheet Remain The Foundation Of Ford's Financial Strategy
An Investment Grade Rating And A Strong Balance Sheet Remain The Foundation Of Ford’s Financial Strategy Investment Incremental Grade Rating / Cash Funds Fund The Plan Strong Balance New Sheet Opportunities 40
Slide 41: Ford's Key Financial Targets Focus On Growth, Operating And Capital Efficiency, Cash Flow And Balance Sheet Strength
Ford’s Key Financial Targets Focus On Growth, Operating And Capital Efficiency, Cash Flow And Balance Sheet Strength* Revenue Growth > Global GDP $ Adj. EBIT Margin* 8%+ Adj. ROIC* High Teens+ Adj. Cash Conversion* 65%+ Adjusted Debt To EBITDA <2.5 * See Appendix for detail and definitions 41
Slide 42: For 2019, We See The Potential For YoY Improvement Across All Key Metrics
For 2019, We See The Potential For YoY Improvement Across All Key Metrics 2019 Revenue Growth $ Adj. EBIT Margin* Potential Adj. ROIC* Improvement From 2018 Adj. Cash Conversion* Adjusted Debt To EBITDA * See Appendix for detail and definitions 42
Slide 43: For 2019, Our Outlook For GDP Growth And Industry Volume Suggests Neutral To Modestly Negative Headwinds
For 2019, Our Outlook For GDP Growth And Industry Volume Suggests Neutral To Modestly Negative Headwinds Metric 2018* 2019 Assumption Metric 2018* 2019 Assumption Global GDP Flat Global Industry Volume Flat (% Change) 3.7% (Mils.) 95.2 Decelerating Low 17s U.S. 2.9% U.S. 17.7 Incl medium-heavy truck
Slide 44: Our 2019 Performance Will Depend On Many Factors
Our 2019 Performance Will Depend On Many Factors TAILWINDS HEADWINDS Tariffs Strong New Product Introductions Continued High Commodity Costs Fitness Initiatives Exchange Business Redesign Smart Redesign Used Vehicle Auction Values Europe Higher U.S. Interest Rates China Recovery Higher Effective U.S
Slide 45: Creating Tomorrow, Together
Creating Tomorrow, Together Our Freedom of movement drives human progress. Belief Our To become the world’s most trusted company, Aspiration designing smart vehicles for a smart world. • Confident in our plan to redesign our business Passion for Product & Deep Customer Insight Our Plan for Value Cre
Slide 46: < 0&3 o
< 0&3 o
Slide 47: 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 48: Appendix
Appendix
Slide 49: Preliminary Company Net Income Reconciliation To Adjusted EBIT
Preliminary Company Net Income Reconciliation To Adjusted EBIT (Mils) 4Q FY 2017 2018 2017 2018 Net income / (Loss) attributable to Ford (GAAP) $ 2,520 $ (116) $ 7,731 $ 3,677 Income / (Loss) attributable to non-controlling interests 4 4 26 18 Net income / (Loss) $ 2,524 $ (112) $ 7,757 $ 3,695 Less
Slide 50: Preliminary Company Net Cash Provided By Operating Activities Reconciliation To Adjusted Operating Cash Flow
Preliminary Company Net Cash Provided By / (Used In) Operating Activities Reconciliation To Adjusted Operating Cash Flow (Mils) 4Q FY 2017 2018 2017 2018 Company net cash provided by / (used in) operating activities (GAAP) $ 3,147 $ 1,391 $ 18,096 $ 15,056 Less: Items not included in Company Adjuste
Slide 51: Preliminary Company Earnings Per Share Reconciliation To Adjusted Earnings Per Share
Preliminary Company Earnings Per Share Reconciliation To Adjusted Earnings Per Share 4Q FY 2017 2018 2017 2018 Diluted After-Tax Results (Mils) Diluted after-tax results (GAAP) $ 2,520 $ (116) $ 7,731 $ 3,677 Less: Impact of pre-tax and tax special items 971 (1,320) 608 (1,517) Adjusted net income –
Slide 52: Preliminary Company Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate
Preliminary Company Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate 2018 Memo: 4Q FY FY 2017 Pre-Tax Results (Mils) Income / (Loss) before income taxes (GAAP) $ (17) $ 4,345 $ 8,159 Less: Impact of special items (1,179) (1,429) (289) Adjusted earnings before taxes (Non-GAAP) $ 1,162
Slide 53: 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 supplement
Slide 54: Non-GAAP Financial Measures That Supplement GAAP Measures
Non-GAAP Financial Measures That Supplement GAAP Measures • Company Adjusted Operating Cash Flow (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 element
Slide 55: Definitions And Calculations
Definitions And Calculations Automotive Records • References to Automotive records for EBIT margin and business units are since at least 2009 Wholesales and Revenue • Wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconsolidated affiliate) that ar
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