Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Investor Presentation (March 2017)
34 slides from Ford Mtr Co Del's investor presentation, Mar 23, 2017
Slide 1: CFO Let's Chat
CFO LET’S CHAT March 23, 2017 Bob Shanks Executive Vice President & CFO 1
Slide 2: Key topics
Key topics Ford Strategy Ford Credit First Quarter 2017 Guidance Autonomy Global Business Environment 2017 Guidance United States Company Outlook Europe 2
Slide 3: Ford is a solid investment with an attractive upside
Ford is a solid investment with an attractive upside Current Stock Price For t i fy Transform Grow Trucks, Vans, Utilities, Luxury Electrification Performance, Ford Credit, Small Vehicles Autonomy Parts & Service Emerging Markets Mobility Core Core Emerging 3
Slide 4: We are focused on our strategic priorities
We are focused on our strategic priorities VISION MAKING PEOPLE’S LIVES BETTER BY CHANGING THE WAY THE WORLD MOVES STRATEGY Achieve top quartile returns by expanding to an automotive and mobility company through OBJECTIVES business model innovation GROWTH RISK RETURNS REWARDS FINANCIAL ROIC > Cost o
Slide 5: Establishing first quarter 2017 adjusted EPS guidance; full year guidance unchanged
Establishing first quarter 2017 adjusted EPS guidance; full year guidance unchanged Automotive North South Middle East Asia Europe Ford Credit All Other America America & Africa Pacific EPS B / (W) 2016 1Q 2017 -- Cost incl. + Net Pricing -- Cost incl. -- Volume -- Net Pricing -- Residual -- Net Int
Slide 6: GDP and industry assumptions remain strong through 2018 with slight declines in the U.S. and China
GDP and industry assumptions remain strong through 2018 with slight declines in the U.S. and China GDP Growth (Pct) Industry (Mils) For 2017, continue to 2016 2017 2018 2016 2017 2018 expect growth in global GDP and global industry Global* 2.9% 3.5% 3.7% 91.3 92.9 94.6 volume U.S. 1.6% 2.2% 2.1% 17.
Slide 7: U.S. incoming indicators show economy on solid footing at start of 2017
U.S. incoming indicators show economy on solid footing at start of 2017 Jobless Claims (4-Week Moving Avg, Thousands) Consumer Sentiment Index 700 1 120.0 1.0 600 1 100.0 0.8 80.0 500 1 0.6 60.0 400 0 0.4 40.0 300 0 20.0 0.2 200 0 0.0 0.0 1977 1982 1987 1992 1997 2002 2007 2012 2017 1977 1982 1987 1
Slide 8: The utilities segment is growing rapidly in the U.S. as the car segment continues to decline
The utilities segment is growing rapidly in the U.S. as the car segment continues to decline U.S. Industry Segmentation (Percent of Total) U.S. industry has shifted from Truck Utility cars to SUVs – 4 ppts increase Car in utility mix from 2015 to 2017 YTD 16% 17% 18% 36% 38% 39% Ford utility mix has
Slide 9: Our U.S. stocks are in good shape; we continue to take a disciplined approach
Our U.S. stocks are in good shape; we continue to take a disciplined approach to managing stocks Ford U.S. Gross Days Supply Year Ago Latest 99 95 84 79 73 73 Dec. Jan. Feb. Latest (Higher) / Lower Than Year Ago Industry (6) (11) (13) Ford - 4 5 9
Slide 10: Continuing our disciplined approach to incentives
Continuing our disciplined approach to incentives U.S. Incentives* (YoY Change as Pct. of Vehicle Price) Ford incentives growth has Industry Average Ford been below the industry 1.2 1.1 average and decreased 0.9 1.0 1.0 YoY in February and YTD 0.4 F-150 and Super Duty are performing particularly Bet
Slide 11: Our products and our disciplined approach are driving higher transaction prices
Our products and our disciplined approach are driving higher transaction prices U.S. YoY Average Transaction Price* (USD) Ford YoY ATPs continue to Industry Average rise faster than industry Ford $2,258 $1,885 $1,920 Key drivers of ATP $1,580 increases include Super Duty, F-150 and Lincoln $596 $620
Slide 12: Ford well positioned within evolving U.S. policy landscape
Ford well positioned within evolving U.S. policy landscape Impact Changes to… Ford’s Profile Absolute vs. Competition Tax Reform Tax on net imports O Lower Corporate tax rate and other = NAFTA 100% of all pickups produced in the U.S. N/A 80% of 2016 U.S. vehicle sales manufactured O
Slide 13: Higher interest rates impact all areas of the business
Higher interest rates impact all areas of the business Interest Ford Credit Auto Pension Income Interest Expense Hedged with Higher rates Small impact Higher rates Most long-term near-term require due to prior lead to higher debt is fixed rate margin squeeze subvention de-risking return on recovered
Slide 14: Ford of Europe transformation has improved operating margin by over 10 points
Ford of Europe transformation has improved operating margin by over 10 points and profit by almost $3 billion Wholesales* Revenue Market Share Operating Margin Pre-Tax Results (000) (Bils) (Pct) (Pct) (Bils) $1.2 $28.5 4.2% 1,539 7.7% $25.8 7.4% 1,295 (5.9)% $(1.5) 2012 19% 2016 2012 11% 2016 0.3 pp
Slide 15: Ford of Europe made tough and strategic choices to transform the business
Ford of Europe made tough and strategic choices to transform the business; efforts are ongoing Product Brand Cost 35 new products since 2013 Proved a volume brand can Continuing to match capacity including utilities and compete profitably in Europe with demand performance vehicles – Closed Gen
Slide 16: We have also made tough choices globally to continue to transform and grow
We have also made tough choices globally to continue to transform and grow the business Core Emerging Asia Pacific Created an innovative structure and – Discontinued Australian production -- invested in Argo AI now profitable Acquired and are expanding Chariot – Restructured ASEAN -- now profi
Slide 17: Ford Credit on track for 2017 guidance; results to improve in 2018
Ford Credit on track for 2017 guidance; results to improve in 2018 with lower supplemental depreciation 10-K Lease Sensitivity Example – 1% Reduction in Auction Values Income Statement Recognition Continue to expect 2017 PBT of about $1.5 billion and 2018 to improve Guidance reflects significant sup
Slide 18: Ford Credit's balance sheet supports Ford globally
Ford Credit’s balance sheet supports Ford globally; portfolio managed with an enterprise view Ford Credit Net Receivables – December 31, 2016 (Bils) Consumer Finance Receivables Non-Consumer Finance Receivables Net Investment in Operating Leases – North America Ford Credit profitably Net Investment
Slide 19: Ford Credit U.S. portfolio produces consistent and predictable results
Ford Credit U.S. portfolio produces consistent and predictable results Average Retail Term (Months) Lease Mix of Retail Sales (%) 67 30% Industry Industry 64 64 20% 19% 65 22% 61 14% 14% Robust portfolio Ford Credit 59 Ford performance reflects 2006 2011 2016 2006 2011 2016 disciplined and consisten
Slide 20: New terms for technologies and businesses in the autonomous vehicle space
New terms for technologies and businesses in the autonomous vehicle space Transportation as a Service (TaaS) Point to point mobility for a fee – Ride-Sharing, Ride-Hailing, Dynamic Shuttle or Package Delivery Autonomous Vehicle (AV) Virtual Driving System (VDS) Autonomous Vehicle Platform (AVP) Comp
Slide 21: We continue to progress our autonomy plans with our investment in Argo AI
We continue to progress our autonomy plans with our investment in artificial intelligence company Argo AI Argo AI is an independent subsidiary of Ford Motor Company; consolidated and reported in auto segment Argo AI will develop the Virtual Driver System, which could be licensed to other compani
Slide 22: Our 2017 Company guidance remains unchanged
Our 2017 Company guidance remains unchanged EPS Total Company Automotive Automotive Automotive Adjusted Adjusted Segment Segment Segment Operating Adjusted Effective Pre-Tax Results* EPS* Revenue Operating Margin Cash Flow Tax Rate* (Pct) B / (W) 2016 2016 FY Results $10.4B $1.76 $141.5B 6.7% $6.4B
Slide 23: Our 2017 business unit guidance remains unchanged
Our 2017 business unit guidance remains unchanged Automotive North South Middle East Asia America America Europe & Africa Pacific Ford Credit All Other PBT B / (W) 2016 -- Volume, Mix + Net Pricing -- Exchange + Cost + Volume, Mix -- Residual -- Net Interest (Brexit) Values Expense -- Emerging + Vol
Slide 24: Our guidance is unchanged from prior reviews
Our guidance is unchanged from prior reviews – profit remains strong in 2017, about $9 billion; profit strengthens in 2018 Total Company Adjusted Pre-Tax Profit* (Bils) Core Total Emerging $10.4 ~$9 2016 2017 2018 * See Appendix for reconciliation to GAAP and definitions 24
Slide 25: Key takeaways
Key takeaways 1Q adjusted EPS expected at $0.30 to $0.35 per share; Full Year 2017 guidance remains unchanged Global GDP and industry are strong; U.S. economic indicators solid U.S. utilities segment continues to grow; same trend in Europe and China We continue to take a disciplined approach
Slide 26: Ford is a solid investment with an attractive upside
Ford is a solid investment with an attractive upside Current Stock Price For t i fy Transform Grow Trucks, Vans, Utilities, Luxury Electrification Performance, Ford Credit, Small Vehicles Autonomy Parts & Service Emerging Markets Mobility Core Core Emerging 26
Slide 27: Go Further
Go Further
Slide 28: 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 29: Appendix
APPENDIX
Slide 30: Net income reconciliation to adjusted pre-tax profit
Net income reconciliation to adjusted pre-tax profit (Mils) 4Q FY 2015 2016 2015 2016 Net income / (loss) attributable to Ford (GAAP) $ 1,868 $ (783) $ 7,373 $ 4,596 Income / (loss) attributable to non-controlling interests (4) 2 (2) 11 Net income / (loss) $ 1,864 $ (781) $ 7,371 $ 4,607 Less: (Prov
Slide 31: Total Company special items
Total Company special items (Mils) 4Q FY 2015 2016 2015 2016 Pension and OPEB Remeasurement Gain / (Losses) Year end net pension and OPEB remeasurement loss $ (698) $ (2,985) $ (698) $ (2,985) Other pension remeasurement loss -- -- -- (11) Separation-related Actions $ -- $ (11) $ -- $ (304) Other It
Slide 32: Total Company earnings per share reconciliation to adjusted earnings per share
Total Company earnings per share reconciliation to adjusted earnings per share 2016 4Q FY Diluted After-Tax Results (Mils) Diluted after-tax results (GAAP) $ (783) $ 4,596 Less: Impact of pre-tax and tax special items (2,001) (2,458) Adjusted net income – diluted (Non-GAAP) $ 1,218 $ 7,054 Basic and
Slide 33: 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 34: Definitions and calculations
Definitions and calculations Automotive Records References to Automotive records for operating cash flow, operating margin and business units are since at least 2000 Wholesales and Revenue Wholesale unit volumes include all Ford and Lincoln badged units (whether produced by Ford or by an unconso
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