Ford Mtr Co Del · NYSE:F
Ford Mtr Co Del — Ford Motor Company — Q3 2021 Earnings Presentation
39 slides from Ford Mtr Co Del's earnings presentation, Oct 27, 2021
Slide 1: Q3 2021 Earnings Review
Q3 2021 Earnings Review October 27, 2021 Rendition of future BlueOval City, Stanton, Tennessee, part of a $7B planned investment by Ford - the largest ever one-time investment in electrification by an auto company in the U.S.
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: 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 Electric Iconic Integrated Hardwa
Slide 4: Executing The Investment Thesis To Deliver Ford+
Executing The Investment Thesis To Deliver Ford+ FOUNDATIONAL STRENGTHS + ENHANCED CAPABILITIES = EXPANDED TAM & VALUE CREATION Iconic Nameplates Integrated Hardware & Software Electric The first Mustang Mach-E manufactured in China 2021 Ford EVOS: “Co-driver mode” enables Building pre-production un
Slide 5: Executing The Investment Thesis To Deliver Ford+
Executing The Investment Thesis To Deliver Ford+ Disruptive Disruptive Technology Technology Allows Allows Us Us to to Leverage Leverage Foundational Foundational Strengths Strengths to to Build Build New New Capabilities Capabilities –– Enriching Enriching Customer Customer Experiences Experiences
Slide 6: Executing The Investment Thesis To Deliver Ford+
Executing The Investment Thesis To Deliver Ford+ Disruptive Disruptive Technology Technology Allows Allows Us Us to to Leverage Leverage Foundational Foundational Strengths Strengths to to Build Build New New Capabilities Capabilities –– Enriching Enriching Customer Customer Experiences Experiences
Slide 7: Third Quarter Financial Results
Third Quarter Financial Results $35.7B $3.0B 8.4% $7.7B $0.51 Down $1.8B Down $0.7B Down 1.3 ppts Up $1.2B Down $0.14 2021 Ford EVOS ST-Line, featuring industry-leading interface, available to customers in China later this year Ye a r - To - D a t e $98.7B $8.9B 9.0% $2.2B $1.52 Up $7.5B Up $7.8B Up
Slide 8: Q3 Revenue And Adjusted EBIT
Q3 Revenue And Adjusted EBIT Wholesale Units (000) Adjusted EBIT ($B) & Revenue ($B) & EBIT Margin (%) Wholesale Units $4.8 In Automotive, continued to effectively navigate semiconductor constraints by $37.5 $36.0 $36.2 $3.6 prioritizing customer orders, launch $35.7 $3.0 and profitable vehicles • W
Slide 9: Q3 Cash Flow, Cash Balance And Liquidity ($B)
Q3 Cash Flow, Cash Balance Adjusted Cash Balance And Liquidity ($B) Free Cash Flow & Liquidity Liquidity Adjusted FCF of $7.7B driven by: $7.7 $47.2 $47.4 $6.6 $45.5 $46.9 • Expected working capital improvements as production $39.8 $41.0 increased with improved $1.9 semiconductor supply $39.3 • Auto
Slide 10: Q3 2021 Results ($B)
Q3 2021 Results ($B) $3.0 $2.5 • Company Adjusted EBIT reflects strong Automotive and Ford Credit $1.8 results $1.1 • Special Items reflect primarily global redesign costs in South America and India $(0.1) $(0.3) $(0.3) $(0.4) $(0.7) Taxes / Automotive Mobility Ford Credit Corporate Company Interest
Slide 11: Q3 2021 Adjusted EBIT ($B)
Q3 2021 Adjusted EBIT ($B) North South Total Total Europe China IMG America America Auto Company Q3 2020 $ 3.2 $ (0.1) $ (0.4) $ (0.1) $ 0.1 $ 2.7 $ 3.6 YoY Change: Volume / Mix $ (1.5) $ (0.1) $ (0.1) $ (0.1) $ (0.0) $ (1.8) $ (1.8) Net Pricing 1.9 0.2 0.3 0.0 0.0 2.4 2.4 Material / Freight $(0.1)
Slide 12: North America
North America Leadership in trucks and Ford Pro commercial vehicles; plus, utilities and Wholesale Units (000) Revenue ($B) iconic nameplates $25.3 $23.0 $24.0 651 $22.0 540 533 546 Delivering Ford+ $15.0 • Q3 EBIT Margin of 10.1%; 9.0% 272 327 $10.9 YTD ‒ Pricing and mix more than offset Q2 2020 Q3
Slide 13: South America
South America Lean, de-risked and asset-light business, focused on key franchises like Ranger and Wholesale Units (000) Revenue ($B) Transit 63 Delivering Ford+ $0.9 48 $0.6 $0.6 • Continued YoY EBIT improvement; $0.4 $0.5 business run rate approaches 14 18 18 20 $0.2 breakeven Q2 2020 Q3 2020 Q4 20
Slide 14: Europe
Europe Commercial vehicle strength with Ford Pro, focused passenger portfolio Wholesale Units (000) * Revenue ($B) with key imports 339 $7.1 $7.1 $6.1 278 Delivering Ford+ 239 $5.7 $5.6 218 182 • Underlying trajectory supports 154 $3.6 6% EBIT Margin target by 2023 • Commercial vehicle brand Q2 2020
Slide 15: China
China Focused on strength in Lincoln brand, commercial vehicles and Ford utility Wholesale Units (000) * Revenue ($B) portfolio JV Volume 202 $1.0 169 164 162 $0.8 $0.8 $0.8 Delivering Ford+ 190 150 150 $0.6 $0.6 156 160 • Continued YoY EBIT improvement 146 140 149 • Lincoln extends success in the m
Slide 16: International Markets Group
International Markets Group Wholesale Units (000) * Revenue ($B) Portfolio strengths of Ranger pickup and Everest 93 Delivering Ford+ 76 82 87 $2.5 $2.5 66 $2.3 $2.0 • India restructuring: cessation of $1.9 36 vehicle manufacturing; focused $1.0 on iconic imports, including EVs Q2 2020 Q3 2020 Q4 20
Slide 17: Mobility
Mobility Focused on large scale commercial deployment of autonomous vehicles for moving people and goods Delivering Ford+ EBIT ($B) Q3 EBIT YoY ($B) • Support Argo AI’s access to public financing • Continue to make real progress on the AV vehicle, operating domain $0.0 and SDS $(0.0) $(0.2) • Ration
Slide 18: Ford Credit
Ford Credit Best-in-class finance company is a strategic asset and competitive Auction Values (Per Unit) * U.S. Retail LTR Ratio (%) advantage $28,530 $28,045 Delivering Ford+ 0.37% $22,760 $22,160 0.30% • Auction values of off-lease vehicles $20,585 $21,265 0.22% continue at near-record levels 0.15
Slide 19: Cash Flow And Balance Sheet ($B)
Cash Flow And Balance Sheet ($B) Third Quarter Year-To-Date Balance Sheet 2020 2021 2020 2021 2020 2021 Dec. 31 Sep. 30 Company Adj. EBIT excl. Ford Credit $ 2.5 $ 1.9 $ (0.6) $ 5.2 Company Excl. Ford Credit Capital Spending $ (1.2) $ (1.6) $ (4.2) $ (4.4) Company Cash Balance $ 30.8 $ 31.5 Deprecia
Slide 20: Special Items ($B)
Special Items ($B) Third Quarter Year-To-Date Global Redesign 2020 2021 2020 2021 Potential 2022+ Actions and Cash Effects Potential 2021 Actions and Cash Effects Recorded 2018 - 2020 Global Redesign South America $ (0.1) $ (0.2) $ (0.1) $ (0.7) Europe (0.2) (0.1) (0.4) (0.3) Russia 0.0 0.0 0.0 0.0
Slide 21: 2021 Outlook ($B)
2021 Outlook ($B) 2021 Outlook 2020 Actual Adjusted EBIT $10.5 - $11.5 $2.8 Adjusted FCF $4.0 - $5.0 $1.5 Capital Spending $6.0 - $6.5 $5.7 Pension Contributions About $0.8 $0.6 Global Redesign EBIT Charges $1.7 - $2.2 $3.4 Global Redesign Cash Effects $2.2 - $2.7 $0.5 Rendition of future Rouge Elec
Slide 22: Initial Thoughts On 2022
Initial Thoughts On 2022 Underlying Strengths Of The Business Operating Environment • Significant new iconic high-volume nameplates – • Supply constraints remain fluid; expect 2022 Mustang Mach-E, Bronco, Maverick, E-Transit, wholesales to be up about 10% and F-150 Lightning • Enthusiasm for new nam
Slide 23: Cautionary Note On Forward-Looking Statements
Cautionary Note On Forward-Looking Statements Statements included or incorporated by reference herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptio
Slide 24: Appendix
Appendix China–produced 2022 Lincoln Corsair PHEV
Slide 25: Key Metrics
Key Metrics Wholesale Units (000) Market Share (%) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 North America 272 651 540 533 327 546 14.2 % 13.6 % 12.1 % 12.5 % 10.4 % 11.2 % South America 14 48 63 18 18 20 6.5 5.7 6.0 3.6 2.3 2.4 Europe 154 239 33
Slide 26: Key Metrics
Key Metrics EBIT ($B) EBIT Change (%) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 North America $ (0.9) $ 3.2 $ 1.1 $ 2.9 $ 0.2 $ 2.4 (156) % 59 % 53 % N/M 120 % (24) % South America (0.2) (0.1) (0.1) (0.1) (0.1) 0.0 19 34 40 35 48 102 Europe (0.7)
Slide 27: Key Metrics
Key Metrics Wholesale Units (000) Market Share (%) 2021 B / (W) 2021 B / (W) 2021 B / (W) 2021 B / (W) Q3 2020 Q3 2021 2020 YTD 2021 YTD Q3 2020 Q3 2021 2020 YTD 2021 YTD 2020 2020 2020 2020 North America 651 546 (104) 1,541 1,407 (134) 13.6 % 11.2 % (2.4) ppts 13.7 % 11.3 % (2.4) ppts South America
Slide 28: Q3 Results ($M)
Q3 Results ($M) Thi rd Quarter Year-To-Date 2020 2021 2021 B / (W) 2020 2020 2021 2021 B / (W) 2020 North America $ 3,202 $ 2,423 $ (779) $ 2,629 $ 5,566 $ 2,937 South America (108) 2 110 (385) (157) 228 Europe (444) (52) 392 (1,260) 5 1,265 China (57) (39) 18 (434) (177) 257 International Markets G
Slide 29: Year-To-Date 2021 Adjusted EBIT ($B)
Year-To-Date 2021 Adjusted EBIT ($B) North South Total Total Europe China IMG America America Auto Company Year-To-Date 2020 $ 2.6 $ (0.4) $ (1.3) $ (0.4) $ (0.1) $ 0.4 $ 1.1 YoY Change: Volume / Mix $ (1.8) $ (0.1) $ (0.3) $ (0.1) $ 0.1 $ (2.2) $ (2.2) Net Pricing 6.0 0.4 0.6 0.0 0.1 7.2 7.2 Materi
Slide 30: Quarterly Results ($M)
Quarterly Results ($M) 2020 2021 Q1 Q2 Q3 Q4 Ful l Year Q1 Q2 Q3 North America $ 373 $ (946) $ 3,202 $ 1,082 $ 3,711 $ 2,949 $ 194 $ 2,423 South America (112) (165) (108) (105) (490) (73) (86) 2 Europe (149) (667) (444) 409 (851) 341 (284) (52) China (241) (136) (57) (65) (499) (15) (123) (39) Inter
Slide 31: Net Income / (Loss) Reconciliation To Adjusted EBIT ($M)
Net Income / (Loss) Reconciliation To Adjusted EBIT ($M) Third Quarter Year-To-Date Memo: 2020 2021 2020 2021 FY 2020 Net income / (loss) attributable to Ford (GAAP) $ 2,385 $ 1,832 $ 1,509 $ 5,655 $ (1,279) Income / (Loss) attributable to non-controlling interests 5 (10) 6 (18) 3 Net income / (loss
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) Year-To-Date Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2020 2021 Net cash provided by / (used in) operating activities (GAAP) $ (473) $ 9,115 $ 11,088 $ 4,539 $ 4,492 $ 756 $ 7,008 $ 19,730 $
Slide 33: Earnings Per Share Reconciliation To Adjusted Earnings Per Share
Earnings / (Loss) Per Share Reconciliation To Adjusted Earnings / (Loss) Per Share Third Quarter Year-To-Date 2020 2021 2020 2021 Diluted After-Tax Results ($M) Diluted after-tax results (GAAP) $ 2,385 $ 1,832 $ 1,509 $ 5,655 Less: Impact of pre-tax and tax special items (231) (209) 1,220 (461) Adju
Slide 34: Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate
Effective Tax Rate Reconciliation To Adjusted Effective Tax Rate 2021 Memo: Q3 Year-To-Date Full Year 2020 Pre-Tax Results ($M) Income / (Loss) before income taxes (GAAP) $ 1,885 $ 6,562 $ (1,116) Less: Impact of special items (669) (964) (2,246) Adjusted earnings before taxes (Non-GAAP) $ 2,554 $ 7
Slide 35: Adjusted ROIC ($B)
Adjusted ROIC ($B) Four Quarters Four Quarters Adjusted Net Operating Profit / (Loss) After Cash Tax Ending Q3 2020 Ending Q3 2021 Net income / (loss) attributable to Ford $ (0.2) $ 2.9 Add: Non-controlling interest 0.0 (0.0) Less: Income tax (0.4) 0.1 Add: Cash tax (0.3) (0.6) Less: Interest on deb
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 Slide 4 1. 2021 Ford EVOS ST-Line, available late 2021 2. 2022 Ford F-150 Lightning, available starting Spring 2022 3. Initial deployments late 2021 in Miami, FL, Washington D.C., followed by Austin, TX in 2022 A16 39