- Says results will now be reported by Ford Blue (iconic gas,
hybrid vehicles), Ford Model e (breakthrough EVs) and Ford Pro
(commercial products, services), not by regional markets
- Believes Ford+ will produce solid growth and sustained, healthy
profitability and returns by deploying new technologies, achieving
higher quality, lowering costs and complexity
- Reconfirms late-2026 margin targets of 10% for company adjusted
EBIT and 8% for Ford Model e – the latter driven by ambitious
scaling of EV production run rates
- Points to Ford Pro as a powerful illustration of how
customer-relevant, software-enabled vehicles and services will
generate value across all three segments
- Reaffirms full-year 2023 adjusted EBIT guidance of $9 billion
to $11 billion; provides segment-level outlooks; plans to share
more information at Capital Markets Day on May 22
Ford today will walk investors, analysts and others through how
the company is now organized and operating – and will report
financial results – based on three new global business segments
that are focused on different automotive customers, rather than by
geographic regions.
Leaders will also summarize ways that the segments will deliver
exceptional value to their respective customers and, together, for
other Ford stakeholders: Ford Blue with iconic gas and hybrid
vehicles, Ford Model e via breakthrough digital capabilities and
electric vehicles, and Ford Pro with products and services to help
commercial customers maximize their operations.
The “teach-in” event will be held at 10:00 a.m. Eastern Time at
the New York Stock Exchange and streamed, “live” and on replay, via
shareholder.ford.com.
“We’ve essentially ‘refounded’ Ford, with business segments that
provide new degrees of strategic clarity, insight and
accountability to the Ford+ plan for growth and value,” CFO John
Lawler said. “It’s not only about changing how we report financial
results; we’re transforming how we think, make decisions and run
the company, and allocate capital for highest returns.”
Lawler said the teach-in will help investors and analysts
develop new models for projecting, tracking and valuing the
individual and collective performances of Ford’s new segments,
after decades of the business being managed and reporting financial
results by regional markets.
Ford Controller Cathy O’Callaghan will highlight how three
principles guided the new segmentation:
- Fairly representing the business models of each segment
- Giving the Ford Blue, Ford Model e and Ford Pro teams both the
latitude and accountability for their success, and
- Being easy to understand and simple to execute, so that
everyone can see how Ford is generating value for customers and
other stakeholders.
“This wasn’t a simple proforma spreadsheet exercise,”
O’Callaghan said. “It represents nearly a year of disciplined work
by hundreds of Ford people to help us capture the huge strategic
opportunity of Ford+ and provide unique transparency into our
business.”
During the event and in supporting material available online –
including recast segment results for 2022 by quarter and full-year
2021 (summary attached) – Ford will explain how assets are assigned
and revenue and costs are reported across the segments. The company
will also describe accounting for products supplied between
segments. For example, vehicles sold by Ford Pro to its commercial
customers will be manufactured by Ford Blue or Ford Model e.
Additionally, Ford today will:
- Reiterate a 10% margin target for company adjusted EBIT
(earnings before interest and taxes) by the end of 2026
- Confirm that, among the new business segments, Ford Blue and
Ford Pro are both solidly profitable and well-positioned for
growth
- Repeat its 8% EBIT margin objective by late 2026 for Ford Model
e, which is tied to planned global electric vehicle production run
rates of 600,000 units by the end of 2023 and two million by the
end of 2026
- Say that the contribution margin of Ford Model e’s
first-generation EVs – representing revenue minus certain variable
costs – is expected to approach break-even this year, but be more
than offset on an EBIT basis by higher investments in new EV
products and manufacturing capacity
- Reiterate that it anticipates full-year adjusted EBIT to be $9
billion to $11 billion – and adjusted free cash flow to be about $6
billion – based on assumptions outlined in the fourth-quarter 2022
earnings release on Feb. 2, and
- Provide 2023 segment-level EBIT expectations: about $7 billion
for Ford Blue, a modest improvement from last year; a full-year
loss of about $3 billion for Ford Model e; and EBIT approaching $6
billion for Ford Pro, nearly twice its 2022 earnings.
Ford plans to announce first-quarter results on Tuesday, May
2.
On May 22, Ford will host its next Capital Markets Day in
Dearborn. On that day, executives will provide extensive updates on
the strategic potential and progress of Ford+ and the company’s
rapidly expanding capabilities in software and services, along with
deep dives into plans and key performance indicators for each of
the business segments.
About Ford Motor Company
Ford Motor Company (NYSE: F) is a global company based in
Dearborn, Michigan, committed to helping build a better world,
where every person is free to move and pursue their dreams. The
company’s Ford+ plan for growth and value creation combines
existing strengths, new capabilities and always-on relationships
with customers to enrich experiences for customers and deepen their
loyalty. Ford develops and delivers innovative, must-have Ford
trucks, sport utility vehicles, commercial vans and cars and
Lincoln luxury vehicles, along with connected services. The company
does that through three customer-centered business segments: Ford
Blue, engineering iconic gas-powered and hybrid vehicles; Ford
Model e, inventing breakthrough EVs along with embedded software
that defines exceptional digital experiences for all customers; and
Ford Pro, helping commercial customers transform and expand their
businesses with vehicles and services tailored to their needs.
Additionally, Ford is pursuing mobility solutions through Ford
Next, and provides financial services through Ford Motor Credit
Company. Ford employs about 173,000 people worldwide. More
information about the company and its products and services is
available at corporate.ford.com.
Adjusted EBIT is a non-GAAP financial measure. Ford does not
provide guidance on a net income basis, the comparable GAAP
measure. Ford’s net income in 2023 will include potentially
significant special items that have not yet occurred and are
difficult to predict with reasonable certainty, including gains and
losses on pension and OPEB remeasurements.
Adjusted free cash flow is a non-GAAP financial measure. Ford
does not provide guidance for net cash provided by/(used in)
operating activities, the comparable GAAP measure. Ford’s net cash
provided by/(used in) operating activities in 2023 will include
potentially significant special items that have not yet occurred
and are difficult to predict with reasonable certainty, including
cash flows related to the Company's exposures to foreign currency
exchange rates and certain commodity prices (separate from any
related hedges), Ford Credit's operating cash flows, and cash flows
related to special items, including separation payments, each of
which individually or in the aggregate could have a significant
impact to our net cash provided by/(used in) our operating
activities.
Contribution margin is calculated by subtracting material,
warranty, freight and duty expenses from revenue.
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 assumptions by
our management and involve a number of risks, uncertainties, and
other factors that could cause actual results to differ materially
from those stated, including, without limitation:
- Ford and Ford Credit’s financial condition and results of
operations have been and may continue to be adversely affected by
public health issues, including epidemics or pandemics such as
COVID-19;
- Ford is highly dependent on its suppliers to deliver components
in accordance with Ford’s production schedule and specifications,
and a shortage of or inability to acquire key components, such as
semiconductors, or raw materials, such as lithium, cobalt, nickel,
graphite, and manganese, can disrupt Ford’s production of
vehicles;
- To facilitate access to the raw materials necessary for the
production of electric vehicles, Ford has entered into, and expects
to continue to enter into, multi-year commitments to raw material
suppliers that subject Ford to risks associated with lower future
demand for such materials as well as costs that fluctuate and are
difficult to accurately forecast;
- Ford’s long-term competitiveness depends on the successful
execution of Ford+;
- Ford’s vehicles could be affected by defects that result in
delays in new model launches, recall campaigns, or increased
warranty costs;
- Ford may not realize the anticipated benefits of existing or
pending strategic alliances, joint ventures, acquisitions,
divestitures, restructurings, or new business strategies;
- Operational systems, security systems, vehicles, and services
could be affected by cyber incidents, ransomware attacks, and other
disruptions and impact Ford and Ford Credit as well as their
suppliers and dealers;
- Ford’s production, as well as Ford’s suppliers’ production,
and/or the ability to deliver products to consumers could be
disrupted by labor issues, natural or man-made disasters, adverse
effects of climate change, financial distress, production
difficulties, capacity limitations, or other factors;
- Ford’s ability to maintain a competitive cost structure could
be affected by labor or other constraints;
- Ford’s ability to attract and retain talented, diverse, and
highly skilled employees is critical to its success and
competitiveness;
- Ford’s new and existing products and digital, software, and
physical services are subject to market acceptance and face
significant competition from existing and new entrants in the
automotive and digital and software services industries and its
reputation may be harmed if it is unable to achieve the initiatives
it has announced;
- Ford’s results are dependent on sales of larger, more
profitable vehicles, particularly in the United States;
- With a global footprint, Ford’s results could be adversely
affected by economic or geopolitical developments, including
protectionist trade policies such as tariffs, or other events;
- Industry sales volume can be volatile and could decline if
there is a financial crisis, recession, or significant geopolitical
event;
- Ford may face increased price competition or a reduction in
demand for its products resulting from industry excess capacity,
currency fluctuations, competitive actions, or other factors;
- Inflationary pressure and fluctuations in commodity and energy
prices, foreign currency exchange rates, interest rates, and market
value of Ford or Ford Credit’s investments, including marketable
securities, can have a significant effect on results;
- Ford and Ford Credit’s access to debt, securitization, or
derivative markets around the world at competitive rates or in
sufficient amounts could be affected by credit rating downgrades,
market volatility, market disruption, regulatory requirements, or
other factors;
- The impact of government incentives on Ford’s business could be
significant, and Ford’s receipt of government incentives could be
subject to reduction, termination, or clawback;
- Ford Credit could experience higher-than-expected credit
losses, lower-than-anticipated residual values, or
higher-than-expected return volumes for leased vehicles;
- Economic and demographic experience for pension and OPEB plans
(e.g., discount rates or investment returns) could be worse than
Ford has assumed;
- Pension and other postretirement liabilities could adversely
affect Ford’s liquidity and financial condition;
- Ford and Ford Credit could experience unusual or significant
litigation, governmental investigations, or adverse publicity
arising out of alleged defects in products, services, perceived
environmental impacts, or otherwise;
- Ford may need to substantially modify its product plans and
facilities to comply with safety, emissions, fuel economy,
autonomous driving technology, environmental, and other
regulations;
- Ford and Ford Credit could be affected by the continued
development of more stringent privacy, data use, and data
protection laws and regulations as well as consumers’ heightened
expectations to safeguard their personal information; and
- Ford Credit could be subject to new or increased credit
regulations, consumer protection regulations, or other
regulations.
We cannot be certain that any expectation, forecast, or
assumption made in preparing forward-looking statements will prove
accurate, or that any projection will be realized. It is to be
expected that there may be differences between projected and actual
results. Our forward-looking statements speak only as of the date
of their initial issuance, and we do not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events, or otherwise. For
additional discussion, see “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2022, as
updated by our subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230323005428/en/
Media T.R. Reid 1.313.319.6683
treid22@ford.com
Equity Investment Community Lynn Antipas Tyson 1.914.485.1150
ltyson4@ford.com
Fixed-Income Investment
Community Jessica Vila-Goulding
1.313.248.3896 jvila5@ford.com
Shareholder Inquiries 1.800.555.5259 or 1.313.845.8540
stockinf@ford.com
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