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Playing to Win
Ford EuropeMarch 22, 2019
2
Today’s Participants
Lynn Tyson: Executive Director, Investor Relations
Stuart Rowley: Chief Operating Officer, Ford North America
Hans Schep: General Manager, Commercial Vehicles, Ford Europe
Sarah-Jayne Williams: Director, Smart Mobility, Europe
Will Periam: Chief Financial Officer, Ford Europe
3
Cautionary Note On Forward-Looking StatementsStatements 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 th at could cause actual results to differ materially from those stated, including, without l imitation:
• Ford’s long-term competitiveness depends on the successful execution of fitness actions;
• Industry sales volume, particularly in the United States, Europe, or China, can be volatile and could decline if there is a financial crisis, recession, or significant geopolitical event;
• Ford’s new and existing products and mobility services are subject to market acceptance;
• Ford’s results are dependent on sales of larger, more profitable vehicles, particularly in the United States;
• Ford may face increased price competition resulting from industry excess capacity, currency fluctuations, or other factors;
• Fluctuations in commodity prices, foreign currency exchange rates, and interest rates can have a significant effect on results;
• With a global footprint, Ford’s results could be adversely affected by economic, geopolitical, protectionist trade policies, or other events, including Brexit;
• Ford’s production, as well as Ford’s suppliers’ production, could be disrupted by labor disputes, natural or man-made disasters, financial distress, production difficulties, or other factors;
• Ford’s ability to maintain a competitive cost structure could be affected by labor or other constraints;
• Pension and other postretirement l iabilities could adversely affect Ford’s l iquidity and financial condition;
• Economic and demographic experience for pension and other postretirement benefit plans (e.g., discount rates or investment returns) could be worse than Ford has assumed;
• Ford’s vehicles could be affected by defects that result in delays in new model launches, recall campaigns, or increased warranty costs;
• Ford may need to substantially modify its product plans to comply with safety, emissions, fuel economy, and other regulationsthat may change in the future;
• Ford could experience unusual or significant l itigation, governmental investigations, or adverse publicity arising out of alleged defects in products, perceived environmental impacts, or otherwise;
• Ford’s receipt of government incentives could be subject to reduction, termination, or clawback;
• Operational systems, security systems, and vehicles could be affected by cyber incidents;
• 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;
• Ford Credit could experience higher-than-expected credit losses, lower-than-anticipated residual values, or higher-than-expected return volumes for leased vehicles;
• Ford Credit could face increased competition from banks, financial institutions, or other third parties seeking to increase their share of financing Ford vehicles; and
• Ford Credit could be subject to new or increased credit regulations, consumer or data 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 wil l 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, 2018, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
4
Today’s Participants
Lynn Tyson: Executive Director, Investor Relations
Stuart Rowley: Chief Operating Officer, Ford North America
Hans Schep: General Manager, Commercial Vehicles, Ford Europe
Sarah-Jayne Williams: Director, Smart Mobility, Europe
Will Periam: Chief Financial Officer, Ford Europe
5
Improving Ford’s Competitive Position And Profitability In Europe
• Ford of Europe has embarked
on a program to fundamentally
redesign our business and
reset near term performance
• Program was officially
launched on January 10, 2019.
Negotiations with Social
Partners are progressing well
• Future Operating Model will
focus on three distinct
business groups – Commercial
Vehicles, Passenger Vehicles
and Imports
6
• Future Operating Model will
focus on high-performing
business supported by
strong competitive position
and profit / return pillars –
Commercial Vehicles,
Utilities and select Imports
• Presently represents less
than 50% of Europe’s total
volume and revenue
• Low-performing business
principally Passenger cars
and Multi Activity Vehicles
New Operating Model Will Focus Capital On High-Margin, High-Growth Businesses
LowPerforming
High Performing>200% of
Europe’s EBIT
10% 20%
20%
60%
40%
(20)%
80%
(10)%(20)%
H I G H L Y D I L U T I V E
ROIC (%)
EBIT
Margin
+
- +
Circle size = 2017 +/- EBIT (Bils)
H I G H L Y A C C R E T I V E
-
Expense ForFuture Growth
Profitable
Note: References to EBIT and EBIT Margin include regional Ford Credit EBT
7
Today’s Participants
Lynn Tyson: Executive Director, Investor Relations
Stuart Rowley: Chief Operating Officer, Ford North America
Hans Schep: General Manager, Commercial Vehicles, Ford Europe
Sarah-Jayne Williams: Director, Smart Mobility, Europe
Will Periam: Chief Financial Officer, Ford Europe
8
• Commercial Vehicle
customers are represented by
seven core roles, centered
around moving goods, moving
people and performing tasks
• Growing use case
differentiation leads to
increased requirement for
product tailoring
Diversity Of Commercial Vehicle Customer Types
• Parcel Delivery
• Furniture M over
• Daily Rental
• Finished Goods
• Carpet Fitting
• Rubbish
Clearance
• Equipment
Carrying
• Bulk
M aterials
• Catering
• Retail
Agents
• M inibus
• Taxi
• Crew Bus
• Shuttle
• Family Use
• Luxury Bus
• DCiV
• Film Crew Van
• Double CC
• Handyman Van
• Building Trades
• Equipment Repairs
• Drain Clearance
• Windscreen Repair
• Road M aintenance
• Police Van
• M obile Kitchen
• Surveillance Van
• Car Transporter
• Ambulance
• Campers
• Fire Rescue
• Tippers
• Ice Cream Van
• Snow Gritter
• Cherry Picker
9
2012 2013 2014 2015 2016 2017 2018
• Commercial Vehicle industry
has grown by 47% in the last
6 years
• Largest growth has been in
the Medium Commercial
Vehicle 1T and 2T, and Pickup
segments
• Ford segment share has
grown in each of these
segments
• Ford is leading in 1T Van and
Pickup segments
Strong CV Industry Growth
Transit /Tourneo Courier
Transit /Tourneo Connect
Fiesta Van
Transit /Tourneo Custom
Transit
Ranger
12%
20%
14%
29%
1.9M 1.9M2.0M
2.2M
2.5M2.7M
2.8M
FordSegment
SharePickups
Medium Commercial Vehicle – 2T
Medium Commercial Vehicle – 1T
Integrated Style Van
Heavy Commercial Vehicle
EU20 Industry Volume
10
• Our product and distribution
led strategy improved our
market position from seventh
in 2012 to market leadership
in 2015
• 2018 represented our sixth
consecutive year of market
share growth and our fourth
as the number one brand
• We plan to extend our
leadership position through a
continued focus on
Commercial Vehicles and
implementation of a
comprehensive CV strategy
Ford Strengthening Leadership Position
NEW PRODUCT DRIVES SHARE IMPROVEMENTCOMMERCIAL VEHICLE
STRATEGY IMPLEMENTATION
#7
#6
#3
#1#1#1
#1
EU20 Market Share (Pct.)
8.5%
10.0%
11.4%
12.6%13.2%
13.5%14.1%
2012 2014 20162013 20182015 2017
Share
Rank:
11
Ford Otosan• Manufacturing / engineering
Conversion Partnerships
VW Alliance
1 Tonne
Commercial Vehicle Strategy Continuing Profitable Growth
Ford Transit Centre Network Fleet services• Financing / leasing / insurance• Acquisition / re-marketing• Admin and compliance• Rental
Transit 24
• 100% uptime• E-check• Extended opening hours• Priority service• Roadside assistance
Connected services• Ford telematics• Ford data services• FordPass• Mobility services
2 Tonne
Pickup
B-Integrated Style Van
C-Integrated Style Van
Car Derived Van
950 Transit Centres
in Europe
PRODUCTS DISTRIBUTION PARTNERSHIPS / ALLIANCES SERVICES
12
Today’s Participants
Lynn Tyson: Executive Director, Investor Relations
Stuart Rowley: Chief Operating Officer, Ford North America
Hans Schep: General Manager, Commercial Vehicles, Ford Europe
Sarah-Jayne Williams: Director, Smart Mobility, Europe
Will Periam: Chief Financial Officer, Ford Europe
SECRET 13
Our Mobility Solutions
Smart Vehicles For A Smart World
……
Integrated Serv ices
Smart Vehicles Smart WorldMobi l i ty Orchestrat ion
PAR K I N G S O L U T IO N S
F O R D PAS S
F O R D C O M M ER C IAL
S O L U T I O N S
THE TRANSPORTATION MOBILITY CLOUD™
C I T Y D AT A
S O L U T I O N S
A u t o n o m o u s T e c h n o l o g y
L AS T M I L E
D E L I VE R YU R B AN
E L E C T R I C
VAN
14
• Urbanisation is creating
significant challenges for
European cities
• Air quality is the number one
issue followed by congestion
• City Mayors are introducing
new legislation and policies
that impact our Commercial
Vehicle customers who
operate in urban areas
EU City Transport Strategies Tackle Air Quality Challenge
Media Headlines Capture Citizen Sentiment Examples of City Transport Plans
15
• Urban Electric Van pilot
demonstrates an innovative
solution that connects city
needs with our commercial
customers’ needs
• Project also highlights the
opportunity to create
integrated mobility solutions
by combining product and
service
Commercial Mobility Solutions: The Urban Electrified Van (UEV)
Pilots in Four Cities
WHAT:Providing our commercial customers with an UEV that gives range
assurance and not range anxiety
HOW:Transit Custom PHEV with UEV Services Ecosystem including
geofencing innovations. Working with Transport for London and
supported by U.K. government-funded Advanced Propulsion Centre
WHY:Enable compliant, clean and efficient commercial vehicles that can
operate in low emissions zones in urban environments
16
• Increased online orders
impacts air quality and
congestion challenges
• Cities, delivery companies and
consumers benefit from a
faster, cleaner more efficient
solution for the last mile
• Ford Mobility is piloting a last
mile delivery solution in
London using multi-modal
software to optimise deliveries
Commercial Mobility Solutions: Last Mile Delivery
Last Mile Delivery Pilot
Large U.K. Internet
Retailer
WHAT:Providing our commercial customers with an urban last mile solution
with the seamless connection of traditional van fleets with more
appropriate, specialist last mile vehicles
HOW: Multi-modal software platform and last mile courier
WHY: Enable faster, cleaner and more efficient deliveries in urban areas
17
• Ford Mobility has launched
connected services for our
Commercial Vehicle drivers
designed to simplify their
driving experience
• In 2Q, Ford Mobility will
launch the Ford Telematics
tool and vehicle data services
targeted to simplify fleet
ownership and management
Commercial Mobility Solutions: Connected Services For Fleet Managers And Drivers
Connected Services: Fleet Manager
Connected Services: Commercial Vehicle Driver
WHAT:Connected experiences for owners, drivers and fleet managers both
in and outside of the vehicles
HOW: Built in, brought in and beamed in connected services
WHY:To help our customers drive business productivity to make their
businesses’ thrive
18
• Combining vehicle data from
160 Light Commercial
Vehicles with city data with
insight and smart algorithms
• Potential to support cities with
transportation planning and
fleet managers to improve
safety
City Data Solutions
15,000+ days of vehicle
operation
500 million+ data records
1 million+ kilometers driven
10+ years of data collection
6+ years of engine-on time
WHAT:Analysis of smart vehicle data to assess road safety, fleet operations
re-timing, EV charging infrastructure and road traffic metrics
HOW:Connected 160 Light Commercial Vehicles running across London,
collected data, combined with city data sets, developed algorithms to
create insights and predictive models
WHY:To support transportation planning and provide fleet insights about
driving patterns