Dearborn, Mich. - Ford Motor Co. announced that 2013 is expected to be one of the best years in its history, and projects 2014 to be another solid year for the company with 23 global product launches and continued investments around the world as the next step in its One Ford plan for profitable growth.
"We are celebrating what we expect to be an outstanding 2013, one that is likely to be among the best in our history," said Bob Shanks, Ford executive vice president and chief financial officer. "Once the year is finished, we expect it will show that we grew the business, delivered strong financial results, progressed the restructuring of our operations in Europe and Australia, strengthened our balance sheet and provided attractive returns to our investors."
2013 full-year automotive revenue is projected to grow about 10 percent, with market share increases in all regions other than Europe, where Ford expects higher retail share of the retail passenger car industry, as well as improved share of the commercial vehicle market. In Asia Pacific Africa and China, the company expects record market shares.
Ford is making good progress in implementing its Europe transformation plan, and also announced earlier in the year a plan to restructure operations in Australia.
The company continued to strengthen its automotive balance sheet. It estimates that it nearly cut in half the underfunded status of its global pension plans compared with the end of 2012. Ford also shared a comprehensive capital strategy with investors, one that is targeted to deliver high levels of shareholder value. Early in the year, Ford doubled its dividend and also implemented an anti-dilutive share repurchase program to offset compensation-related issuances. Based on performance and an improving balance sheet, the company now is rated investment grade by four of the major rating agencies.
Ford now projects that total company full-year pre-tax profit, excluding special items, to be about $8.5 billion, better than 2012 and in line with its most recent outlook. The company also is reconfirming its outlook that automotive operating margin will be higher than a year ago, and that automotive operating-related cash flow will be substantially higher than 2012, potentially a record.
Ford expects North America full-year 2013 pre-tax profit to be the highest in more than a decade, with an operating margin of 9.5 percent to 10 percent; this compares to prior guidance of about 10 percent. The difference reflects mainly higher warranty expense of $250 million to $300 million associated primarily with the Escape 1.6 liter recall announced last month.
In South America, the company now expects results to be about break-even, as recent government actions in Venezuela have affected adversely the business and overall results in the region. This compares to prior guidance of about break-even to profitable results for 2013.
The 2013 outlook for all other automotive business units, automotive net interest expense and Ford Credit is unchanged from prior guidance.
Finally, the company expects its full year operating effective tax rate to be about 27 percent. This compares to prior guidance of less than 30 percent.
2014 is expected to be another solid year for Ford and a critical building block in the One Ford Plan as Ford moves forward in building stronger global brands, a growing business based on outstanding products and a better balanced business in terms of source of sales and profitability. This is supported by a strengthening balance sheet that will continue to enable the company to reward shareholders with attractive returns.
In 2014, Ford will embark on its most aggressive product launch schedule in its history. The company will launch 23 all-new or significantly refreshed vehicles around the world — more than double the 11 global vehicle launches in 2013.
“This is our most ambitious launch plan ever, as we continue to implement our One Ford plan,” said Shanks. “In 2014, we are investing across the world to support next year’s launches, but also to drive profitable growth beyond 2014 as we serve more customers in more markets and in more segments.”
Overall, 2014 represents the next step in delivering profitable growth for all, with total company pre-tax profit, excluding special items, projected at $7 billion to $8 billion.
Beyond 2014, Ford generally remains on track to achieve its mid-decade outlook, but its targeted global automotive operating margin of 8 percent to 9 percent is at risk. This is due to the severe European downturn and conditions in South America, especially in Venezuela, that were not anticipated at the time the guidance was provided in mid-2011. The company expects its results over the mid-decade period to be strong and improving.
