In its 2024 second-quarter earnings name, Iveco Group showcased constant enhancements in profitability throughout all enterprise items, with an adjusted EBIT margin for industrial actions reaching 6.9%. Regardless of dealing with a short lived setback in web working capital and a slight lower in monetary efficiency in comparison with the earlier yr, the corporate stays optimistic about its strategic plan and targets for 2028.
Iveco Group reported a powerful order backlog for vehicles and buses, anticipating elevated deliveries in direction of the top of 2024 and into 2025. The corporate’s collaborations with Foton and Longen Energy, in addition to its help for Metallica’s World Tour, have been additionally highlighted. Key segments skilled constructive progress, and the corporate maintained a powerful market share, notably in Europe’s light-duty truck and intercity bus segments.
Key Takeaways
- Adjusted EBIT margin for industrial actions was 6.9%.
- Short-term one-off in web working capital anticipated to recuperate in H2.
- Robust order backlog for vehicles and buses.
- Mild-duty truck section noticed double-digit progress; medium and heavy-duty vehicles grew by 8%.
- Seller inventories decreased by 10% for light-duty vehicles, elevated barely for medium and heavy-duty vehicles.
- Over 90% of light-duty and over 70% of medium and heavy-duty truck orders for Mannequin 12 months 2024 are booked.
- Firm on monitor to ship round 2,000 eBuses by finish of 2025.
- Internet revenues decreased by 5%, with a steady adjusted EBIT margin of seven.5%.
- Full-year monetary costs anticipated to be round EUR 300 million.
- Full-year free money move goal stays unchanged at EUR 350 million to EUR 400 million.
Firm Outlook
- Mild-duty vehicles and buses outlook is flat to barely up.
- Heavy-duty vehicles anticipated to be down round 10%.
- Medium and long-term targets and technique stay unchanged.
Bearish Highlights
- Manufacturing charges adjusted to match market demand, leading to decreased output.
- Free money move for industrial actions was damaging at EUR 98 million.
Bullish Highlights
- Robust profitability in truck section at 7.4%.
- Improved manufacturing prices in Europe.
- Strong order guide covers manufacturing as much as the primary half of 2025.
Misses
- Lower in web revenues by 5%.
- Adjusted EBIT margin for Monetary Companies barely decreased.
Q&A Highlights
- Confidence in gross sales pickup in This fall 2024.
- Protection sector contributes positively to profitability and order backlog.
- Mannequin 12 months 2024 anticipated to drive order consumption in H2.
- Foton partnership confirmed in EV van section, with no present plans to increase it.
All through the earnings name, Iveco Group (ticker not offered), communicated its confidence in overcoming the present challenges and attaining its monetary targets. The corporate underscored its robust market presence, strategic partnerships, and sturdy order backlog as key drivers for future progress. Regardless of non permanent disruptions and market fluctuations, Iveco Group’s outlook stays steadfast, with a concentrate on effectivity and product innovation.
Full transcript – Iveco Group (IVG) Q2 2024:
Operator: Good day, women and gents, and welcome to right now’s Iveco Group 2024 Second Quarter and First Half 12 months Outcomes Convention Name and Webcast. We want to remind you that right now’s name is being recorded. [Operator Instructions] Right now, I’ll now flip the decision over to Federico Donati, Head of Investor Relations. Please go forward, sir.
Federico Donati: Thanks, Alan. Good morning, everybody. We want to welcome you to the webcast and convention name for Iveco Group’s second quarter monetary outcomes for the interval ending June 30, 2024. This name is being broadcast dwell on our web site and is copyrighted by Iveco Group. Every other use, recording or transmission of any portion of this broadcast with out the categorical written consent of Iveco Group is strictly forbidden. Internet hosting right now’s name are Iveco Group, new CEO, Olof Persson; and our CFO, Anna Tanganelli. Olof and Anna will use the fabric made obtainable for obtain on the Iveco Group web site earlier this morning. Moreover, please be aware that any forward-looking assertion we is perhaps making throughout right now’s name are topic to the dangers and uncertainties talked about within the protected harbor assertion included within the presentation materials. Further data pertaining to elements that would trigger precise outcomes to vary materially is contained within the firm’s most up-to-date annual report in addition to different current stories and filings with the authorities within the Netherlands and Italy. The corporate presentation could embody sure non-IFRS monetary measures. Further data, together with reconciliation to probably the most straight comparable IFRS monetary measures is included within the presentation materials. Reiterating right here once more, the 2024 monetary information proven within the press launch and on this presentation exclude Magirus and consult with the persevering with operation solely, except in any other case acknowledged. In accordance with relevant accounting requirements, the figures within the earnings assertion and assertion of money move for 2023 comparative intervals have been recast constantly. I’ll now flip the decision over to our CEO, Olof.
Olof Persson: Thanks very a lot, Federico. And in addition from my facet, a heat welcome to all of you becoming a member of our name right now. To begin, I am, after all, very excited to start my new function because the CEO of the Iveco Group, and I am actually trying ahead to persevering with to construct and increase on the stable basis laid down within the final 2.5 years of the corporate. As you already know, I’ve been a member of the corporate’s Board of Administrators for the reason that starting and I’ve been concerned in our strategic course since then. And I’ve witnessed the primary hand, the pleasure and fervour our Iveco Group groups haven’t just for our companies and types, however maybe most significantly for our prospects. I’ll, along with the group work laborious to proceed aligning the Iveco Group with a quickly altering market, as we’ve got specified by our pathway technique. Transferring ahead, we’re going to proceed to speed up on our bold pathway technique. The strategic plan requires full focus and really constant execution to attain our 2028 targets. And this quarter exhibits that we’re on the appropriate trajectory. At present, we’re reporting our outcomes for the second quarter of 2024, which follows our Capital Markets Day hosted in March this yr within the first quarter with a really stable efficiency. As we introduced in our press launch issued earlier this morning, we’ve got continued the yr with constant profitability enhancements and resilience throughout all enterprise items, resulting in an adjusted EBIT margin for industrial actions at 6.9%, which is 10 foundation factors higher than the all-time excessive second quarter of 2023. Throughout this quarter, we didn’t expertise any uncommon or sudden enhance so as cancellations on web value erosion. As we earlier reported, we opened the order consumption for our new mannequin yr 2024 lineup in all truck segments within the first quarter to handle the transition from different Mannequin 12 months ’22, each in gross sales additionally in manufacturing. As Anna will element later in right now’s presentation, we’ve got skilled a damaging non permanent one-off in our web working capital linked to additional effort in finalizing and getting a sure variety of our Mannequin 12 months 2024 autos able to ship. The changeover from Mannequin 12 months ’22 to Mannequin 12 months ’24 has been a serious job for organizations, all our truck fashions and configurations and all our European truck manufacturing websites have been concerned. Regardless of the challenges, the group has executed a completely unbelievable job to safe high quality and efficiency of the Mannequin 12 months ’24 vehicles to get them prepared for the market. Our expectations is that Mannequin 12 months ’24 vehicles deliveries will achieve momentum within the latter a part of the yr and into 2025 and we anticipate to totally recuperate the one-off working capital impression through the second a part of the yr. The order backlog in vehicles by the top of the quarter was on a degree what we’d think about extra regular with round 13 weeks of manufacturing already bought for gentle industrial autos and round 9 to 10 weeks for medium and heavy. Greater than 90% of the order guide in gentle and industrial autos and greater than 70% of the heavy — medium and heavy pertains to our new Mannequin 12 months 2024. When taking a look at our Bus enterprise unit, the order backlog covers all of ’24 and is now stretching nicely into 2025 with the primary half of subsequent yr absolutely lined. In Protection, we already disclosed that our order backlog referring solely to orders already funded by prospects, covers principally your entire prime line for the marketing strategy interval, with a stable potential upside on the again finish of our plan. Latest signed contracts in each Bus and Protection additional reinforce the stable order backlog, offering a good stronger basis for his or her pathways. Lastly, in Powertrain, we’re nicely on monitor to achieve our goal of 100 foundation factors margin enchancment per yr, supported by our effectivity plan and an more and more increased contribution from aftermarket actions. When taking a look at our monetary service enterprise, delinquencies on guide for lower than 30 days remained at a historic low 2%, which is sequentially flat and 30 foundation factors higher than final yr. Lastly, as mentioned in our earlier incomes calls, we’ve got made important efforts along with companions to unravel body-building capability bottlenecks that slowed down the timing of deliveries to prospects and affected as nicely different OEMs. The scenario has considerably improved, and we anticipate it to normalize within the third quarter. Then trying on the Iveco Group monetary efficiency for the second quarter. Our consolidated revenues have been barely down versus final yr, and consolidated adjusted EBIT margin was at 7.5%, which is in line versus the identical quarter final yr. Our adjusted diluted EPS was at EUR 0.63 on the finish of the second quarter, which is EUR 0.02 greater than the second quarter of 2023. And through our Annual Basic Assembly held on the seventeenth of April this yr, the shareholders authorized our proposal to distribute a money dividend of EUR 0.22 per excellent widespread share, and this was paid on the twenty fourth of April. As you’ve got seen from our periodic report on the buyback actions, as of twelfth of July, we’ve got purchased again 859,000 widespread shares for a complete web consideration of EUR 9 million. Let’s now have a look at the highlights of the Iveco Group’s essential achievements through the second quarter, as you may see on Slide 4. On the 4th of June, we signed a Memorandum of Understanding with Foton, a number one industrial car producer in China to discover potential collaboration within the areas of electrical autos and parts in addition to joint enterprise alternative for Europe and South America. The nonbinding settlement is meant to increase a relied industrial car lineup to the gross weight car class under the three.5 tonnes. Provide alternatives, together with our powertrain model, FPT Industrial may even be mentioned. Additionally in June, we signed an essential time period mortgage facility for EUR 150 million with CDP and the mortgage will go in direction of our funding in analysis, improvement and innovation. Lastly, as we introduced earlier this yr, I additionally wished to say that the Iveco Group performed a serious function in supporting the heavy steel band, Metallica on the European leg of the World Tour. From Might to July, we offered multi-energy heavy-duty vehicles as help of the Metallica Convoy that moved the band and its gear between venues. This initiative has strengthened our advertising actions in Europe, reaching a whole bunch of present and new prospects and reinforcing Iveco’s model consciousness all through all channels, and in addition aligning positively with our group’s imaginative and prescient of going past. Transferring to Slide 5. And along with the group’s achievements, our particular person enterprise unit reached additionally essential accomplishment this second quarter. And if we have a look at Slide 5, let’s start with our Truck enterprise unit. In April, the Italian transport and logistic operators, Smet Group confirmed its order for 100 new car S-Manner Gas Hero Vehicles fueled with HVO to be delivered by the top of this yr. The order is the most recent within the long-term partnership between Iveco and Smet Group, which shares a forward-looking strategy and concentrate on innovation. In June, the Iveco S-Manner gained the celebrated Pink Dot Award for product design, one of many world’s largest design competitors. And this award acknowledged the product’s performance, aesthetics, ease of use, sustainability and accountability. Additionally IVECO Bus gained a Pink Dot Award for product design, due to the all new entrance finish and dashboard on the CROSSWAY Bus. Our Bus enterprise unit elevated its presence in Brazil final quarter when it delivered the primary 55 buses to Rápido Sumaré, a big city transport operator in São Paulo, 18 extra items will likely be delivered this yr to contribute to our buyer’s renewal of fleet in São Paulo. IVECO Bus and By way of, a market chief that mixes software program innovation companies signed 2 Memorandum of Understanding in Might. The primary with Politecnico di Milano and the opposite with Humanitas. Each will implement pilot tasks to supply custom-made and versatile demand response in transport options. On Slide 6, we see the principle achievements of our protection enterprise items final quarter. In June, the car Oto Melara consortium signed a contract to provide 28 state-of-the-art Centauro II autos to the Italian Military. Since we full our prospects’ necessities for 150 items and contains 10 years of logistics help. Commenting on Powertrain. We see on the slide that in April, FPT Industrial and LONGEN POWER, a gen set in industrial energy gear producer signed a complete settlement to increase into world energy gear markets. Over the following 3 years, FPT Industrial will provide high-efficiency engines for LONGEN POWER’s gen units and the businesses will work collectively to advertise the appliance and improvement of gen units and industrial energy gear for the worldwide market. Transferring then on to Slide 7, we present the entire trade unit registration change versus the second quarter of 2023, and the quarterly efficiency of the trade in Europe, excluding U.Ok. and Eire was stable throughout all segments. Mild-duty vehicles have been up double digits, whereas medium and heavy have been up 8%. For Buses, the trade in Europe was up 11% versus the earlier yr second quarter. In Latin America, trade volumes have been down by double digits in light-duty vehicles and down 7% in Buses, whereas a double-digit enhance in medium and heavy-duty Vehicles. As a reminder to all of you, our Latin America figures embody Argentina, which is down year-over-year, notably within the light-duty vehicles. On a worldwide foundation, as you may see, the market skilled double-digit quantity progress for light-duty vehicles and a extra — extra average 5% enhance in medium and heavy responsibility vehicles, whereas it was barely down in Buses. Transferring then on to Slide #8. And there, we’ve got our recurring quarterly replace on channel stock statistic displays solely completed merchandise. Firm inventories have been sequentially down, each in light-duty Truck and medium and heavy reflecting our effort to normalize the extent of order pipeline attributable to regular seasonality. seller stock. This was sequential down 10%, in light-duty vehicles and barely increased in medium and heavy because of the legislative necessities linked to our Mannequin 12 months ’22. As you may see from the takeaway message on the backside on the slide, the share of seller and firm inventories already bought to buyer cross section has remained stable, round 70% for each precise seller stock and firm stock. Lastly, taking a look at manufacturing exercise. Now we have continued to adapt our manufacturing charge to the market demand for each light-duty Vehicles and medium and heavy responsibility Vehicles, manufacturing was sequentially down by 17% in gentle and 10% in medium and heavy. Let’s now transfer on to subsequent slide, with order consumption and supply statistics on the finish of the second quarter. As disclosed beforehand, we’re approaching a normalized degree in our truck order guide protecting nearly 13 weeks of manufacturing in light-duty Vehicles and round 10 weeks for medium and heavy-duty vehicles on the finish of June. Our Mannequin 12 months 2024 has been very nicely acquired by prospects, and our order guide now represents greater than 90% of the entire light-duty vehicles orders and greater than 70% of the medium and heavy-duty truck orders. As I discussed earlier, deliveries of the brand new Mannequin 12 months will finish momentum within the second half of 2024, notably within the latter a part of the yr. Our Bus enterprise unit order guide covers the complete yr of 2024 and your entire first half of subsequent yr. Truck deliveries have been down within the second quarter by 18% on a worldwide foundation versus second quarter final yr. Europe was down 22% in Vehicles with light-duty vehicles down 18% in medium and heavy down 31% versus the second quarter of 2023. Bus deliveries have been up 42% on a worldwide foundation and up 2% in Europe. Order consumption for Vehicles was impacted within the quarter by our deliberate effort to normalize the order guide mixed with a centered pricing self-discipline through the phase-in interval of Mannequin 12 months ’24 and the phaseout of Mannequin 12 months ’22. Slide #10 is a brand new addition. It concentrate on electrical product deliveries as for the primary half of 2024. And let’s begin with our eDaily vary. As you may see, deliveries have ramped up visibly and our order backlog is stable. On our eAxles facet, product deliveries have elevated quarter-over-quarter, and we anticipate that to proceed going ahead. And we even have now an order guide with greater than 2,000 eAxles. These eAxles will likely be delivered within the upcoming quarters. As well as, the electrical bus deliveries have continued to extend year-over-year. And based mostly on our present order backlog already funded, we’ll ship round 2,000 eBuses from now to the top of 2025. So this implies, and as you may see, we’re absolutely on monitor on ramping up all our electrical merchandise throughout the segments, and we’re comfortably positioned to satisfy the upcoming European emission normal regulation. Then shifting to Slide 11 and speak somewhat bit about market shares and in Europe, excluding U.Ok. and Eire in our Truck and Bus segments. In light-duty, we ended the second quarter strongly at a 14.8% market share within the 3.5 to 7.49 tonne section. We additional solidified our market share management within the chassis cap section with a 32.5% market share, and we proceed to take care of our historic management within the higher finish of the light-duty section with a market share of 63.6%. In heavy-duty, we elevated our market share with 120 foundation factors versus the second quarter of 2023 at 8.9%, and in medium and heavy mixed, our market share was up 170 foundation factors to 10.2%, and we keep a really robust place within the CNG, LNG heavy-duty truck section with a market share of 43.6%. For Bus, we additional solidified our management in intercity closing the quarter at 63% market share in Europe, up from already excessive 45.7% in the identical interval final yr. You see the Bus, we closed the quarter with a stable 13.3% market share. And with that, I’ll now hand over to Anna, who will take you thru the second quarter monetary highlights. After, I’ll come again and conclude with some last remarks.
Anna Tanganelli: Thanks, Olof. Good morning, everybody. Let’s now check out the highlights of our second quarter 2024 monetary outcomes on Slide 13. Earlier than we begin, let me please remind you that in continuity with our Q1 outcomes, for the financials proven on the following slide consult with our persevering with operations solely as our Firefighting enterprise unit has been labeled as discontinued operations following the signing of a definitive settlement for its switch of possession in March of this yr. Because of this, in accordance with relevant accounting requirements, additionally 2023 figures have been recapped constantly. Our Q2 closed with consolidated web revenues of EUR 3.9 billion and web revenues of business actions of EUR 3.8 billion, contracting year-over-year by 5% and 5.8%, respectively, attributable to decrease volumes, primarily in Europe and damaging combine and the impression of an adversarial international alternate charge primarily in Argentina in comparison with Q2 2023, partially offset by a constructive value realization, notably in Vehicles. Monetary Companies web revenues totaled EUR 142 million within the quarter, up 21.4% in comparison with prior yr. Group consolidated adjusted EBIT barely decreased over the interval by EUR 16 million, closing at EUR 295 million, whereas adjusted EBIT margin remained steady at 7.5%. Adjusted EBIT of business actions reached EUR 264 million, with a really stable 6.9% margin, up 10 foundation factors versus Q2 2023. Monetary costs verify the constructive year-over-year trajectory additionally on this quarter, closing at EUR 49 million on account of the sequence of actions we’ve got carried out to comprise our international alternate publicity and to scale back our price of hedging in Argentina, mixed with a constructive hyperinflation accounting impression. In gentle of this very stable first half end result, whereas we stay cautious on the evolution of Argentinian economics additionally contemplating that market expectations hinged to a possible additional devaluation of the Argentinian peso within the later a part of this yr, we now anticipate full yr 2024 monetary costs to shut at round EUR 300 million. Clearly, this determine may doubtlessly additional enhance ought to set devaluation not materialize. Reported earnings tax bills for Q2 2024 have been EUR 63 million with an adjusted efficient tax charge of 26%, leading to a 27% ETR for the semester. Consolidated adjusted web earnings for the interval closed at EUR 182 million, up EUR 15 million in comparison with prior yr. Because of this, adjusted diluted EPS was EUR 0.63, up EUR 0.02 in comparison with Q2 2023. As standard, on this slide, we report the adjusted web earnings attributable to Iveco Group, which totaled EUR 172 million and excludes the revenue attributable to noncontrolling pursuits. Transferring to our free money move efficiency. Q2 2024 free money move of business actions was damaging for EUR 98 million, primarily pushed by a short lived distinctive working capital absorption, bringing the additional effort to safe high quality and readiness of the launch of our new Mannequin 12 months 2024 truck vary. Lastly, obtainable liquidity, together with undrawn dedicated credit score strains remained stable at EUR 4.2 billion as of finish of June 2024. Let’s now concentrate on web revenues of Industrial Actions on Slide 14. Q2 2024 web income break up by area, as you may see from the chart on the highest right-hand nook of this slide, all areas contract year-over-year, aside from remainder of the world, which was up 7% in comparison with prior yr, primarily pushed by Africa and Center East. As for the online revenues evolution by enterprise unit, Bus and Protection have been solidly up versus prior yr, whereas Truck and Powertrain decreased by 10% and 14%, respectively, versus Q2 2023. Specifically, Truck web revenues totaled EUR 2.6 billion, primarily due to repeatedly constructive value realization in each gentle industrial autos and in medium and heavy-duty Vehicles which partially offset the anticipated contraction in volumes in comparison with prior yr and the impression of the adversarial international alternate charge evolution made in Argentina. Bus web revenues elevated by plus 22.4% year-over-year to EUR 612 million, underpinned by increased volumes and a greater combine mixed with the constructive pricing evolution. Internet revenues of Protection continued to develop considerably within the interval at round plus 30%, reaching EUR 285 million, due to increased quantity and the constructive combine. Powertrain web revenues have been down 13.7% year-over-year to EUR 980 million, primarily on account of a lower in volumes within the interval. Gross sales to exterior prospects accounted for 48% in Q2 2024. Turning to Slide 15. Let’s now briefly touch upon the principle drivers underlying the year-over-year enchancment in our adjusted EBIT margin of business actions. As beforehand highlighted, web pricing continued to be constructive within the quarter, offsetting the damaging impression of decrease volumes in truck and powertrain and the impression of the adversarial international alternate charge evolution in Argentina in comparison with prior yr. Total manufacturing prices have been considerably in step with Q2 2023, however the stable operational and product price enchancment in Europe of round EUR 40 million, nearly absolutely offset by the damaging efficiency of the Argentinian uncooked materials stock within the interval linked to the counter inflationary pattern. Because of this, adjusted EBIT margin of Industrial Actions closed at a stable 6.9%, up 10 foundation factors versus Q2 2023. Let’s now check out every industrial enterprise unit adjusted EBIT margin efficiency within the quarter on Slide 16. To begin with, all our companies posted a sturdy profitability efficiency within the interval each versus prior yr in addition to in comparison with the final 12-month interval, confirming the expansion path outlined in our strategic marketing strategy. Powertrain, bus and protection closed with a stable adjusted EBIT margin uplift in comparison with prior yr. Whereas Truck profitability, regardless of the slight lower versus an all-time excessive Q2 2023, reached a exceptional 7.4%. Specifically, Truck adjusted EBIT margin was primarily impacted by decrease volumes, a damaging combine and the year-over-year adversarial international alternate charge impact partially offset, as we mentioned by repeatedly constructive value realization additionally on this quarter. Manufacturing prices continued to solidly enhance in Europe, however as we mentioned beforehand, this pattern was greater than offset by the Argentinian uncooked materials stock tendencies. As for protection, adjusted EBIT margin posted a 70 foundation level enhance versus prior yr, reaching an nearly double-digit end result at 9.8%, due to increased volumes and a greater combine. Bus adjusted EBIT margin closed at 5.2%, up 200 foundation factors, exhibiting as soon as once more a exceptional year-over-year efficiency, due to increased volumes, a positive combine and constructive pricing. Lastly, Powertrain adjusted EBIT margin was up 80 foundation factors, reaching 6.6%, underpinned by a sturdy discount in product prices, which absolutely offset the damaging impression of decrease volumes. Let’s now check out the efficiency of our Monetary Companies enterprise unit through the quarter on Slide 17. Q2 2024 adjusted EBIT closed at EUR 31 million, barely reducing by EUR 4 million versus prior yr, primarily to help the continuing improvement of GATE. The managed portfolio, together with unconsolidated joint ventures, was up EUR 800 million, reaching EUR 7.9 billion as of June 30, 2024, of which retail accounted for 40% and wholesale for 60%, in step with March and 2024. As soon as once more, price what to be highlighted right here is that the inventory of receivables late by greater than 30 days as a share of the general on guide portfolio remained at a historic low of two% versus 2.3% of June 30, 2023. Lastly, return on property, as proven within the chart on the highest right-hand nook of this slide stays stable and steady at 2%. Transferring to our Q2 2024 free money move and web industrial money evolution on Slide 18. As mentioned, within the second quarter of this yr, free money move of business actions was damaging for EUR 98 million, pushed by a short lived distinctive absorption of our web working capital linked to some additional efforts in finalizing and getting a sure variety of our Mannequin 12 months 2024 autos able to ship. Our expectation is for Mannequin 12 months 2024 deliveries to achieve momentum later within the yr. Subsequently, our full yr 2024 industrial actions free money move goal remained unchanged at between EUR 350 million and EUR 400 million. Adjusted EBITDA and money out for curiosity and taxes have been in step with prior yr, whereas change in provisions and comparable contributed positively the EUR 412 million in comparison with Q2 2023, due to the numerous discount of our monetary costs. Funding within the quarter have been EUR 210 million, EUR 31 million increased versus Q2 2023, with whole investments for full yr 2024 confirmed at round EUR 1 billion. Lastly, the EUR 67 million year-over-year enchancment within the different adjustments line merchandise is especially linked to final yr’s damaging one-off ensuing from the complete acquisition of the Nikola (NASDAQ:) Iveco three way partnership finalized in June 2023. As a reminder, on twenty fourth of April 2024, Iveco Group paid out the authorized money dividend of 2020 — EUR 0.22 per widespread share. As well as, within the interval, we proceed to buy U.S. linked bonds in Argentina, specifically the BOPREAL as a part of the beforehand talked about actions and hedging technique carried out within the nation. Transferring now to my final slide for right now, Web page 19. Our obtainable liquidity as of thirtieth of June 2024 stood at EUR 4.2 billion. This contains EUR 2.3 billion in money and money equivalents and EUR 1.9 billion of undrawn dedicated amenities. our debt maturity profile, please be aware that within the interval, we absolutely pay as you go the EUR 400 million syndicated time period mortgage facility maturing in October 2025 and bearing a progressive coupon step-up, changing it with extra price aggressive and diversified funding sources thereby extending our common debt maturity profile from 2 to three.5 years, which confirms traders’ belief in Iveco Group’s creditworthiness. Final however not least, it’s instantly seen from the chart with our money and money equal ranges proceed to greater than cowl all of the money maturities foreseen within the coming years and totaling EUR 1.5 billion. Thanks. I’ll now flip the decision again to Olof for his last remarks.
Olof Persson: Thanks very a lot, Anna. Let’s conclude this presentation with the trade and monetary outlook in addition to want to share my essential observations after the 30 days I have been within the job. Our preliminary trade quantity outlook for 2024 displays our present feasibility and is broadly in step with what has already disclosed by a few of our friends who launched the financials earlier than us in addition to what’s already disclosed in earlier incomes calls. On a worldwide foundation, each light-duty vehicles and buses are confirmed flat or barely up year-over-year, whereas heavy-duty vehicles are anticipated to be down round 10% with bigger variances of subs declined by market. Europe, excluding U.Ok. and Eire is predicted to vary from flat to barely up in each light-duty Vehicles and Buses, and heavy-duty Vehicles are anticipated to be down at round 15%. A slight enchancment within the trade outlook for the complete yr displays the stable first half efficiency whereas maintaining the second half expectations unchanged. Within the subsequent slide, #22, as our full yr 2024 primarily monetary steerage, unchanged from earlier name. And as acknowledged on the prime of the chart, this monetary steerage exclude Magirus, our hearth combating enterprise unit and has been confirmed in its entirety what was disclosed through the Capital Markets Day. The corporate is confirming its steerage as follows: at a consolidated degree, group adjusted EBIT at between EUR 920 million and EUR 970 million. And for the commercial actions, web income, together with foreign money results to be down at round 4%. Adjusted EBIT from industrial actions at between EUR 790 million and EUR 840 million, industrial free money move at between EUR 350 million and EUR 400 million and investments in property, vegetation and gear and capitalized intangible property at round EUR 1 billion. Steering has been confirmed on the again of a convincing first half of the yr and an evolving order backlog. As already disclosed in our earlier incomes calls embedded in our steerage for the complete yr is profitability enchancment for Powertrain, Bus and Protection enterprise items, whereas our Truck enterprise unit will leverage a Mannequin 2024 and on the sustained efficiency of the sunshine industrial autos to mitigate the damaging impression of the European market slowdown in heavy-duty vehicles. We are going to take selections on how one can navigate our manufacturing capability through the second half of the yr, in step with the decrease market, particularly within the third quarter to sensibly handle price and money in what’s a seasonally weak quarter. And to recuperate the unit and in addition to recuperate the unfinished merchandise that remained in our stock on the finish of the second quarter. Our Mannequin 12 months 2024 throughout Truck section is receiving superb preliminary suggestions from our prospects with deliveries to achieve momentum within the latter a part of 2024, sturdy order books for each Bus and Protection enterprise items are persevering with reinforcing the expectations. The group’s goal to maintain a sound degree of accessible liquidity is continuous and intact. In conclusion, on Slide 23, let me simply share with you some observations from my first 30 days. To begin with, I discovered a really robust dedication and alignment at a senior chief group but in addition throughout all of the enterprise items to achieve our medium- and long-term targets introduced within the Capital Markets Day. It actually has been pushed down and it is accepted and labored on. Our product technique is stable and really nicely outlined, completely in step with our long-term funding technique and in addition in step with our expertise highway map with the intention to ensure that we proceed to place very aggressive and high-technology content material car out to our prospects. Thirdly, the operational excellence program is nicely underway with implementation plans which might be outlined and a few which might be below definition with the intention to attain the targets once more that we’ve got set out for 2028 with a year-by-year enhancements. Fourth, all within the group and all of the completely different elements of organizations are working laborious in optimizing our working capital administration with the intention to enhance the free money move from our industrial actions. In conclusion, and as already anticipated in my remarks, my appointment as the brand new CEO of Iveco Group just isn’t and won’t set off any change in our medium- and long-term targets and pathway technique, that are all confirmed of their entirety. So that will conclude the ready remarks, and we will now open up for questions. And to be conscious of the time, we kindly ask you to carry off any detailed modeling and accounting questions on which you’ll be able to comply with up straight with Federico and Investor Relations group after the decision. Operator, please go forward.
Operator: We are going to take our first query from Martino De Ambroggi, Equita.
Martino De Ambroggi: Welcome, Olof. My first query is on costs, since you talked about within the press launch, you’ve got a prudent strategy for the second half of the yr. So simply to know what is the visibility on the costs for the second half and your assumption embedded within the steerage? The second is a extra normal query. So only for Olof, I clearly perceive that you simply verify all of the medium and long-term targets. Two strategic questions on, one, the Protection, if it is a core asset for you in your view within the medium and long run? And second, would you think about any mixture M&A offers for — in the long run for Iveco which suffers as everyone is aware of of a smaller measurement in comparison with a number of massive opponents.
Olof Persson: So thanks. On the value visibility steerage — and thanks for the welcome. On the value visibility, what we’ve got included in our steerage is I imply, we’ve got an order inventory that you simply see goes into the third quarter, and we’re shifting into the fourth quarter with restricted visibility for 2 causes. One is, after all, the market improvement, we do not see clearly. But in addition, it’s important to keep in mind that we’ve got an enormous rollout now with the Mannequin 12 months 2024 with loads of advertising actions that need to exit. We’re completely assured that the pickup, as I’ve mentioned a variety of occasions, will come through the second half of the yr and particularly, within the fourth quarter. In terms of costs, we do see a discount within the pricing and there’s a pricing strain and quantity strain as nicely within the fourth quarter, given the truth that we’re now trying into the volumes we’ve got. So principally, that’s the reply to that query. On Protection, you see very clearly that Protection is a part of our 2028 plan. It’s a contributor in. We’re very proud of the Protection relating to profitability, order backlog, future alternatives. So I believe that’s the reply to that. On the M&A, I’m not towards M&A. However I believe what we’ve got hammered out, which I believe is actually, actually constructive for us is our reporting technique. You are proper that we aren’t the biggest, however we do have entry to — with our companions, each when it comes to expertise, when it comes to the merchandise and when it comes to price sharing and people sort of issues. So the associate technique that has been laid out, I believe it is a very, very fruitful and for us, a really appropriate technique to proceed.
Operator: We are going to take our subsequent query from Monica Bosio, Intesa Sanpaolo (OTC:).
Monica Bosio: Welcome Olof. My first query is on the restoration when it comes to free money move of what you misplaced within the second quarter. Ought to we assume some restoration already within the third quarter, which is often a damaging quarter when it comes to free money move. I can think about that it’ll hold damaging, however I am simply questioning if it will likely be much less damaging or alternatively if the restoration within the free money move will likely be largely back-end loaded within the final a part of the yr? And my second query is on the medium and heavy-duty truck. Are you able to give us any taste on the profitability of the section? And what do you anticipate by the year-end, additionally on the again of the mannequin yr? And the final was on the Bus section, which appears to be stronger than anticipated. So I am simply questioning when you can provide us an perception on the backlog and the order if the orders are already protecting 2025?
Anna Tanganelli: Monica, it is Anna right here. So let me get your reply to the primary query. So on the money move, for positive, what we’re doing in Q3 is to recuperate, to illustrate, from an — discount of the commercial inventory perspective, and we’re working laborious to translate that additionally in money move. In order that’s why we’re saying we’ll absolutely recuperate in H2. Clearly, our goal is to attempt to see some advantages already in Q3. As you appropriately mentioned, Q3 often for us is a money absorbative quarter. It is in step with our standard seasonality. We have been very vocal in saying we’re working to stability the seasonality. However clearly, it isn’t one thing we will do in a single day. So 2024, we see the transition yr. So I believe it is protected to say we’ll absolutely recuperate by year-end. Then clearly, we’re working laborious to drag it forward as a lot as potential. On profitability for medium and heavy, we’re in Q2 in, say, in mid single-digit, say, space, excluding, clearly, the impression of the ASCO, the previous Nikola Iveco joint ventures, and this pattern will I imply, in our assumption, will proceed additionally within the second half. So we’ll proceed to be round, I might say, single — mid-single digit.
Monica Bosio: Sorry, with constructive as a result of medium and — so medium can be mid-single digit. However as for the — just for the heavy section, ought to we nonetheless anticipate a constructive — extra constructive? Is it right?
Anna Tanganelli: I might say, a breakeven territory. We hope to be in a slight constructive territory as nicely, however to illustrate, between breakeven and slight constructive.
Olof Persson: And relating to previous order backlog, I imply we already acknowledged that we do have as much as half yr 2025 lined in our order backlog. What I can say, what I see, and after I speak to the Bus folks, there’s loads of alternatives the place the Bus is nicely positioned, each in metropolis buses and in intercity the place we’ve got a really robust place particularly available on the market share. So — however proper now, to reply your query, it is going as much as half yr 2025 order backlog manufacturing.
Operator: We are going to take our subsequent query from Daniela Costa, Goldman Sachs.
Daniela Costa: I’ve two questions. I will ask them at a time to make it straightforward for you. But when we go into, I assume, the backlog exhaust this yr, if we go into ’25 the place the top market nonetheless depressed with the pricing scenario that you’ve got highlighted and with restricted backlog. Are you able to recall like what levers do it’s important to hold profitability flat? Or would it not go down, something form of in mounted price that you are able to do? How will you cope with it whether it is extra extended?
Olof Persson: Sure. fast. I imply there are a selection of levers, after all, nevertheless it’s all in regards to the planning, proper? So it is a cyclical enterprise we’ve got been up and down earlier than. And very first thing it’s important to do is to regulate the manufacturing charge. That’s to just remember to do not overproduce and thereby additionally not solely our personal manufacturing however the entire change again to the suppliers, so we do not get an excessive amount of of fabric coming in. And that’s, as you’ve got seen, we’ve got already began doing. We’ll have one other look and we’ve got very a lot the problem round that below management, and we’ll do manufacturing adjustment. Then we’ve got the manufacturing prices. Now we have executed an excellent job, I believe, each in final yr and this yr and really lowering the product price, which means that we’ve got a greater form of cushion with the intention to handle the swings that’s coming. After which lastly, I imply, we will certainly go relating to the Truck enterprise Mannequin 12 months ’24, needed to work on the pricing as nicely, proper? So it is a pricing challenge. However your query was extra associated to essentially quantity impacting. Then we do see Bus and Protection is growing. So I imply, that is what you discuss to the truck, however for the Iveco in whole, Bus and Protection is planning to extend their output throughout subsequent yr as nicely. So I hope that covers your query.
Daniela Costa: Sure. And the second is only a follow-up on the pricing, simply to know a bit extra your remark concerning This fall and what you are seeing. Is it throughout the vehicles LCV and medium and heavy-duty? Or is it concentrated into one of many pockets that what you are mentioning? And associated to that, is it your view that it would occur? Or do you truly see concrete indicators from a few of your friends dropping costs already?
Olof Persson: I believe the problems we’ve got right here is the visibility into the volumes in This fall, proper? We do have, as I mentioned, an excellent visibility on Q3 based mostly on our backlog. And we must achieve visibility in there. In our steerage and within the full yr numbers that we introduced, we’ve got assumed a value discount and a mannequin combine kind of adjustment, however that can also be then offset with our manufacturing prices by as nicely. So I believe we’d like right here to see somewhat little bit of visibility coming in. We have to ensure that we get the value positions additionally for our Mannequin 12 months ’24, proper, tremendous essential, and I will be closely concerned in that to ensure that we find yourself with the appropriate value place there. After which we will have the visibility coming into This fall somewhat bit later or one thing.
Daniela Costa: Sorry, what do you imply on the pricing for the Mannequin ’22? It’s too costly now? It’s too low cost, I’m not positive I perceive.
Olof Persson: Sorry, I wasn’t clear. Thanks for clarification. What I imply is that Mannequin 12 months ’24 is a brand new Truck. It has new performance, as new enhancements for the shopper, has higher economics for the shopper. All of that should ensure that we now — through the launch are getting a really tight and disciplined value coverage for mannequin yr 2024 to get into the market as a result of it is a actually good monitor and we have to ensure that is dealt with correctly within the pricing, and that is what we will focus. Hope that clarifies, sorry for complicated you.
Operator: We are going to take our subsequent query from Miguel Borrega, BNP Paribas (OTC:) Exane.
Miguel Borrega: The primary one, simply to know this variation over to the brand new Mannequin 12 months 2024 when it comes to orders and deliveries? Orders have been clearly declining for a lot of quarters now. And I do wish to perceive what is the impression from the changeover and the impression from a weaker market? Is there any means that you could sort of present shade on why are orders declining a lot? Is it largely due to the technical impact on the changeover? Or most of that may be a weaker market atmosphere? After which how do you anticipate the leverage to evolve into the second a part of the yr in 2025. Ought to we anticipate a powerful pickup in orders within the second half to help the 2025 deliveries or certainly the deliveries in 2025 are going to be materially down? I do know it is nonetheless early, however simply wish to perceive the way you view the move by orders and deliveries on the brand new Mannequin 12 months?
Olof Persson: So in our estimation for the complete yr, sequential now, sequential. We’re anticipating a pickup within the order consumption each on the sunshine and on the heavy because of the Mannequin 12 months ’24 redo, which we’re now rolling out. So we’re rolling it up. The rubbers additionally hit the highway. And in — as we communicate, we’ve got form of unlocked the non permanent points that we did have, I wish to say that. And ensuring that we now have a gentle move of autos coming in, first within the industrial stock after which over to the seller stock and out to the shopper. That creates a momentum by the gross sales group that take these new merchandise and exit and ensuring that the implementation and the rollout of this new mannequin yr is occurring. So we’re within the midst of that proper now. And I am coming again to my remark earlier in regards to the This fall missing visibility. And if This fall missing visibility, after all, the primary half of 2025 can also be very a lot missing visibility as we do proper now. So we might want to kind our form of each the manufacturing schedule, the fee discount targets, all the opposite targets we’ve got set once we get somewhat bit extra visibility into that. However the truth, because the matter is that I imagine and I see and I actually imagine that the shopper will see it as nicely. Now we have an excellent lineup now with mannequin yr ’24 that may carry us an excellent place additionally going ahead no matter what sort of market improvement we see.
Miguel Borrega: After which secondly, only a follow-up to the free money move query. Assuming Q3 is flat from final yr, you would wish about EUR 1.2 billion, EUR 1.3 billion in This fall to attain the midpoint of your steerage. Now provided that the market is clearly weakening sequentially, how assured are you on a really robust This fall sort of what you had final yr, however final yr, the market was a lot stronger. And also you simply talked about that you simply already anticipate some pricing strain into the second half. So given the whole lot mixed, how assured are you in additional than EUR 1 billion of free money move in This fall?
Anna Tanganelli: Sure. In order we mentioned, to start with, we’ll reabsorb the hole completely in H2. As I mentioned earlier, whereas answering to Monica, clearly, our goal is to attempt to put it forward as a lot as potential. We’re very assured to attain our steerage. That is clear. Now we have actions in place to get there. Additionally as a result of the drop within the volumes and the pricing strain was already factored in our steerage. So even assuming we will likely be precisely in step with the money move efficiency of H2 of final yr. And the upside in H2 in comparison with H1 would be the restoration of the shortfall we suffered in Q2. And as I mentioned, there was additionally — I imply, the market efficiency was already factored in, in our steerage. That is why we’re assured to attain that steerage. And in addition, please think about, for now, we’re very prudent on the evolution of Argentina. We already improved versus our final name the steerage on the monetary costs. Clearly, we have to see how that scenario additionally evolves as a result of if the devaluation doesn’t happen or happens to a decrease extent than what we’ve got assumed that may be an upside. So simply to say, we’ve got a number of levers we’re already activating to satisfy that steerage. And as I mentioned, most of those damaging tendencies have been already factored in once we gave the EUR 350 million to EUR 400 million goal.
Operator: We are going to take our subsequent query from José Asumendi, JPMorgan.
Jose Asumendi: Welcome, Olof. A few questions, please. The primary one, are you able to speak somewhat bit in regards to the actions you took within the first half or second quarter to regulate your manufacturing price base decrease, particularly in heavy-duty. And do you’ve got any of the advantages kicking in, within the second half of the yr? Or have you ever taken a lot of the advantages already within the first half? And on this subject additionally associated, are you able to verify once more that you simply’re seeing order consumption in heavy-duty stabilizing in Q3 versus Q2? And the second query, Olof, are you able to speak somewhat bit in regards to the Foton partnership, three way partnership collaboration that you’ve got? I perceive proper now, it is principally on the EV Van section. However may you increase this partnership to develop in China? Might you additionally carry the heavy-duty architectural Foton into Europe. I will likely be very to listen to about this partnership, please.
Anna Tanganelli: I will begin with the manufacturing because the product price evolution that was your query. So we had a constructive efficiency in Q2. So to start with, sorry, to deal with your query, no, we anticipate advantages additionally in H2. As we mentioned additionally throughout our Capital Markets Day, this yr is predominantly — the product price evolution is predominantly linked to, to illustrate, the constructive pattern of our uncooked supplies, which is for now being considerably confirmed. As we mentioned in Q2, you see a flattish product price year-over-year efficiency was just because the constructive outcomes we achieved in Europe, which accounted for EUR 40 million simply within the quarter. And simply to remind you, in H1, all in all, we had year-over-year nearly EUR 150 million of product price enchancment. Nonetheless, in Q2, that was absolutely offset, I might say, by the damaging impression of FIFO methodology for our uncooked materials inventory in Argentina. In H2, we’ll proceed to see a few of this damaging impact. Nonetheless, the contribution — the constructive contribution from uncooked materials costs from all our industrial actions on the buying facet, we’ve got kicked off ought to be seen. And so it’s best to see a constructive web contribution regardless of the potential repeatedly damaging FIFO impact in South America. Similar for manufacturing effectivity, plant effectivity, they’re repeatedly constructive. Clearly, Q2 was affected additionally by the Mannequin 12 months 2024 launch, however the impression was not materials. So the plant effectivity continues to be constructive additionally in Q2 and will likely be repeatedly, to illustrate, bringing a constructive end result additionally in H2 of this yr. I hope I addressed your query.
Olof Persson: Okay. And thanks in your query about Foton. Simply to underline that it is a Memorandum of Understanding, and we at the moment are investigating to make sure potential collaboration. The primary a part of this and absolutely the lion a part of that is the electrical sort of van under the — across the 3.5 tonne, which is then a lineup — it elevated our lineup for under the Iveco Every day tonnages. So that will form of increase our market attain, increase our buyer attain, and it’ll even be good for our sellers, proper? So that’s the absolute concentrate on it. Then we’ve got mentioned that — and that’s for Europe and South America. After which we’ve got mentioned additionally that we — if there are any provide alternatives with Powertrain, that’s one thing that we can also talk about to see if there’s something there that may be introduced. However from the heavy-duty Truck, no, we’ve got not mentioned that in any respect. So that is gentle lights, you may say, it is under our regular Iveco each day 3.5 tonne.
Operator: We are going to take our final query from Shaqeal Kirunda, Morgan Stanley.
Shaqeal Kirunda: Shaqeal Kirunda from Morgan Stanley. Are you able to inform us in regards to the challenges you have confronted with ramping up the brand new mannequin yr ’24 manufacturing and why we ought to be assured that this will likely be resolved by This fall?
Olof Persson: Completely. I imply, to start with, we’ve got realign the entire manufacturing system in Europe for vehicles, proper? So all vegetation at the moment are solely producing Mannequin 2024. And that is why I form of wished to emphasize the main endeavor was the shift over this manufacturing. So we’ve got our entire manufacturing setup and infrastructure at our disposal with the intention to produce each the light-weight, the medium and the heavy one. So it is a full shift over that we’ve got executed within the second quarter, which was a serious endeavor has resulted in lots of occasions defined what it’s now. However once more, I wish to reinforce that we see the machine is now following by and we begin to see the machines popping out to prospects and the whole lot. In order that — I am not frightened in regards to the manufacturing charge. Now we have our manufacturing charge that we will go up and down. And as was associated to in an earlier query, the entire manufacturing output is one thing that we’re trying into very rigorously and regularly to ensure that we’re in step with it. However ramping up, no downside.
Shaqeal Kirunda: And only a follow-up. So trying on the Truck trade quantity outlook versus the year-to-date volumes, you are anticipating a powerful market within the second half. And to this point, each in gentle industrial autos and medium and heavy, Iveco deliveries have underperformed the market. So are there some other facets to contemplate in evaluating Iveco supply to the market, akin to nation or buyer combine? Or is all of it going to be from this Mannequin 12 months changeover?
Olof Persson: I imply the Mannequin 12 months changeover is in Europe, proper? So we’re in — and that is why we’re clear about European infrastructure. In South America, we’re doing different forms of autos however not the Mannequin 12 months ’24, let’s put it that means. The difficulty in regards to the market, and as I mentioned earlier than, we anticipate sequentially the market or our order consumption to extend through the second half, so I do not actually know the — I did not perceive the query you had in regards to the underperformance of the market.
Shaqeal Kirunda: Simply evaluating the deliveries of the Iveco to deliveries available in the market in Europe?
Anna Tanganelli: Sure. I see what you imply. Effectively, to start with, as we noticed within the slide what Olof introduced earlier, our market share are up I might say, in all segments. When it comes to variety of items, to start with, our gentle industrial autos items have been up year-over-year. We noticed a drop on the, say, medium heavy or heavy facet. After which, as Olof was mentioning, the impression was in South America as a result of as you very nicely know, we aren’t simply current in Brazil, but in addition in Argentina, the place most of our opponents should not current and you already know very nicely the nation goes by a recession. So if we hold South America facet for the second we focus simply on Europe, as mentioned, possibly you see a drop on medium and heavy, however sure, that is linked to the shift of the phaseout and phase-in of the 2 Mannequin Years. However to be trustworthy, I mentioned, our market shares are up. So we’re fairly glad with our Q2 outcomes, then the query is extra on the outlook, however Olof already addressed that query. So I hope we obtained you the solutions you wanted.
Operator: That can conclude right now’s convention. Thanks in your participation, women and gents. You could now disconnect.
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