Ford has set out its latest financial plans in a presentation to a JP Morgan conference. These included – by mid-decade – increased capital spending, reduced debt, improved credit ratings and ‘attractive shareholder returns’.
Chief Financial Officer Bob Shanks told delegates that he expects the company’s One Ford strategy to underpin an improving balance sheet and continuing attractive shareholder returns.
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“One Ford will continue to deliver, over time, an improving investment grade balance sheet, a growing business with strong operating margins, and sustainable dividends as we invest our capital in operations that generate returns in excess of the cost of capital,” Shanks said. “As we continue to do this we expect to provide attractive total shareholder returns.”
Ford projects capital spending will be boosted by 25% by mid-decade to US$7.5bn as it works to meet increased global demand.
Shanks also said that projected operating and capital spending targets would be aligned with improving credit ratings – something that would stand the company in good stead for the future.
“Continuing strong operating profit and execution of our capital strategy will result in improving credit ratings for the company which should enable us to sustain investment grade credit ratings through the inevitable downturn to come,” he said.
Shanks confirmed that the guidance for this year is unchanged since the company released its second quarter results.
“We expect this year to be another strong year for Ford Motor Company, somewhat better, in fact, than our expectations earlier this year. In terms of our financial performance we expect total company pre-tax profit to be about equal to or higher than that last year. This would make the fourth consecutive year of pre-tax profit at or better than US$8bn. We also expect automotive operating margin to be about equal to 2012 at 5%.”
