Iveco Group unveils new 2028 Strategic Plan: New partnership with Ford Trucks; Extends links with Hyundai; Sells Magirus

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Iveco Group has presented a new Strategic Plan, outlining objectives up to 2028 during the Company’s Capital Markets Day held in Turin, Italy. A number of announcements were made: 

  • New partnership with Ford Otosan on Heavy-Duty Truck cabin structures
  • Strategic Partnership with Hyundai Motor Company extended and deepened

In its prior strategic plan from 2021, Iveco Group targeted total Net Revenues of Industrial Activities at between €16.5 and €17.5 billion by 2026 and it achieved €15.9 billion by year-end 2023, proving to be fully on track. The 2026 Adjusted EBIT margin of Industrial Activities was to reach between 5 and 6% (from 3.6% in 2019) which the Company already achieved in 2023. These are outcomes largely attributable to the company’s focused delivery and ‘one team’ approach, which unites its global workforce of over 36,000 employees towards a common purpose, according to Gerrit Marx, CEO, Iveco Group.

The key strategic pillars for future growth

The Group’s pathway is underpinned by four key pillars: Innovation, Financial Discipline, Partnerships and Sustainability. These pillars drive the success of each Business Unit and enable the overall Group to collectively withstand external challenges and focused spending.

Innovation

Iveco Group fully backs the investments it has made since operating as an independent Company and will invest over €5.5 billion from 2024 to 2028 in order to stay on the front end of the very fast innovation curve.

The Company is driving Innovation in three key areas: Energy Transition, Artificial Intelligence (AI) & Software Defined Vehicles, and Autonomous Driving.

In Energy Transition, the Company reaffirms its aim to reach net zero carbon emissions by 2040.  Instrumental to this achievement is Iveco Group’s multi-propulsion approach that includes green and zero-emission solutions. These will be backed by innovative pay-per-use business models, such as GATE – Green & Advanced Transport Ecosystem. Initially launched in Italy in mid-2023, with a focus on Iveco Group’s ZEV (Zero Emission Vehicles), GATE’s five-year ambition is to scale up, evolving into a brand-agnostic platform open to other OEMs’ vehicles.

Artificial Intelligence is central to Iveco Group’s customer-centred innovations, with Generative AI enabling significant advancements in areas such as data analysis, machine-human interaction, and software development. Software Defined Vehicles, powered by AI algorithms, are set to revolutionise the industry, simplify vehicle updates, and increase customer productivity. To remain on top of these trends, Iveco Group has inaugurated its own Software & Analytics Lab, with plans for a team of 500 specialised engineers in the coming years.

Iveco Group is already testing Autonomous Driving on public roads in Europe. For this development and its swift commercialisation, collaboration with PLUS, a global provider of self-driving truck technology, alongside other truck OEMs is fundamental. These advancements offer already today highly automated driver assistance systems to drivers and fleet owners.

Partnerships

Iveco Group is extending and deepening its partnership with Hyundai Motor Company in the area of electric heavy-duty truck solutions, including both battery electric trucks and fuel cell electric trucks for European markets.

Since initiating their partnership in March 2022, Hyundai Motor and Iveco Group have achieved a series of significant milestones. Notably, in September 2022, they unveiled the first IVECO eDaily Fuel Cell Electric Vehicle at the IAA Transportation event in Hanover. This was followed by the debut of the IVECO BUS E-WAY H2 in October 2023 at Busworld in Brussels. Most recently, in February of this year, the two companies announced the signing of a supply agreement for an IVECO-badged all-electric light commercial vehicle for Europe, based on Hyundai’s eLCV platform.

Also, IVECO and Ford Trucks, the heavy commercial vehicles brand of Ford Otosan, announce a non-binding Memorandum of Understanding to explore a collaboration on the development of a joint cabin structure for heavy-duty trucks compliant with the new regulations coming into force in 2028/2029. This is a preliminary step in the co-development of new products and technologies, encompassing components and systems within the cabin.

This new link between both companies rekindles the original coming together of Ford Trucks UK and the early days of the formation of Iveco in the mid to late 1970s.

Sale of Magirus

The Fire Fighting Business Unit (regrouped under the MAGIRUS brand) is not included in the new Strategic Business Plan of Iveco Group, nor in the related projected financials. As the Group announced to the market, it has just signed a definitive agreement for the transfer of its ownership to Mutares, a publicly listed investment group specialized in similar situations. This marks a new chapter in the long-standing history of the brand that is “serving heroes since 1864”, enabling it to compete even more efficiently and effectively in its unique market.

 

 

 

 

Associated IVECO Brands

POWERTRAIN (FPT Industrial brand)

The Powertrain Business Unit is one of the top three independent engine manufacturers globally. The Unit’s focus on both Internal Combustion Engines (ICE) and ePowertrains positions it uniquely for the shift towards alternative fuels and electrification, ensuring a sustainable and profitable future.

With a diversified portfolio and a robust capacity for innovation, the Powertrain Business Unit aims to reach between €5.5 and €6 billion in Net Revenues by 2028 (previous target at €~5 billion by 2026) and is targeting double-digit profitability, which means growing its Adjusted EBIT margin by roughly 100 basis points every year, up to 9.5-10.5% at year-end 2028.

BUS (IVECO BUS and HEULIEZ brands)

The Bus Business Unit relies on its full offering of vehicles across all segments and on a strong focus on local communities. An investment of €600 million in advanced technology between 2024 and 2028 will ensure the unit remains at the forefront of the industry, particularly in the area of zero-emission vehicles.

The Bus Business Unit aims to reach between €3 and €3.5 billion in Net Revenues by 2028 and is determined to increase the scale of business and optimise operations so as to almost double its profitability versus 2022, reaching 7-8% by 2028.

DEFENCE (IDV and ASTRA brands)

Within Iveco Group, Defence functions as an independent and self-sufficient Business Unit, which emphasizes technological innovation, operational excellence, and strategic partnerships. Its strengths reside in its capability and adaptability to fulfil specific customer needs, thereby continuing to responsibly support numerous countries worldwide in keeping their communities safe.

The Business Unit is accelerating its growth, supported by an order book today already exceeding €4 billion. It projects to reach between €1.2 and €1.3 billion in Net Revenues by 2028, with an Adjusted EBIT margin of 12 to 13%.

TRUCK (IVECO brand)

The Truck Business Unit aims to leverage its leadership in the Light Commercial Vehicle segment with the Daily and eDaily, and in the medium-duty truck range with the well-known Eurocargo, while improving the margins of its Heavy-Duty Truck segment with the S-Way and S-eWay models. Technological innovation, financial discipline and strategic partnerships will drive its success.

The Unit aims to reach €11.0-11.5 billion in Net Revenues by 2028 with an Adjusted EBIT margin of approximately 7%.

FINANCIAL SERVICES (IVECO CAPITAL and GATE brands)

The Financial Services Business Unit is focused on maintaining its current successes while pioneering new, sustainable mobility solutions, including those provided by GATE, the 100% e-born and digital native platform for medium-long-term pay-per-use rental of electric commercial vehicles.

The Unit aims to grow its captive portfolio at between €8 to €9 billion versus €6.9 billion in 2023, with an Adjusted EBIT in the range of €130 to €150 million by 2028.

Iveco Group’s financial targets for 2028

On the back of the individual ambitions of its Business Units, Iveco Group announces ambitious targets for 2028. These goals reflect the Group’s commitment to its continued growth and its confidence in its ability to deliver on its promises.

The 2028 Iveco Group’s financial targets are, for the Industrial Activities:

  • Net Revenues of approximately €19 billion;
  • Adjusted EBIT margin of 7 to 8%;
  • Free Cash Flow of approximately €0.9 billion.

At Group level:

  • Adjusted Net Income of approximately €0.9 billion;
  • Adjusted diluted EPS exceeding €3 per share.