Iveco Group (IVG) Q3 2024 earnings summary

Executive summary

• Q3 2024 performance was solid, with positive pricing and cost management offsetting lower volumes in trucks and powertrain, while new Model Year 2024 products ramped up and received positive customer feedback; bus and defense segments delivered strong growth, with the bus order book covering production into 2026.

• Adjusted EBIT margin for industrial activities was 5.0%, slightly below last year's record, with consolidated adjusted EBIT margin stable at 6.0%; free cash flow improved by €56 million year-over-year.

• The Fire Fighting business was classified as discontinued operations, with the sale expected by January 2025 and a €115 million loss recognized.

• Efficiency program acceleration and investment reprioritization are planned for 2025 to enhance agility, reduce operating spend, and lower breakeven.

• Net profit from Continuing Operations for the nine months ended 30 September 2024 was €296 million, up from €290 million in the prior year period.

Financial highlights

• Q3 2024 consolidated net revenues were €3.4 billion, down 7.1% year-over-year; industrial activities net revenues at €3.35 billion, down 7.4%.

• Adjusted EBIT for Q3 was €206 million (6.0% margin); industrial activities adjusted EBIT at €167 million (5.0% margin); adjusted net income at €106 million; adjusted diluted EPS of €0.39, up €0.07 year-over-year.

• Free cash flow of industrial activities improved by €56 million year-over-year to -€286 million; available liquidity at quarter-end was €4.4 billion, with €1.9 billion undrawn committed facilities.

• For the nine months, net revenues of industrial activities were €10.5 billion, down 4.6% year-over-year; adjusted EBIT at €632 million, up 3.1%.

• Financial Services net revenues up 3.9% to €132 million in Q3; managed portfolio at €7.6 billion, with return on assets at 2.2%.

Outlook and guidance

• Full-year 2024 guidance confirmed: group adjusted EBIT €920–970 million; industrial activities net revenues expected to be ~4% lower than FY 2023; industrial activities adjusted EBIT €790–840 million; free cash flow €350–400 million; investments around €1 billion.

• Q4 expected to be down year-over-year for both light- and heavy-duty trucks in Europe; 2025 European heavy-duty truck market forecast: 280,000–290,000 registrations, indicating stabilization.

• Industry volume outlook for 2024: European LCV up ~5%, M&H trucks down 15%, buses flat; South America and Rest of World expected flat to slightly positive.

• Efficiency program acceleration and investment reprioritization planned for 2025 to reduce operational spending while maintaining product plans.