Iveco Group (IVG) Q4 2023 earnings summary

Executive summary

• FY 2023 consolidated revenue rose 12.9% to €16.213bn; adjusted EBIT increased €413mn to €940mn, with a 5.8% margin, up 210 bps.

• Industrial Free Cash Flow was €412mn; year-end Industrial net cash was €1.852bn, affected by the Argentine peso devaluation.

• FY24 guidance targets adjusted EBIT of €900–950mn and Industrial Free Cash Flow of €350–400mn; consolidated revenue is expected to decline ~5%.

Financial highlights

• FY23 Industrial revenue was €15.877bn, up 12.1%; adjusted EBIT was €818mn, up €394mn, with a 5.2% margin, up 220 bps.

• Reported EBIT was €837mn and reported profit €234mn; adjusted diluted EPS was €1.23, versus reported diluted EPS of €0.80.

• Q4 consolidated revenue was €4.877bn, up 10.4%; adjusted EBIT was €264mn, up €58mn, and adjusted EBIT margin was 5.4%, up 70 bps.

• Financial expenses rose to €450mn from €206mn, reflecting higher interest rates, Argentine peso devaluation and hyperinflationary accounting.

Outlook and guidance

• FY24 adjusted EBIT guidance: €900–950mn consolidated and €770–820mn for Industrial Activities; Industrial Free Cash Flow guidance is €350–400mn.

• Industrial net revenue is expected to decline ~5% YoY; consolidated net revenue is also expected to decline ~5%, including currency translation effects.

• FY24 investment guidance is less than €1bn; adjusted EBIT margin is expected to be stable or slightly higher, supported by positive net pricing and lower production costs.

• Powertrain, Bus and Defense profitability is expected to rise YoY; MY24 truck upgrades are expected to support LCV and mitigate the European HDT slowdown.

• Guidance reflects current industry visibility and solid order backlogs, with no unusual order cancellations.