The announcement of Defense sector spin-off by 2025 and 2024 results better than expected they gave wings to the title Iveco, which a Square Business records a 14,5% surge. After months of speculation about joint ventures and acquisitions, today comes the official announcement: "The Board of Directors is evaluating the separation, during 2025, of the Iveco Group's Defense business, which includes the Idv and Astra brands and related activities, through a spin-off", declared Olof Persson, CEO of Iveco. Meanwhile, the industrial group closed 2024 with to evaluate e margini growing, announced an increase in dividend at 0,33 euros per share and proposed a program of buyback up to 130 million euros.
At Piazza Affari, Iveco shares jumped over 15% after the announcement of the spin-off and the 2024 accounts. In the last six months, the stock has gained over 50%. Analysts at Intesa Sanpaolo define the spin-off as “a positive catalyst for the stock”, confirming the “Buy” rating with a target price of 14,3 euros.
Iveco Defense Spin-Off: How Much Is It Worth and Why Could It Change the Group's Future?
La separation of defense activities responds, according to Persson, to a need for greater focus campaigns. “A separation would simplify the group structure, increase management focus and create strategic flexibility for both businesses,” the CEO explained, specifying that the evaluation is still ongoing and that any subsequent steps will be subject to the necessary approvals.
Il value of Iveco Defence Vehicles (Idv) is not insignificant: analysts estimate a value between 750 million and 1 billion eurosor, and the interest from potential buyers is real. In the past, Leonardo – the Italian defense giant – has shown interest in Idv, collaborating in the production of tracked vehicles for the Italian Army, with a work share ranging from 12 to 15% in the joint venture with Rheinmetall.
Iveco: 2024 accounts better than expected
In addition to the news of the spin-off, Iveco Group presented solid results for 2024. The group closed 2024 with revenues equal to 15,28 billion euros, down from 15,9 billion in 2023, but still higher than analysts' expectations, who had forecast revenues of 15,12 billion. Industrial activities generated 14,95 billion euros, with a adjusted ebit growing to 982 million euros (compared to the 969 million expected). The operating margin was 6,4%, while theadjusted net profit saw a significant increase to 569 million euros (+181 million compared to 2023), with a eps adjusted of 2,09 euros (+0,74 euros compared to 2023).
Despite a decline in free cash flow of industrial activities, which stood at 402 million euros (against 450 million in 2023), the liquid assets available assets of the group increased to 5,47 billion euros (+726 million).
Richer Dividends and New 130 Million Buyback
The Board of Directors will propose to the shareholders' meeting on 16 April 2025 a dividend of 0,33 euros per share, for a total of 90 million euros, up from the 0,22 euros per share distributed in 2023. In addition, the authorization for a new buyback program, which provides for the purchase of up to 10 million shares, for a total value of 130 million euros. The program will last 18 months, will be financed by the group's available liquidity and will replace the existing one, expiring in October 2025.
Outlook 2025: Iveco predicts a two-speed year
For the current year, Iveco expects a adjusted ebit between 980 million and 1,03 billion of euros, with revenues netti of industrial activities substantially stable compared to 14,95 billion in 2024. For theadjusted ebit of industrial activities, the group expects a result between 850 and 900 million of euros, while the free cash flow it is expected between 400 and 450 million euro.
In heavy vehicle market, the group expects European registrations between 280 thousand and 290 thousand units, indicating a stabilization of the sector. For the vehicles average, volumes could slightly decline compared to 2024, while for light vehicles the outlook is for substantial stability. 2025, therefore, is expected to be a year of two speeds: a weaker first half, followed by a recovery in the second part of the year.
In two-year period 2025-2026, Iveco plans to accelerate efficiency programs, reducing operating expenses by 300 million of euros without impact on product development.
