On February 5, 2020, a flag with the CNH Industrial logo was photographed outside the CNH Industrial Building in Turin, Italy. REUTERS/Massimo Pinca/File Photo

Milan, November 18 (Reuters)-Iveco will focus on zero-emission trucks and buses, and is committed to acting like a flexible startup, as its owner CNH Industrial (CNHI.MI) is preparing to spin off the Department, focusing on agricultural machinery and construction equipment.

In an investor speech on Thursday, CEO-designate Gerrit Marx stated that Iveco should be regarded as a "150-year-old startup company" capable of "surpassing and surpassing" larger competitors.

CNH's spin-off move reflects a similar move by Daimler (DAIGn.DE). Its truck business will be listed next month and will follow Volkswagen's (VOWG_p.DE) truck division Traton (8TRA.DE) in 2019. read more

Traton acquired American truck manufacturer Navistar this year because the industry faces the costly challenge of developing all-electric models for short-distance trucks and developing hydrogen fuel cells for long-distance trucks.

According to 2020 data provided by the lobby group ACEA, Iveco is the second largest medium-sized commercial vehicle market in Europe, second only to Daimler, but lags behind its competitors in the heavy commercial vehicle market.

In its listing prospectus, Iveco also produces special vehicles and defense vehicles and power systems, saying that its spin-off from CNH will help the two parties to participate in the integration.

Marx said at the press conference that Iveco will pay attention to partnerships in Asia with great interest, which will give them the opportunity to share technologies, supply components to each other, or carry out joint development projects.

"This is a meaningful global cooperation... This is almost a goal we set for ourselves," he said in response to questions that may be of interest to Hyundai Korea (011760.KS) and Geely China (0175). HK).

The offshore yuan closed down 1.2%, while the Milan Blue Chip Index (.FTMIB) rose 0.6%.

CNH shareholders will receive one Iveco share for every 5 CNH shares. Analysts estimate that Iveco's market value may reach around 4 billion euros.

Banca Akros analyst Gabriele Gambarova said that Iveco is on the right track in terms of emissions and financial services, and has a strong performance in defense vehicles and power systems.

"However, my feeling is that the small scale and low profit make it a target for mergers and acquisitions," he said.

Iveco said on Thursday that it will develop a series of all-electric buses by 2023 and a series of new electric and fuel cell heavy-duty trucks by 2024.

As a latecomer to electric trucks, Iveco has established a joint venture with the US Nikola Group (NKLA.O) to produce pure electric vehicles. Nikola Tre heavy-duty trucks and hydrogen fuel cell trucks will be produced at the end of 2023. read more

Iveco's goal is to have revenues between 1.65-17.5 billion euros (1.87-198 billion US dollars) by 2026, a compound annual growth rate of 5% compared to 2019 before the COVID-19 pandemic.

CNH shareholders will approve the spin-off on December 23, paving the way for Iveco's stock to begin trading on January 3.

It predicts that the adjusted operating margin of industrial activities in 2026 will be 5.0-6.0%, higher than the 3.6% in 2019.

Its goal is to have a free cash flow of 500 million euros in 2026, higher than the 30 million euros in 2019. (1 USD = 0.8819 Euro)

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