Fiat Chrysler

(30.47% of ordinary share capital, 30.09% of preferred share capital and 23.59% of savings share capital)

 

The main consolidated results of Fiat-Chrysler in 2011 are as follows:

  Year  
€ million 2011(*) 2010 Change
Net revenues 59,559 35,880 23,679
Trading profit (loss) 2,392 1,112 1,280
Operating profit (loss) 3,336 992 2,344
Profit (loss) 1,651 222 1,429
Profit (loss) attributable to owners of the parent 1,334 520(**) 814
(*) Following the acquisition of an incremental 16% ownership interest in Chrysler (fully diluted), in addition to potential voting rights associated with options that became exercisable thereafter, Chrysler’s financial results were consolidated by Fiat from June 1, 2011. (**) Profit pre-Demerger.
  Balance at
€ million  12/31/2011  12/31/2010
Total consolidated assets 80,031 73,442(*)
Net (debt) / cash (8,998) (2,753)(**)
- of which: Net (debt) / cash of the Industrial Activities (5,529) (542)(**)
Equity attributable to owners of the parent 8,727 11,544(*)
(*) Amounts referred to the Fiat Group pre-Demerger. (**) The amounts take into account the effect of the Demerger of Fiat Industrial on January 1, 2011.

Net revenues for the Group for 2011 totaled €59.6 billion. Excluding Chrysler, revenues were €37.4 billion, gaining 4.2% compared to 2010.

 Year 
€ million 2011 2010 Change %
Automobiles (Fiat Group Automobiles, Chrysler, Maserati, Ferrari) 52,967 30,130 75.8
Components and Production Systems (Magneti Marelli, Fiat Powertrain (*), Teksid, Comau) 11,965 10,865 10.1
Other Businesses 1,083 1,159 (6.6)
Eliminations (6,456) (6,274)  
Net revenues 59,559 35,880 66.0
(*) Includes the activities of the Passenger & Commercial Vehicles business line of the former FPT Powertrain Technologies sector.

Fiat Group Automobiles (FGA) posted revenues of approximately €28 billion in 2011, in line with 2010, with 2,032,900 passenger cars and light commercial vehicles shipped (-2.4% over the prior year). The 7.6% increase in light commercial vehicle volumes for the year did not fully offset the 4.6% decline in passenger car shipments, which were impacted by continuing weak demand in Italy. In Brazil, FGA shipped a record total of 772,700 vehicles (+1.5% over 2010).

Chrysler reported revenues of €23.6 billion for the 7 months from June-December on worldwide vehicle shipments of 1,190,000 (2,011,000 for the full year, up 26% year-over-year).

For Luxury and Performance brands, Ferrari posted revenues of €2.3 billion, up 17.3% over 2010, while revenues for Maserati were €588 million, in line with the prior year.

Components & Production Systems had revenues of approximately €12 billion, a 10.1% increase over 2010, with all sectors posting solid growth for the year. For Magneti Marelli, revenues were up 8.5% to €5.9 billion.

Trading profit (loss)

Trading profit for 2011 totaled €2,392 million, with trading margin at 4.0%. Excluding Chrysler, trading profit was €1,047 million (€1,112 million for 2010), with trading margin at 2.8% (3.1% for 2010).

  Year  
€ million 2011 2010 Change
Automobiles (Fiat Group Automobiles, Chrysler, Maserati, Ferrari) 2,127 934 1,193
Components and Production Systems (Magneti Marelli, Fiat Powertrain (*), Teksid, Comau) 348 249 99
Other businesses and Eliminations (83) (71) (12)
Trading profit 2,392 1,112 1,280
Trading margin (%)                      4.0 3.1  
(*) Fiat Powertrain includes activities of the Passenger & Commercial Vehicles business line of the former FPT Powertrain Technologies.

Fiat Group Automobiles posted a full-year trading profit of €430 million (€607 million for 2010). Efficiencies in purchasing and World Class Manufacturing only partially offset volume declines for passenger cars in Europe and higher advertising costs related to new model launches, in addition to higher R&D expenditure for future products.

Chrysler reported €1,345 million in trading profit for the period June-December, with the continued positive trend in volume, mix and price from new vehicle launches driving market share gains in both the U.S. and Canada. Trading margin benefited from a low amortization charge for R&D, with current spending relating to products still in development.

Luxury and Performance brands benefited from higher volumes: Ferrari posted a trading profit of €312 million (€303 million for 2010), while Maserati was up 67% to €40 million.

Components & Production Systems reported full-year trading profit of €348 million (+40% over 2010), with Magneti Marelli nearly double at €181 million (€98 million for 2010).

Operating profit (loss)

Operating profit for 2011 was €3,336 million, including positive net unusuals of €944 million. Unusual income totaled €2,121 million, of which €2,017 million related to the fair value re-measurement of the 30% ownership interest held in Chrysler prior to the acquisition of control and of the right to receive an additional 5% ownership interest following achievement by Chrysler of the third Performance Event (which occurred in early January 2012). Unusual expense totaled €1,177 million, of which €963 million relating to Fiat excluding Chrysler (including €673 million in non-cash charges) largely attributable to the impact on Fiat’s businesses of the strategic realignment with Chrysler’s manufacturing and commercial activities, further accelerated following the increase of Fiat’s ownership interest, and to one-off charges mainly related to the realignment of certain minor activities of the Group.

Chrysler’s June-December 2011 operating profit of €1,200 million includes €220 million in unusual expenses recognized in relation to an upward revaluation or “step up” of its inventories associated with the recognition of assets acquired and liabilities assumed at fair value at the date of acquisition of control. Due to rapid inventory turnover, this amount was fully written off (recognized as a one-off non-cash charge) in June.

Profit (loss)

Net financial expenses for 2011 totaled €1,282 million. Excluding Chrysler, net financial expenses were €796 million (€400 million in 2010). Net of the result from the marking-to-market of the two Fiat stock option-related equity swaps (€108 million loss for 2011, compared to €111 million gain for 2010), net financial expense for Fiat excluding Chrysler increased by €177 million over the prior year (from €511 to €688 million), reflecting higher cost of carry in 2011 and a non-recurring gain in 2010.

Profit before taxes was €2,185 million. Excluding Chrysler, profit before taxes totaled €1,470 million (€706 million for 2010). The €764 million increase mainly reflected a €1,209 million positive difference in net unusual items, partially offset by higher net financial expense.

Income taxes totaled €534 million. Excluding Chrysler, income taxes were €464 million (€484 million for 2010) and related primarily to taxable income of companies operating outside Italy and employment-related taxes in Italy.

Net profit for the full year was €1,651 million (€222 million for 2010). Excluding Chrysler, unusuals and the mark-to-market of the two Fiat stock option-related equity swaps, the net result was break-even, compared with €231 million for 2010.

Profit attributable to owners of the parent in 2011 amounted to €1,334 million, compared to €520 million in 2010.

Equity

Equity attributable to owners of the parent Fiat S.p.A. at December 31, 2011 totaled €8,727 million compared to €11,544 million at December 31, 2010 (Fiat Group pre demerger).

Net debt

At December 31, 2011, consolidated net debt totaled €8,898 million, up €6,145 million from €2,753 million at December 31, 2010. Excluding Chrysler (consolidated from June), net debt of the Fiat Group increased €3,065 million to €5,818 million.

Net industrial debt at year end was €5.5 billion. For Fiat excluding Chrysler, net debt was €2.4 billion, up from €0.5 billion at year-end 2010. Excluding consideration paid for the acquisition of additional interests in Chrysler and negative non-cash items related to financial market conditions, net industrial debt for Fiat excluding Chrysler was around €0.7 billion, well below original guidance.

  Balance at  
€ million 12/31/2011 12/31/2010(*) Change
Debt (26,772) (20,804) (5,968)
- Asset-backed financing (710) (533) (177)
- Debt payable to Fiat Industrial   (2,865) 2,865
- Other debt (26,062) (17,406) (8,656)
Financial receivables from Fiat Industrial   5,626 (5,626)
Current financial receivables from jointly-controlled financial services companies 21 12 9
Debt, net of current financial receivables from jointly-controlled financial services companies (26,751) (15,166) (11,585)
Other financial assets (liabilities) 128 261 (133)
Cash and cash equivalents 17,725 12,152 5,573
Net (debt)/cash (8,898) (2,753) (6,145)
- Industrial Activities (5,529) (542) (4,987)
- Financial Services (3,369) (2,211) (1,158)
(*) Includes impacts of the Demerger of Fiat Industrial which took effect January 1, 2011.

Significant events

During 2011, Fiat took several major steps forward in the integration with Chrysler and increased its stake from the initial 20% established in the alliance agreement to the current 58.5%.

The three “Performance Events” established in the Amended and Restated LLC Operating Agreement were achieved in January, April and at the beginning of 2012, each resulting in Fiat receiving an additional 5% interest (15% in total) in Chrysler.

In May, concurrent with Chrysler's debt refinancing and repayment in full of all loans from the U.S. and Canadian governments, Fiat (through Fiat North America LLC, a wholly-owned subsidiary) paid $1,268 million to Chrysler for the exercise of its Incremental Equity Call Option and received 261,225 newly-issued Class A Membership Interests in Chrysler, representing 16% of the Chrysler membership interests on a fully-diluted basis.

In July, following receipt of the required regulatory approvals, Fiat purchased the 6% interest (fully diluted) held in Chrysler by the U.S. Treasury for a cash consideration of $500 million. In addition, the U.S. Treasury assigned Fiat its rights under the Equity Recapture Agreement for a cash consideration of $75 million, $15 million of which was paid to Canada in accordance with the agreement between the U.S. Treasury and Canada. Also in July, Fiat acquired the Canadian government’s 1.5% interest (fully diluted) in Chrysler for a cash consideration of $125 million.

Consistent with the objective of operational integration between Fiat and Chrysler, Fiat announced a new organizational structure for the Group Executive Council, effective from September 2011.

During the year, the Group continued its development of targeted alliances, including the extension to 2019 of the SevelSud JV in Italy (between Fiat Group Automobiles and PSA Peugeot Citroën) for the manufacture of light commercial vehicles and finalization of an agreement for Fiat Powertrain to supply its 120 hp 1.6 MultiJet II diesel engine to Suzuki for the new SX4, further extending the long-standing partnership between the two groups.

In June, Fiat Powertrain completed the acquisition of a 50% interest in VM Motori S.p.A., a company specialized in design and production of diesel engines, now jointly controlled with General Motors. The transaction gave Fiat Powertrain access to several advanced products and applications, including a newly developed V6 turbodiesel.

In October, Fiat confirmed plans to install the latest version of one of its three main architectures at the Mirafiori plant for production of a Jeep® SUV, as well as continuing production of the Alfa Romeo MiTo. In addition, a new gasoline direct injection turbo engine will be developed for Alfa Romeo and production launch is planned for early 2013 at the FMA plant in Pratola Serra, Italy.

On September 30, the company confirmed its decision to withdraw from Confindustria (the Italian employers’ federation) with effect from January 1, 2012. On December 13, the company announced the signing of a new collective agreement with the majority of trade unions, which is applicable to all Fiat employees in Italy with effect from January 1, 2012.

On October 26, the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) ratified a new national four-year labor agreement with Chrysler Group.

During 2011, Fiat Finance and Trade Ltd. (a wholly-owned subsidiary of Fiat S.p.A.) issued three bonds – under the Global Medium Term Note program guaranteed by Fiat S.p.A. – for a total of €2.5 billion. In addition, Fiat obtained €250 million in financing from the European Investment Bank (EIB) for R&D activities in Italy and a 3-year €1.95 billion syndicated credit facility.

During 2011, Standard&Poor’s, Fitch Ratings and Moody’s Investors Service, reviewed and lowered Fiat S.p.A.’s long term rating by 1 notch, currently BB for S&P and Fitch and Ba2 for Moody’s. The outlook is negative in all three cases.

On October 27, the Board of Directors of Fiat S.p.A. resolved to propose to the shareholders the conversion of the company’s preferred and savings shares into Fiat ordinary shares. If approved by the required shareholders’ meetings, the proposal will cause the conversion into ordinary shares of all the savings and preferred shares and will streamline the capital structure and simplify the governance structure of the company through the elimination of classes of securities that traded at significant discounts to the ordinary shares and with sustained low trading volumes. The Board of Directors will propose an exchange ratio for the conversion equal to 0.850 ordinary shares for each Preferred Share and to 0.875 ordinary shares for each Savings Share. Preferred shares and savings shares will retain any economic rights with respect to the 2011 financial year. The ordinary shares issued after the conversions would be eligible for dividends (to the extent declared) with respect to the 2012 financial results. The ordinary shares issued after the conversions would be eligible for dividends (to the extent declared) with respect to the 2012 financial results.

In September, for the third consecutive year, Fiat S.p.A. has been recognized as a sustainability leader with its inclusion in the Dow Jones Sustainability World and Dow Jones Sustainability Europe indexes. Fiat received the maximum score (94/100), together with BMW. Later that month, it also entered the Global 500 Carbon Disclosure Leadership Index (CDLI) and Carbon Performance Leadership Index (CPLI) established by the Carbon Disclosure Project. In December, the company was made a member of the ASPI Eurozone® index, recognized as one of the leading sustainability indexes.

Commercial Register No.64236277 Legal notes | Credits