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 the Fiat Group for the first quarter of 2012 are as follows:

New segment information

As a result of the acquisition of the majority ownership of Chrysler Group and consistent with the objective of enhancing the operational integration of Fiat and Chrysler, as already announced, Fiat implemented significant organizational changes that became effective September 1, 2011.

The new organization for the Mass-market Brands is based on four Operating Regions (the “Regions”) that deal with the development, production and sale of “mass-market brand” passenger cars, light commercial vehicles and related parts and services in specific geographical areas: NAFTA (U.S., Canada and Mexico), LATAM (South and Central America, excluding Mexico), APAC (Asia and Pacific countries) and EMEA (Europe, the Middle East and Africa). In addition, there are two further Operating Segments, one which designs, manufactures and sells luxury and performance cars (Ferrari and Maserati) and the other that produces and sells components and production systems for the automotive industry (Magneti Marelli, Teksid and Comau). Both segments operate on a worldwide basis.

Based on the new Group structure, beginning with the first quarter of 2012, activities of the mass-market brands, previously reported under the sectors Fiat Group Automobiles, Fiat Powertrain and Chrysler, are now attributed to the four Regions described above. The Luxury and Performance Brands, as well as the Components and Production Systems sectors are reported under two groupings based on their similarities and relative size. The figures for the first quarter of 2011, presented for comparative purposes, have been restated accordingly.

Net revenues

Group revenues were €20.2 billion for the quarter. Excluding Chrysler, net revenues were €8.7 billion, a 5.7% decrease compared to the first quarter of 2011, mainly reflecting volume declines in Europe, where trading conditions continued to remain weak for both passenger cars and light commercial vehicles, and in Italy in particular, where production and shipments for Fiat were also affected by protracted car hauler strikes. For Luxury and Performance Brands, revenues increased 11.5% to €0.7 billion and for Components they were stable at €2.0 billion.

Trading profit/(loss) 

Trading profit for the first quarter of 2012 was €866 million. Excluding Chrysler, trading result was break-even, compared to a profit of €251 million in the first quarter of 2011. The decline mainly reflects the volume reduction in Europe and increased pricing pressure in Latin America together with launch costs for the new Grand Siena and Chrysler products. Those impacts were only partially compensated for by industrial efficiencies, further realization of group synergies and cost containment actions. For Luxury and Performance Brands, trading profit increased 14.5% to €71 million and for Components it was in line with the prior year.

EBIT

EBIT (Earnings Before Interest and Taxes, defined astrading result plus unusuals and net result from investments) was €895 million. Excluding Chrysler, EBIT was €12 million. For mass-market brands, North America (NAFTA) earnings increased over 80% (on a pro-forma basis, constructed by including Chrysler results as if consolidated from January 1, 2011 ) to €681 million, driven by strong volume growth, and Asia Pacific (APAC) earnings grew 143% to €85 million, with both volume and margin improvements. These improvements more than offset a worsening of losses in Europe, Middle East and Africa from -€66 million (on a pro-forma basis) to -€170 million – driven by volume declines resulting from the continuing market contraction and from the car hauler strike in Italy – and a reduction in Latin America earnings from €306 million (on a pro-forma basis) to €235 million – driven by pricing pressure from imports by other carmakers, as pre-IPI tax rate increase vehicle stocks were sold-down, and launch costs for the Grand Siena and Chrysler products.

Profit (loss) for the period

Net financial expense totaled €375 million. Excluding Chrysler, net financial expense was €166 million. Net of the result from the marking-to-market of the Fiat stock option-related equity swaps (gain of €38 million in first quarter of 2012 and €23 million in the first quarter of 2011), net financial expense for Fiat excluding Chrysler increased by €43 million over the first quarter of 2011 (from €161 million to €204 million), reflecting higher debt levels.

Profit before taxes was €520 million. Excluding Chrysler, the result before taxes was a loss of €154 million, with a worsening of €307 million over the first quarter of 2011 due to a €279 million reduction in EBIT and a €28 million increase in net financial charges.

Income taxes totaled €141 million. Excluding Chrysler, income taxes were €119 million and related primarily to taxable income of companies operating outside Italy and employment-related taxes in Italy.

Net profit was €379 million for the quarter, with Fiat excluding Chrysler reporting a loss of €273 million.

Profit attributable to the owners of the parent for the first quarter of 2012 was €104 million, increasing by €75 million compared to €29 million for the first quarter of 2011. The strong profit difference between Chrysler and Fiat excluding Chrysler for the quarter justifies the margin between net profit and the amount attributable to owners of the parent.

Equity

Equity attributable to owners of the parent of Fiat S.p.A. at March 31, 2012 amounted to €8,929 million compared to €8,727 million at December 31, 2011.

Net debt

At March 31, 2012, consolidated net debt totaled €8,969 million, substantially in line (+€71 million) with the level reported at December 31, 2011. For Fiat excluding Chrysler, net debt was €1.2 billion higher, essentially due to working capital absorption of approximately €1 billion.

Significant events in the first quarter

In January 2012, Fiat announced that the “Ecological Event” (3rd Performance Event established in the Amended and Restated LLC Operating Agreement) had been achieved, leading to a further 5% increase of its interest in Chrysler. Fiat currently has a 58.5% ownership interest in Chrysler. The VEBA Trust owns the remaining 41.5%.

On February 1, 2012 during a meeting with the trade unions that signed the company specific collective labor agreement, Fiat’s CEO confirmed that investments for the Mirafiori plant in Turin would go ahead. Plans call for production of at least two new models for the export market, with production to reach 280,000 vehicles per year. Investment is to commence in the second quarter of 2012 and retooling of the plant will be completed during 2013. Production of the first model (Fiat brand) is scheduled to begin in December 2013 and the second model (Jeep brand) is slated for production beginning in the second quarter of 2014. Fiat also confirmed that Mirafiori would continue production of the Alfa Romeo MiTo, for which a refresh is planned, as well as the Lancia Musa for a limited time, on the basis of market demand.

Fiat completed two bond issues during the quarter, one on March 7, 2012 for CHF 425 million (fixed coupon 5.00%, due September 2015) and another on March 23rd for €850 million (fixed coupon 7.00%, due March 2017). The notes, issued by Fiat Finance and Trade Ltd. S.A. – a wholly-owned Group subsidiary – and guaranteed by Fiat S.p.A. under the Global Medium Term Note program, have been rated Ba3 by Moody’s, BB by Standard & Poor’s and BB by Fitch.