Fiat Chrysler

 

(30.05% of share capital)

 

The key consolidated figures of the Fiat Group for the first nine months of 2013 are as follows:

  9 months
to September 30
Quarter III
€ million 2013 2012(1) 2013 2012(1)
Net revenues 62,815 62,182  20,733 20,437 
Trading profit 2,463 2,654  816 901 
EBIT 2,516 2,597  856 830 
Net profit 655 672  189 171 
Net profit/(loss) attributable to owners of the parent 44 37  (15) (30) 
(1) The figures for the first nine months and the third quarter of 2012 were restated following the adoption of IAS 19 as amended.
  Balances at
€ million 9/30/2013 12/31/2012
(1)
Total assets 85,126 82,106 
Net (debt)/ cash (11,405) (9,600) 
-  of which: Industrial Activities(debt) / cash (8,307) (6,545) 
Equity attributable to owners of the parent 6,217 6,187 
(1) The figures at December 31, 2012 were restated following the adoption of IAS 19 as amended.

Net revenues
Revenues
of the Fiat Group were €62.8 billion for the period, up 1% in nominal terms, but 5% higher at constant exchange rates.
On a regional basis, revenues in NAFTA were €32.5 billion, up 1% in nominal terms (+4% at constant exchange rates). LATAM reported revenues of €7.8 billion, a 5% decrease year-over-year (+5% at constant exchange rates). APAC increased 43% to €3.3 billion. In EMEA, revenues totaled approximately €13 billion, a 2% decrease mainly reflecting volume declines in Europe during the first half.
Luxury brands
increased revenues by 18% to €2.5 billion, driven by Maserati.
For Components, revenues totaled €5.9 billion, down 1% over the first nine months of 2012 in nominal terms (+3% at constant exchange rates).

  9 months
to September 30
Change
€ million 2013 2012
%
NAFTA (mass-market brands) 32,474 32,113 n.s
LATAM (mass-market brands) 7,753 8,166 (51)
APAC (mass-market brands) 3,290 2,307 n.s
EMEA (mass-market brands) 12,990 13,248 (1.9)
Luxury and Performance brands (Ferrari, Maserati) 2,491 2,105 18.3
Components and Production Systems (Marelli, Teksid, Comau) 5,932 5,988 (0.9)
Other 685 712 (3.8)
Eliminations and adjustments (2,800) (2,457) 14.0
Net revenues 62,815 62,182 1.0

Trading profit
Trading profit
totaled €2,463 million for the nine months to September 2013, a €191 million decrease over the same period in 2012 (IAS 19 restated), which included approximately €140 million in negative currency translation impacts. NAFTA reported a trading profit of €1,600 million, a €288 million decrease over 2012 (IAS 19 restated) driven primarily by higher industrial costs related to product launches, in addition to negative currency translation impacts. LATAM posted a trading profit of €575 million, down €239 million; net of currency translation effects (approximately -€70 million), the decrease was mainly attributable to an unfavorable production mix and net input cost inflation. APAC increased 38% to €295 million. In EMEA, losses were reduced by €163 million or 28% to €420 million due to continued cost discipline and some improvement in product mix. For Luxury brands, trading profit increased by 18% to €312 million and Components were up €12 million to €131 million.

EBIT
EBIT
was €2,516 million (€2,597 million for the nine months to September 2012, IAS 19 restated). For mass-market brands by region, NAFTA reported EBIT of €1,669 million, a 14% decrease over 2012 (IAS 19 restated) mainly reflecting lower trading profit and higher positive net unusual items. LATAM posted EBIT of €520 million (€783 million for 2012), reflecting the trading profit performance and net unusual charges related to devaluation of the Venezuelan bolivar relative to the U.S. dollar. APAC increased by 23% to €270 million. During the period, EMEA reduced losses by €269 million to €304 million (including €1 million in unusual charges, compared to €114 million in unusual charges in 2012 relating mainly to the writedown of the investment in the SevelNord JV). EBIT for Luxury brands totaled €312 million (€264 million for the nine months to September 2012) and for Components €132 million (€118 million for 2012).

An analysis follows:

  9 months
to September 30
     Change
€ million 2013 2012
(1)  
NAFTA (mass-market brands) 1,669 1,930  (261)
LATAM (mass-market brands) 520 783  (263)
APAC (mass-market brands) 270 219  51
EMEA (mass-market brands) (304) (573)  269
Luxury and Performance brands (Ferrari, Maserati) 312 264  48
Components and Production Systems (Marelli, Teksid, Comau) 132 118  14
Other (101) (109)  8
Eliminations and adjustments 18 (35)  53
EBIT 2,516 2,597  (81)
(1) Restated for adoption of IAS 19: EBIT reduced by €159 million for NAFTA, €3 million for Components and €11 million for Eliminations and Adjustments.

Profit (loss) for the period
Net financial expense
totaled €1,434 million, an increase of €19 million over the same period in 2012. Excluding the marking-to-market of the Fiat stock option-related equity swaps (gains of €60 million for the nine months to September 2013 and €30 million for the same period in 2012), net financial expense increased by €49 million, mainly due to a higher average debt level.

Profit before taxes was €1,082 million (€1,182 million for the nine months to September 2012, IAS 19 restated). The €100 million decrease reflected the €81 million reduction in EBIT and higher net financial expense.

Income taxes totaled €427 million. Excluding Chrysler, income taxes were €260 million and related primarily to the taxable income of companies operating outside Italy and employment-related taxes in Italy.

Net profit was €655 million for the nine months to September 2013 (€672 million for the same period of 2012, IAS 19 restated).

Profit attributable to owners of the parent was €44 million (compared to €37 million for 2012). For Fiat excluding Chrysler, the net loss was reduced by €79 million over 2012 to €729 million.

Equity
Equity attributable to owners of the parent
at September 30, 2013 amounted to €6,217 million compared to €6,187 million at December 31, 2012.

Net debt
Net industrial debt
at September 30, 2013 was €8.3 billion, compared to €6.5 billion at year-end 2012. Excluding Chrysler, absorption for Fiat was €2.1 billion, €0.9 billion better than last year. Net industrial debt for Chrysler decreased by €0.3 billion, less than the prior year reduction as a result of negative working capital performance mainly connected to the new Jeep Cherokee shipment hold at the end of the third quarter. Total capital expenditure for the Group was €5.3 billion (in line with the first nine months of 2012), of which €2.6 billion related to Fiat excluding Chrysler (€2.1 billion in the nine months to September 2012).

  Balances at  
€ million 9/30/2013 12/31/2012 Change
Cash maturities (28,027) (26,727) (1,300)
- Bank debt (8,377) (8,189) (188)
- Capital market (1) (13,818) (12,361) (1,457)
- Other debt (2) (5,832) (6,177) 345
Asset-backed financing (3) (395) (449) 54
Accruals and other adjustments (468) (655) 187
Gross debt (28,890) (27,831) (1,059)
Cash and marketable securities
17,076 17,913 (837)
Derivatives Assets / Liabilities 409 318 91
(Net debt) (11,405) (9,600) (1,805)
Industrial activities (8,307) (6,545) (1,762)
Financial Services (3,098) (3,055) (43)
(1) Includes bonds and other securities issued in the financial markets. (2) Includes VEBA Trust Notes, HCT Notes, IFRIC 4 and other non-bank financing. (3) Advances on sale of receivable and securitization on book.

Significant events in the third quarter and subsequently
On July 8, 2013, Fiat notified the United Auto Workers’ Retiree Medical Benefits Trust (“VEBA”) of the exercise of its option to purchase a third tranche of the interest held by VEBA in Chrysler Group LLC, representing approximately 3.3% of Chrysler’s outstanding equity. Fiat’s calculation of the net purchase consideration payable for that tranche was US$ 254.7 million. Fiat had exercised its options to purchase a first tranche of VEBA’s equity interest in Chrysler on July 3, 2012 and a second tranche on January 3, 2013 – each representing approximately 3.3% of Chrysler’s outstanding equity. On September 26, 2012, following exercise of the first tranche, Fiat sought a declaratory judgment in the Delaware Chancery Court (“the Court”) to confirm the price to be paid. On July 30, 2013, the Court granted Fiat’s motion for a judgment on the pleadings with respect to two issues in dispute. The Court also denied, in its entirety, the VEBA’s cross-motion for judgment on the pleadings. In the event that these transactions are completed as contemplated, Fiat will own 68.49% of the ownership interest in Chrysler Group and the VEBA Trust will own the remaining 31.51%.

On July 9, 2013, the CEO of Fiat presented plans for future activities at the plant of Sevel (a 50/50 JV between Fiat Group and PSA Group for the production of Light Commercial Vehicles) located in Atessa, Italy, where the Ducato is currently produced. Approximately €700 million is to be invested in the facility over 5 years. Together with application of World Class Manufacturing standards, this will enable Sevel to further improve its standing as one of the most advanced automotive production facilities in the world.

On July 12, 2013, Fiat issued an €850 million bond (fixed coupon 6.75%, due October 2019). The Notes – issued by Fiat Finance and Trade Ltd. S.A. and guaranteed by Fiat S.p.A under the GMTN Program – were rated “B1” by Moody’s, “BB-” by Standard & Poor’s and “BB-” by Fitch. On September 17, 2013 following re-opening of the transaction, a further €400 million in notes were issued, increasing the total principal amount of the bond to €1.25 billion.

On July 30, 2013, Fiat Group Automobiles (“FGA”), Crédit Agricole (“CASA”) and Crédit Agricole Consumer Finance (“CACF”) reached an agreement to extend the 50/50 Joint Venture in FGA Capital (“FGAC”) up to December 31, 2021. Extension of the alliance is intended by the partners to ensure the long-term sustainability of FGAC, a captive finance company that manages FGA’s main activities in retail auto financing, dealership financing, long-term car rental and fleet management in 14 European countries. Those activities are well diversified geographically across the main European markets. FGAC will continue to benefit from the financial support of Crédit Agricole Group, while strengthening its position as an active player in the securitization and debt markets

On August 20, 2013, Fiat and Itaú Unibanco renewed the commercial cooperation agreement in place in Brazil since 2003 for a further 10 years. The agreement assures Fiat’s customers and dealer network a strong financial partner that offers a full spectrum of competitive financing solutions. In return, Itaú Unibanco is assured exclusivity for Fiat’s new vehicle financing in promotional campaigns and exclusive use of the Fiat brand in activities related to vehicle financing.

On September 4, 2013, there was a meeting in Rome with the Italian trade unions CISL, UIL, FIM, UILM, FISMIC, UGL, UGLM and the Associazione Quadri e Capi – all of which are signatories to Fiat’s Collective Labor Agreement. Fiat took the occasion to reiterate how pivotal the agreement has been in restoring production quality and efficiency at Fiat Group plants in Italy. At the meeting, the trade unions confirmed their commitment to protecting and strengthening the contractual relationship, with full awareness of its vital importance to Fiat’s continued commitment to its industrial presence in Italy. On the basis of this renewed mutual commitment, Fiat announced that the Group would immediately undertake the investment necessary to ensure future production and jobs at the Mirafiori plant that is intended will have a key role in development of the premium segment manufacturing activities in Turin.

On September 18, 2013, Fitch Ratings confirmed its rating of “BB-” on Fiat S.p.A.’s long-term debt. The short-term rating of “B” was also confirmed. The outlook remains negative.

On September 23, 2013, Chrysler Group LLC filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed initial public offering of common stock. The common stock to be sold in the offering are proposed to be sold by the UAW Retiree Medical Benefits Trust (the "VEBA Trust"), which has exercised demand registration rights under a shareholders' agreement to which Chrysler Group LLC is a party. The VEBA Trust will receive all of the net proceeds from the proposed offering. The number of shares to be offered and the price range for the offering have not yet been determined. A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission (SEC) but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

On October 28, 2013, Fiat announced that, following receipt of regulatory approvals, Fiat Group Automobiles’ completed the acquisition of the remaining 50% stake in VM Motori S.p.A. held by General Motors. The purchase consideration was €34.1 million. Fiat acquired an initial 50% stake in VM in 2010 and now has 100% control.

Commercial Register No.64236277 Legal notes | Credits