Fiat Chrysler

(30,04% of share capital)

 

 

 

The main consolidated figures of the Fiat Group for the first half of 2014 are as follows:

  Half I  
€ million 2014 2013(1) Change
Net revenues 45,453 41,988  3,465
EBITDA 3,590 3,906  (316)
EBIT 1,231 1,680  (449)
Profit/(loss) for the period 24 466  (442)
Profit/(loss) attributable to owners of the parent (14) 59  (73)
(1) Adjusted for the retrospective application of IFRS 11, For the six months ended June 30, 2013, Net revenues -€94 million, EBIT +€20 million, Profit for the period unchanged.
 At 
€ million 6/30/2014          12/31/2013(2)
Total assets 90,769 87,214 
Net debt (13,112) (10,158) 
- of which: Net industrial debt (9,704) (7,014) 
Equity attributable to owners of the parent 9,542 8,326 
(2) Adjusted for the retrospective application of IFRS 11.

Net revenues

Net revenues of the Fiat Group for the six months ended June 30, 2014 were €45.5 billion, an increase of 8% (+13% on a constant currency basis).

As for revenues by segment, NAFTA net revenues for the six months ended June 30, 2014 were €24.0 billion, an increase of 12% (+16% on a constant currency basis), thanks to an increase in shipments of 12%. LATAM net revenues for the six months ended June 30, 2014 were €4.2 billion, a decrease of 22% from the same period of 2013 (-10% on a constant currency basis) with a 16% decrease in vehicle shipments compared to the exceptionally strong performance in the six months of 2013. APAC net revenues for the six months ended June 30, 2014 were €3.0 billion, up 43% thanks to an increase in shipments compared to the corresponding period of 2013. EMEA net revenues for the six months ended June 30, 2014 were €9 billion, in line with the first six months of 2013.

Luxury Brands net revenues grew 67% to €2.6 billion, driven by the strong performance of Maserati which tripled revenues to €1.4 billion.

Components net revenues for the six months ended June 30, 2014 were €4.1 billion, in line with the first six months of 2013.

  Half I Change
€ million 2014 (1)  2013 (2)  %
NAFTA (mass-market brands) 23,990   21,509   11.5
LATAM (mass-market brands) 4,153   5,307   (21.7)
APAC (mass-market brands) 3,019   2,117   42.6
EMEA (mass-market brands) 8,951   9,086   (1.5)
Luxury Brands (Ferrari, Maserati) 2,613   1,569   66.5
Components (Magneti Marelli, Teksid, Comau) 4,154   4,055   2.4
Other 402   469   (14.3)
Eliminations and adjustments (1,829)   (2,124)   (13.9)
Net revenues 45,453   41,988   8.3
(1) Includes the unusual non-cash and non-taxable gain of €223 million recognized in the first quarter of 2014, resulting from the fair value of the options representing approximately 10% of Chrysler equity interest which was a portion of the 41.5% stake that Fiat acquired from the VEBA Trust on January 21, 2014. (2) Adjusted for the retrospective application of IFRS 11. Revenues: Fiat Group -€94 million, APAC +€32 million, EMEA -€44 million, Eliminations and adjustments -€82 million.

EBIT

EBIT for the six months ended June 30, 2014 was €1,231 million, a decrease of €449 million, or -27% (-22.0% on a constant currency basis), from €1,680 million for the six months ended June 30, 2013. The unusual items had a negative impact of €346 million, primarily reflecting the €495 million charge in the first quarter of 2014 following the agreement entered into by the UAW and Chrysler on January 21, 2014, partially offset by the non-taxable gain of €223 million on the re-measurement to fair value of the previously exercised options on approximately 10% of Chrysler’s membership interest in connection with acquisition of the remaining ownership interest. Excluding unusual items, the reduction in EBIT is €103 million.

NAFTA EBIT loss for the six months ended June 30, 2014 was €481 million, a decrease of €652 million due to an increase of €563 million in other unusual expenses, primarily reflecting the €495 million charge in the first quarter of 2014 connected with the UAW. Excluding unusual expenses NAFTA EBIT falls to €89 million (€44 million at constant exchange rates) primarily attributable to favorable volume/mix impact, favorable net pricing (to cover vehicle content enhancements), substantially offset by increased incentives spending on certain vehicles in portfolio, higher depreciation and amortization and advertising and unfavorable foreign currency translation impact.

LATAM EBIT for the six months ended June 30, 2014 was €13 million, from €351 million for the six months ended June 30, 2013. The decrease was primarily attributable to unfavorable volume impact, an increase in industrial costs not fully compensated by positive pricing, difficult market conditions in Venezuela and the impact of unfavorable foreign currency translation, in addition to the increase of €35 million in net other unusual expenses. APAC EBIT for the six months ended June 30, 2014 was €241 million, an increase from €185 million for the six months ended June 30, 2013 primarily attributable to positive volume/mix impact partially offset by an increase in selling and advertising costs to support the growth of APAC operations in the region and the unfavorable currency impact. EMEA EBIT loss for the six months ended June 30, 2014 was €78 million, an improvement from an EBIT loss of €176 million for the six months ended June 30, 2013. The decrease in EMEA EBIT loss was driven by industrial and purchasing efficiencies, which were partially offset by the growing price pressure and higher advertising costs; net unusual items decreased by €7 million.

Luxury Brands EBIT forthe six monthsended June 30, 2014 was €305 million (€181 million for the six months ended June 30, 2013) with Maserati reporting an increase from €5 million to €120 million, driven by the growth in shipments.

Components EBIT grew from €95 million to €102 million.

 Half IChange
€ million 2014(1) 2013 (2)  %
NAFTA (mass-market brands) 481  1,133   (652.0)
LATAM (mass-market brands) 13  351   (338.0)
APAC (mass-market brands) 241  185   56.0
EMEA (mass-market brands) (78)  (176)   98.0
Luxury Brands (Ferrari, Maserati) 305  181   124.0
Components (Magneti Marelli, Teksid, Comau) 102  95   7.0
Other  (36)  (78)   42.0
Eliminations and adjustments(1) 203  (11)   214.0
EBIT 1,231  1,680   (449.0)
(1) Includes the unusual non-cash and non-taxable gain of €223 million recognized in the first quarter of 2014, resulting from the fair value of the options representing approximately 10% of Chrysler equity interest which was a portion of the 41.5% stake that Fiat acquired from the VEBA Trust on January 21, 2014. (2) Adjusted for the retrospective application of IFRS 11. EBIT: Group +€20 million, APAC +€11 million, EMEA -€9 million.

Net financial expenses for the six months ended June 30, 2014 were €999 million, an increase of €39 million compared to the first six months of 2013. Excluding the Fiat stock option-related equity swaps, which expired at the end of 2013, (a gain of €36 million recognized in the six months ended June 30, 2013), net financial expenses were substantially unchanged with benefits from the recent Chrysler refinancing transactions being offset by higher average debt levels and negative exchange rate effects.

Profit before taxes was €232 million (€720 million in the first six months of 2013). The decrease of €488 million reflects the reduction in EBIT of €449 million (of which €346 million attributable to unusual items) and the increase of €39 million in net financial expenses.

Tax expenses for the six months ended June 30, 2014 were €208 million (€254 million for the first six months of 2013). At December 31, 2013, previously unrecognized deferred tax assets of €1,500 million were recognized, principally related to tax loss carry forwards and temporary differences in the NAFTA operations. In 2014, the utilization of a part of these temporary differences resulted in higher deferred tax expense as compared to the prior year, that were more than offset by the recognition of a €125 million deferred tax benefit during the three months ended March 31, 2014, which did not occur in the three months ended March 31, 2013.

Net profit for the period was €24 million (€466 million for the first six months of 2013). Excluding unusual items, net profit was €285 million, down €216 million compared to the first six months of 2013.

Loss attributable to owners of the parent for the first six months of 2014 was €14 million compared to a profit of €59 million for the first six months of 2013. 

Equity

Equity attributable to owners of the parent of Fiat S.p.A. amounted to €9,542 at June 30, 2014 million compared to €8,326 million at December 31, 2013.

Net debt

At June 30, 2014, consolidated net debt is €13.1 billion, up €3 billion compared to the end of 2013. Net industrial debt at June 30, 2014 is €9.7 billion, an increase from €7 billion at December 31, 2013. The increase of approximately €3 billion was principally driven by the acquisition of the approximately 41.5% interest in Chrysler held by the VEBA Trust for €2.7 billion, investments in industrial activities for €3.2 billion, unfavorable currency translation effects for €0.2 billion, net of cash flows from industrial operating activities of €3.7 billion.

 At  
€ million30/06/201412/31/2013(1)Change
Debt (30,856) (28,899)  (1,957)
Asset-backed financing (545) (756)  211
Accrued interest and other adjustments (503) (601)  98
Gross debt (31,904) (30,256)  (1,648)
Cash and cash equivalents and current securities 18,719 19,702  (983)
Other financial assets/(liabilities) 73 396  (323)
Net debt (13,112) (10,158)  (2,954)
Industrial Activities (9,704) (7,014)  (2,690)
Financial Services (3,408) (3,144)  (264)
(1) Adjusted for retrospective application of IFRS 11 (+€365 million, fully attributable to Industrial Activities).

Significant events in the first half of 2014 and subsequent events

On January 1, 2014, the Fiat Group announced an agreement with the VEBA Trust, under which the wholly-owned subsidiary Fiat North America LLC (FNA) would acquire the remaining approximately 41.5% ownership interest in Chrysler held by the VEBA Trust. The transaction closed on January 21, 2014. The consideration for the acquisition consisted of:

  • a special distribution paid by Chrysler to its members on January 21, 2014 of $1.9 billion (FNA’s portion of the special distribution was assigned to the VEBA Trust as part of the purchase consideration), and
  • a cash payment by FNA to the VEBA Trust of $1.75 billion.

On January 21, 2014, Chrysler and the International Union, United Automobile, Aerospace and Agricultural (“UAW”) entered into a Memorandum of Understanding, to supplement Chrysler’s existing collective bargaining agreement, in which the UAW made commitments to continue to support Chrysler’s industrial operations, continued roll-out of the WCM programs and actively assist in the achievement of Chrysler’s long-term business plan. In consideration of these commitments, Chrysler agreed to make payments to the VEBA Trust totaling $700 million to be paid in four equal annual installments. The initial payment of $175 million was made on January 21, 2014 and additional payments will be payable on each of the next three anniversaries of the initial payment.

On January 29, 2014, the Board of Directors of Fiat S.p.A. (Fiat) approved a corporate reorganization and the formation of Fiat Chrysler Automobiles N.V. (FCA) as a fully-integrated global automaker.

Following the acquisition of the VEBA Trust’s equity interests in Chrysler, Chrysler repaid all amounts outstanding including accrued and unpaid interest of approximately $5.0 billion (€3.6 billion) under the VEBA Trust Note on February 7, 2014.

On February 11, 2014, Moody’s Investors Service lowered Fiat S.p.A.’s Corporate Family Rating from ‘Ba3’ to ‘B1’ and consequently, in accordance with their methodology, ratings on the notes issued by Fiat Finance & Trade Ltd. S.A. and Fiat Finance North America Inc. were also lowered from ‘B1’ to ‘B2’.

On March 31, 2014, the shareholders of Fiat S.p.A. approved the 2013 Financial Statements and the motion for allocation of 2013 net result. On the same date, shareholders also approved the Compensation Policy, pursuant to Article 123-ter of Legislative Decree 58/98. Authorization was also renewed for the purchase and disposal of own shares, including through subsidiaries, and the previous authorization given on April 9, 2013 was revoked. The authorization provides for the purchase of a maximum number of shares not to exceed the legally established percentage of share capital or an aggregate value of €1.2 billion, inclusive of the €259 million in Fiat shares already held.

On April 19, 2014, Fiat Group Automobiles S.p.A., Chrysler Group International LLC and Guangzhou Automobile Group Co., Ltd. (GAC Group) announced an agreement to expand their joint venture partnership. Under the agreement, the joint venture, GAC Fiat, will begin localized production of three new Jeep vehicles for the Chinese market, expanding the portfolio of Jeep SUVs currently available to Chinese consumers as imports. Production is expected to begin by late 2015.

On May 6, 2014, the CEO of Fiat along with members of the executive management of the Group presented the Group’s 2014-2018 Business Plan to financial analysts and institutional investors in Auburn Hills (Michigan, U.S.A.).

On July 3, 2014, Fiat S.p.A. announced that, in preparing the Interim Financial Information as of March 31, 2014 to be included in the Registration Statement, it had revised its accounting for the acquisition of the 41.5% equity interest in Chrysler which Fiat acquired from the VEBA Trust on January 21, 2014 and that the Board of Directors of Fiat had approved amended 2014 first quarter results to reflect such revised accounting. The revisions resulted in an unusual non-cash and non-taxable gain of €223 million, with no impact on the results of the reportable segments or on the Group Consolidated Equity. The revised net loss for the three months ended March 31, 2014 was €173 million, as compared with the previously reported €319 million.

On July 22, 2014, Renault and Fiat signed an agreement under which Renault will supply Fiat with a light commercial vehicle based on a Renault platform. The styling of the Fiat vehicle will be developed by Fiat and will feature unique and distinctive elements on the model, branded Fiat Professional. The vehicle will be manufactured by Renault in France starting from the second quarter of 2016.

On August 1, 2014, the shareholders of Fiat S.p.A. approved the cross-border merger of Fiat S.p.A. with and into Fiat Investments N.V., a wholly-owned subsidiary incorporated in the Netherlands. Assuming all other conditions precedent in the Merger Plan are satisfied, Fiat will be merged into Fiat Investments which, upon completion of the transaction, will be renamed Fiat Chrysler Automobiles (“FCA”) N.V.

If the Merger is completed, Fiat S.p.A. shareholders will receive one FCA common share for each Fiat S.p.A. ordinary share they hold. FCA’s common shares will be listed on the New York Stock Exchange and are expected to be listed on the Mercato Telematico Azionario managed by Borsa Italiana. If the Merger is approved Fiat shareholders who did not vote in favor of the Merger will be entitled to exercise the right of withdrawal provided for under Article 2437-quater of the Italian Civil Code for a period of fifteen (15) days following registration of the resolution approving the Merger with the Turin Companies Register. The redemption price payable to Fiat shareholders exercising the right of withdrawal will be €7.727 per share. The right of withdrawal is subject to completion of the Merger, which is in turn subject to certain conditions precedent set out in the merger plan, including the condition that the aggregate cash amount payable to shareholders exercising withdrawal rights, pursuant to Article 2437-quater of the Italian Civil Code, and to creditors exercising opposition rights does not exceed €500 million.

 

Commercial Register No.64236277 Legal notes | Credits