Fiat Chrysler
(30.04% of share capital)

 

 

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

  QI  
€ million 2014 2013 (1) Change
Net revenues 22,125 19,707  2,418
Trading profit 622 631  (9)
EBIT 270 607  (337)
Profit/(loss) for the period (173) 31  (204)
Profit/(loss) attributable to owners of the parent (189) (83)  (106)
(1) Adjusted for the retrospective application of IFRS 11. Revenues: -€50 million, Trading profit: +€13 million, EBIT: +€4 million, Net profit unchanged.
€ million 3.31.2014   12.31.2013   
Total assets 87,523   87,214  
Net debt (13,248)   (10,158)  
- of which: Net industrial debt (9,996)   (7,014) (2)
Equity attributable to owners of the parent 9,386   8,326  
(2) At December 31, 2013, adjusted for the retrospective application of IFRS 11. Net Industrial Debt: +€365 million.

Net revenues

Revenues for the first quarter of 2014 were €22.1 billion, an increase of €2.4 billion, or 12% (+17% at constant exchange rates), from €19.7 billion for the first quarter of 2013. The year-over-year improvement was primarily attributable to increases of €1.7 billion in NAFTA (+17% or 22% at constant exchange rates) and €0.5 billion in APAC (+52% or 60% at constant exchange rates), both largely driven by higher shipment volumes. In addition, Luxury Brands revenues were up €0.5 billion (+76%), driven by a six-fold increase in shipments over the first quarter of 2013 for Maserati as a result of the success of the new models launched in 2013. These increases were partly offset by a €0.5 billion reduction for LATAM (-20%), largely attributable to the unfavorable currency translation effect related to the weakening of the Brazilian real against the Euro (the reduction was -5% at constant exchange rates), and an 11% decrease in vehicle shipments. EMEA revenues were in line with the first quarter of 2013. Components revenues were up €145 million (+7% or +14% at constant exchange rates), driven by Magneti Marelli and Comau.

  QI Change
€ million 2014   2013
(1)
%
NAFTA (mass-market brands) 11,732   10,012   17
LATAM (mass-market brands) 1,965   2,468   -20
APAC (mass-market brands) 1,497   982   52
EMEA (mass-market brands) 4,341   4,327   0
Luxury Brands (Ferrari, Maserati) 1,207   684   76
Components (Magneti Marelli, Teksid, Comau) 2,081   1,936   7
Other
201   227   -11
Eliminations and adjustments (899)   (929)   -3
Net revenues 22,125   19,707   12
(1) Adjusted for the retrospective application of IFRS 11. Revenues: Group -€50 million, APAC +€14 million, EMEA -€23 million, Eliminations and adjustments -€41 million.

Trading profit

Trading profit totaled €622 million for the quarter, down 1% over the first quarter of 2013, but 6% better at constant exchange rates. For NAFTA, trading profit was down 4% to €380 million (€397 million for the first quarter of 2013). Net of exchange rate impacts, increased volumes were offset by higher depreciation and amortization, R&D expenses and costs associated with recent recall campaigns. LATAM decreased by €142 million to €44 million, reflecting input cost inflation, lower volumes, poor business conditions in Venezuela and negative currency translation impacts. APAC posted a trading profit of €146 million, an improvement of €41 million over the same period of the prior year, with the impact of volume increases more than offsetting higher industrial and SG&A costs to support the expansion in the region. In EMEA, losses were reduced by €40 million over the first quarter of the prior year to €110 million, as a result of higher volumes (+6%), better product mix and industrial efficiencies. For Luxury Brands, trading profit nearly doubled to €139 million, with Ferrari stable at €80 million and Maserati improving to a €59 million profit, driven by strong volumes, compared to a €4 million loss in the first quarter of 2013. For Components, first quarter 2014 trading profit was up €8 million over the first quarter of 2013 to €41 million.

EBIT

EBIT totaled €270 million for the quarter compared to €607 million for the first quarter of 2013. For mass-market brands by region, NAFTA reported negative EBIT of €117 million, as compared to a positive €400 million in the first quarter of 2013; the €517 million decrease reflects lower trading profit and the €495 million expense recognized in connection with the execution of the UAW Memorandum of Understanding entered into by Chrysler on January 21. LATAM posted a negative EBIT of €49 million (a positive €127 million in the first quarter of 2013), as a result of lower trading profit performance and higher unusual charges mainly related to the devaluation of the Venezuelan bolivar (as a result of using the ‘SICAD I’ exchange rate based on periodic auctions). APAC increased 39% to €135 million, largely reflecting higher trading profit. EMEA reduced losses by €35 million to €72 million, mainly due to the improvement in trading performance. Luxury Brands posted EBIT of €139 million (€76 million for the first quarter of 2013), with the increase entirely attributable to the trading profit improvement. For Components, EBIT was €42 million compared to €35 million for the first quarter of 2013.

  QI Change
€ million 2014   2013
(1)
 
NAFTA (mass-market brands) (117)   400   (517)
LATAM (mass-market brands) (49)   127   (176)
APAC (mass-market brands) 135   97   38
EMEA (mass-market brands) (72)   (107)   35
Luxury Brands (Ferrari. Maserati) 139   76   63
Components (Magneti Marelli, Teksid, Comau) 42   35   7
Other (13)   (27)   14
Eliminations and adjustments 205   6   199
EBIT 270   607   (337)
(1) Adjusted for the retrospective application of IFRS 11. EBIT: Group +€4 million, EMEA +€4 million, Eliminations and adjustments +€1 million.

Profit/(loss) for the period

Net financial expense totaled €493 million, an increase of €50 million over the first quarter of 2013. Excluding the impact of the Fiat stock option-related equity swaps which expired in the fourth quarter of 2013 (gain of €15 million in the first quarter of 2013), there was a €35 million increase due to the higher average debt level and exchange rate effects.

In the first quarter of 2014 there was a loss before taxes of €223 million, compared to a profit of €164 million for the first quarter of 2013. The €387 million decrease reflected the €337 million reduction in EBIT and a €50 million increase in net financial charges.

Income taxes were a positive €50 million, as compared to a €133 million charge in the first quarter of 2013, mainly reflecting the change in the result before taxes.

In the first quarter of 2014, there was a net loss of €173 million, compared to a net profit of €31 million in the first quarter of 2013. There was a loss of €189 million attributable to owners of the parent (compared to a €83 million loss for the first quarter of 2013). Excluding unusual items, there was a net profit of €87 million, a €9 million decrease over the first quarter of 2013.

Equity

Equity attributable to owners of the parent of Fiat S.p.A. amounted to €9,386 million at March 31, 2014 compared to €8,326 million at December 31, 2013.

Net debt

At March 31, 2014 consolidated net debt was €13,248 million, up €3,090 million from the beginning of the year. Net industrial debt at March 31, 2014 closed at €10 billion, up from €7 billion at year-end 2013, adjusted for the retrospective application of IFRS 11 (which had an approximate €0.4 billion impact). There was an increase in net industrial debt of €0.3 billion for the quarter, net of the payment for the ownership interest in Chrysler, compared to an increase of €0.5 billion in the first quarter of 2013. Cash flows from operations almost fully covered capital expenditure for the period.

€ million 3.31.2014 12.31.2013
(1) Change
Debt (30,188) (28,899)  (1,289)
Asset-backed financing (2) (610) (756)  146
Accruals and Other adjustments (3) (523) (601)  78
Gross debt (31,321) (30,256)  (1,065)
Cash and marketable securities 17,742 19,702  (1,960)
Derivative Assets/(Liabilities) 331 396  (65)
Net debt (13,248) (10,158)  (3,090)
Industrial Activities (9,996) (7,014)  (2,982)
Financial Services(3,252)(3,144)  (108)
(1) Adjusted for the retrospective application of IFRS 11 (+€365 million - fully attributable to Industrial Activities). (2) Advances on sale of receivables and securitizations on books. (3) At March 31, 2014 this includes: adjustments for hedge accounting on financial payables of -€238 million (-€78 million at December 31, 2013), current financial receivables from jointly-controlled financial services companies of €118 million (€27 million at December 31, 2013) and (accrued)/unearned net financial charges for an amount of -€403 million (-€550 million at December 31, 2013).

Significant events

On January 1, 2014, the 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.

The distribution from Chrysler was funded from Chrysler’s available cash on hand and the payment by FNA was funded from Fiat’s available cash on hand.

On January 21, 2014, Chrysler and the 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. approved a corporate reorganization and the formation of Fiat Chrysler Automobiles N.V. (“FCA”) as a fully-integrated global automaker. In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the Board decided to establish Fiat Chrysler Automobiles N.V., organized in the Netherlands, as the parent company of the Group. Under the proposal approved by the Fiat Board, Fiat shareholders will receive one FCA common share for each Fiat share held and the FCA common shares will be listed on the New York Stock Exchange (NYSE) with an additional listing on the Mercato Telematico Azionario (MTA) in Milan. It is expected that FCA will be resident for tax purposes in the United Kingdom, but this is not expected to affect the taxes payable by Group companies in the jurisdictions where their activities are carried out.

On February 7, 2014, Chrysler repaid all amounts outstanding under the VEBA Trust Note, including accrued and unpaid interest, totaling approximately $5.0 billion. The repayment was financed by Chrysler as follows:

  • New Senior Credit Facilities – a $250 million additional term loan under Chrysler’s existing tranche B term loan facility that matures on May 24, 2017 and a new $1.75 billion term loan credit facility (the “Term Loan Credit Facility”) that matures on December 31, 2018;
  • Secured Senior Notes due 2019 – issuance of an additional $1.375 billion aggregate principal amount of 8 percent secured senior notes due June 15, 2019, at an issue price of 108.25 percent of the aggregate principal amount; and;
  • Secured Senior Notes due 2021 – issuance of an additional $1.380 billion aggregate principal amount of 8.25 percent secured senior notes due June 15, 2021 at an issue price of 110.50 percent of the aggregate principal amount.

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 21, 2014, Fiat Finance and Trade Ltd S.A. issued €1 billion of notes under the GMTN Program. The notes, issued at an issue price of 100 percent of the principal amount, bear a fixed rate of interest of 4.75% percent and mature in March 2021.

On March 31, 2014, 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. Expansion of the cooperation and related projects has already been approved by the relevant government authorities. The joint venture will finalize localized production plans in the near term, which include the consideration of a Jeep model designed specifically for the Chinese market. Production is expected to begin by late 2015.

On May 6, 2014, the CEO of Fiat S.p.A Sergio Marchionne along with members of the executive management of the Group presented the Group’s 2014-2018 Business Plan to financial analysts and institutional investors at Auburn Hills (Michigan, U.S.). All the materials delivered in the course of the event were made available on the corporate website of Fiat S.p.A. (www.fiatspa.com) and on the Investor Day website (www.fcagroup.com).

On June 15, 2014, the Board of Directors of Fiat S.p.A. announced that it has approved the cross border merger terms (“merger plan”) governing the merger of Fiat into its wholly owned subsidiary Fiat Investments N.V. This subsidiary, which is organized in the Netherlands, will be renamed Fiat Chrysler Automobiles N.V. (“FCA”) upon completion of the merger. Following the merger, FCA will become the holding company for the group. Under the merger plan, Fiat shareholders will receive one FCA common share for each Fiat ordinary share they hold. The FCA common shares will be listed on the New York Stock Exchange (NYSE) and are expected to be listed on the Mercato Telematico Azionario (MTA) in Milan. The merger plan will be submitted for approval to the Fiat shareholders at a general meeting that has been convened on August 1, 2014. A U.S. prospectus and an Italian information document (for the purposes of the Fiat extraordinary general meeting) will be made available to shareholders ahead of the vote to approve the merger plan. Fiat shareholders who do not vote in favor of the merger will be entitled to exercise a recesso right (cash withdrawal right) in accordance with Italian laws and regulations. The exercise of the recesso right by Fiat shareholders is conditional upon the merger becoming effective. The transaction will be subject to limited closing conditions, including listing on the NYSE and a €500 million cap on the amount of cash, if any, required to be paid in respect of the exercise of recesso rights by Fiat shareholders and opposition rights by creditors. The transaction is expected to be completed by the end of the year.

Commercial Register No.64236277 Legal notes | Credits