FCA FIAT CHRYSLER AUTOMOBILES(29.16% stake, 44.27% of voting rights on issued capital)

 

 The key consolidated figures of FCA reported in 2015, including the data of Ferrari, unless otherwise indicated, are the following:

  Year Change
€ million 2015 2014  
Net revenues 113,191 96,090 17,101
EBIT (1) 2,625 2,834 (209)
Adjusted EBIT (2) 5,267 3,766 1,501
Profit before taxes (1) 259 783 (524)
Profit from discontinued operations (3) 284 273 11
Profit for the year 377 632 (255)
Net profit attributable to owners of the parent 334 568 (234)
(1) Excluding Ferrari, classified as a discontinued operation for the year ended December 31, 2015. (2) Adjusted EBIT is a non-GAAP financial measure used to measure performance. It is calculated as EBIT excluding gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and other unusual income/(expenses) that are considered rare or discrete events that are infrequent in nature. (3) Profit attributable to Ferrari.
€ million 12/31/2015 12/31/2014 Change
Total assets 105,040 100,510 4,530
Net debt (8,583) (10,849) 2,266
- of which: Net industrial debt (6,012) (7,654) 1,642
Equity attributable to owners of the parent 16,092 13,425 2,667

Net revenues

Net revenues for the year are €113.2 billion, an increase of €17.1 billion, or 18% (+6% at constant exchange rates) from €96.1 billion in the prior year. As for the segments, the improvement is mainly attributable to the €17.5 billion increase in NAFTA (+33%; +13% at constant exchange rates) thanks to higher volumes, positive net pricing and favorable foreign currency translation effects, the increases in EMEA of €2.3 billion (+13%; +11% at constant exchange rates) due to higher volumes, positive net pricing and favorable product mix and in Components of €1.2 billion (+13%; +11% at constant exchange rates), partially offset by the decreases recorded by LATAM
(-25%; -18% at constant exchange rates) driven by reduced shipments, by APAC (-22%; -31% at constant exchange rates) caused by lower shipments and increased incentives in China and by Maserati (-13%; -22% at constant exchange rates) owing to a reduction in volumes that resulted from weaker segment demand in the reference markets.

 YearChange
€ million 2015 2014 amount %
NAFTA 69,992 52,452 17,540 33.4
LATAM 6,431 8,629 (2,198) -25.5
APAC 4,885 6,259 (1,374) -22.0
EMEA 20,350 18,020 2,330 12.9
Ferrari 2,596 2,450 146 6.0
Maserati 2,411 2,767 (356) -12.9
Components (Magneti Marelli. Teksid. Comau) 9,770 8,619 1,151 13.4
Other 844 831 13 1.6
Unallocated items and adjustments (4,088) (3,937) (151) n,s,
Net revenues 113,191 96,090 17,101 17.8

Adjusted Ebit

Adjusted EBIT in 2015 is €5,267 million, an increase of €1,501 million (+40%; +19% at constant exchange rates) from the prior year. The increase in Adjusted EBIT is primarily due to strong gains recorded in NAFTA attributable to higher volumes, positive net pricing, positive foreign currency translation effects and purchasing efficiencies, partially compensated by increased warranty costs due to recall campaigns and vehicle content enhancement. EMEA recorded continual improvements thanks to a favorable product mix reflecting the continued success of the Fiat 500X and Jeep Renegade, positive net pricing and purchasing and industrial efficiencies, partially offset by the increase in industrial costs, reflecting higher costs for U.S. imported vehicles due to a stronger U.S. dollar and marketing spending.

Adjusted EBIT of LATAM is a negative €87 million, a reduction of €376 million due to lower shipments owing to market conditions, start-up costs for the Pernambuco factory and costs for the commercial launch of the Jeep Renegade, which was partially offset by favorable net pricing and favorable product mix driven by sales of the Jeep Renegade.

The decrease in APAC Adjusted EBIT of €489 million is due to lower volumes, unfavorable net pricing and negative foreign currency translation effects, partially offset by reduced advertising expenses.

Maserati reported lower Adjusted EBIT due to lower volumes, unfavorable mix and higher industrial costs related to the start-up costs for the all-new Levante, which is expected to launch in 2016.

The improved performance of Components (+52.3%) is related to higher volumes, cost containment actions and efficiencies.

 YearChange
€ million 2015 2014  
NAFTA 4,450 2,179 2,271
LATAM (87) 289 (376)
APAC 52 541 (489)
EMEA 213 (41) 254
Ferrari 473 404 69
Maserati 105 275 (170)
Components (Magneti Marelli. Teksid. Comau) 395 285 110
Other (150) (116) (34)
Unallocated items and adjustments (184) (50) (134)
Adjusted EBIT 5,267 3,766 1,501

EBIT

EBIT in 2015 included net unusual expenses totaling €2,169 million principally referring to the change in estimate for future recall campaign costs for vehicles sold in NAFTA in prior periods (€761 million), the estimate of expenses to realign a portion of manufacturing capacity in NAFTA (€834 million), the writedown of inventory and incremental incentives for the vehicles affected by the explosions at the Port of Tianjin (€142 million), the devaluations of the Argentinian Peso (€83 million) resulting from changes in monetary policy and the Venezuelan bolivar (€80 million) following the adoption of the SIMADI exchange rate and the agreement, and subsequent amendments, with the National Highway Traffic Safety Administration in the United States (€144 million).

EBIT in 2014 was adjusted to arrive at Adjusted EBIT mainly by the €495 million charge connected with the UAW Memorandum of Understanding entered into by FCA US in January 2014, the €92 million writedown of the Venezuelan bolivar, net of the €223 million non-cash and non-taxable unusual income resulting from the fair value of the options previously exercised in relation to the purchase of FCA US.

Profit for the year

Net financial expenses total €2,377 million, €330 million higher than in 2014, primarily reflecting the prepayment of certain FCA US notes, unfavorable foreign currency translation, an increase in debt levels in Brazil, partially offset by interest cost savings resulting from the refinancing transactions and reduction in overall gross debt in 2015.

Tax expenses amount to €310 million, a decrease of €234 million compared to 2014. The reduction is primarily related to lower profit before taxes.

Net industrial debt

Net industrial debt at December 31, 2015 is €6 billion, a decrease from €7.7 billion at December 31, 2014. The improvement of €1.7 billion reflects positive cash flow of €9.7 billion from industrial operating activities and €0.7 billion of positive foreign exchange translation effects primarily related to the devaluation of the Brazilian real, which are partially offset by capital expenditures of €9.2 billion. The decrease also reflects the net cash proceeds from the IPO of 10% of Ferrari on the New York Stock Exchange.

 
€ million 12/31/2015  12/31/2014 Change
Third parties debt (principal) (29,716) (32,892) 3,176
- Bank debt (14,507) (13,120) (1,387)
- Capital market instruments (1) (13,646) (17,729) 4,083
- Other debt (2) (1,563) (2,043) 480
Asset-backed financing (3) (206) (469) 263
Accruals and other adjustments (104) (305) 201
Gross debt (30,026) (33,666) 3,640
Cash and cash equivalents and current securities 21,326 23,050 (1,724)
Derivative assets/(liabilities) 117 (233) 350
Net debt (8,583) (10,849) 2,266
Industrial activities (6,012) (7,654) 1,642
Financial services (2,571) (3,195) 624
1) Includes bonds and other securities issued on financial markets. (2) Includes: HCT Notes (Canadian Health Care Trust Notes), arrangements accounted for as a lease under IFRIC 4 – Determining whether an arrangement contains a lease, and other non-bank financing. (3) Advances on sale of receivables and securitizations on book.

 

Significant events in 2015

In April 2015 FCA issued $1.5 billion (€1.4 billion) total principal amount of 4.50% unsecured senior debt securities due in 2020 (the “Initial 2020 Notes”) and $1.5 billion total principal amount of 5.250% unsecured senior debt securities due 2023 (the “Initial 2023 Notes”) both at the issue price of 100% of their principal amount. The initial 2020 Notes and initial 2023 Notes are collectively referred to as “the Initial Notes”.

Also in April FCA’s new compensation arrangement was presented at a meeting with the trade unions. The arrangement incentivizes all employees within the automobiles business toward achievement of the productivity, quality and profitability targets established in the 2015-2018 business plan and is expected to cost FCA approximately €600 million over the 4-year period.

On May 14, 2015 FCA US prepaid its 8% secured senior notes due in 2019 with a redemption payment of $3.1 billion.

Giulia, a new model of Alfa Romeo, was unveiled to the international press in the Quadrifoglio Verde version at the newly renovated Alfa Romeo Historic Museum on June 24, 2015, the 105th anniversary of the founding of Alfa Romeo.

On July 4, 2015 the new Fiat500 was revealed, exactly eight years after the iconic Fiat500 was first launched, and the FiatToro, a new sport compact pick-up truck designed specifically for South America and to be built in Pernambuco, was previewed in September.

October 21, 2015 was the first day of trading on the New York Stock Exchange for the 17,171,500 shares in Ferrari’s initial public offering, at the initial offering price of $52 per share. The closing of the transaction was announced on October 26, 2015 with the confirmation that the underwriters exercised in full their option to purchase 1,717,150 shares. The gross proceeds for FCA of the total 18,892,150 Ferrari shares sold total $982.4 million.

On October 22, 2015 FCA US and UAW signed a new four-year national collective bargaining agreement effective 2016. The provisions of the new agreement include incentives upon meeting certain quality, productivity and profitability performance metrics and closes the pay gap between “traditional” older and “in-progression” younger employees over an eight-year period.

In November 2015 the all-new Fiat 124 Spider was introduced at the 2015 Los Angeles Auto Show and is expected to be available in EMEA and NAFTA in the second quarter of 2016.

The all-new Fiat Tipo was launched in Italy in December 2015 and is being sold in over forty countries across EMEA. The new Fiat Tipo won the prestigious AUTOBEST award and was voted “The Best Buy Car of Europe in 2016”.

On January 3, 2016 the transactions for the separation of FCA’s remaining ownership interest in Ferrari N.V. and the distribution of that ownership interest to holders of FCA shares and mandatory convertible securities were completed. FCA common shareholders and holders of special voting shares received one common share and one special voting share of Ferrari for every ten common shares and special voting shares of FCA, whereas the holders of FCA mandatory convertible securities received 0.77369 Ferrari common shares for every $100 notional amount held.

Starting January 4, 2016 Ferrari common shares are also traded on the Borsa Italiana’s MTA.

The spin-off of Ferrari allowed FCA to start 2016 operations with net industrial debt of €5 billion.

On March 2, 2016 FCA announced its intention to consummate a transaction that will result in the creation of the leading player in the Italian media and publishing business and to distribute all of its media and publishing sector interest to shareholders, consistent with its desire to increase focus on its core business.

The transaction, covered by a Memorandum of Understanding provides for the merger between FCA’s media and publishing subsidiary ITEDI S.p.A. and the Italian media group, Gruppo Editoriale L’Espresso S.p.A.

Based on the preliminary valuation range agreed between the parties, following consummation of the merger, FCA would hold approximately 16% of the share capital of the combined entity, while FCA’s minority partner in the publishing business Ital Press Holding S.p.A. (controlled by the Perrone family), would hold approximately 5% of the combined entity.

The Memorandum is binding on the parties and, subject to the conditions set out in the Memorandum, requires that they enter into definitive agreements no later than June 30, 2016. The merger is expected to be consummated in the first quarter of 2017, following receipt of the necessary regulatory approvals and satisfaction of the conditions precedent customary for this type of transaction (such as completing satisfactory due diligence and obtaining corporate approvals).

As soon as practicable following consummation of the merger, FCA will distribute its entire interest in the enlarged group to the holders of its common shares.

Consistent with its stated intent to increase focus on its core business and prior to proceeding with the above mentioned merger and distribution, FCA will distribute its entire ownership interest in RCS MediaGroup S.p.A. to holders of its common shares.

In March 2016 FCA US, which is controlled by FCA, made a $2 billion voluntary prepayment, applied to the Term Loans due in 2017 and 2018, in proportion to their respective principal balances, bringing the remaining debt to approximately $2.8 billion. This prepayment, together with the amendments to the two Term Loans, eliminates covenants restricting the provision of guarantees and payment of dividends by FCA US for the benefit of the rest of the FCA Group and enables access to the second €2.5 billion tranche of FCA’s €5 billion syndicated revolving credit facility.

Commercial Register No.64236277 Legal notes | Credits