FCA(29.15% stake, 44.26% of voting rights on issued capital)



 

The key consolidated figures of FCA for the first nine months of 2016 and the third quarter of 2016 are presented below. Unless otherwise indicated the figures for the first nine months of 2015 and the third quarter of 2015 have been re-presented to exclude Ferrari, consistent with Ferrari’s classification as a discontinued operation for the year ended December 31, 2015.

fca1.png

(1) 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.
(2) Owners of the parent and non-controlling interests.

Net revenues

Net revenues in the third quarter of 2016 total €26.8 billion, in line with the third quarter of 2015. As regards net revenues by segment, increases are recorded in EMEA (+10%; +12% at constant exchange rates) primarily due to higher volumes and favorable vehicle mix mainly driven by the all-new Fiat Tipo family and in Maserati (+69%; +73% at constant exchange rates) due to higher shipments, positive net pricing and favorable vehicle and market mix mainly from the all-new Levante.

Net revenues in NAFTA decreased 5% (also at constant exchange rates) due to lower shipments, with a higher fleet mix, partially offset by favorable vehicle mix, while revenues in LATAM decreased €0.2 billion (-2%; -7% at constant exchange rates) owing to lower shipments, partially offset by favorable vehicle mix mainly from the all-new Fiat Toro.

The €0.6 billion increase in APAC (+2% also at constant exchange rates) is due to the favorable vehicle mix in China and the increased sales of components to the China joint venture, offsetting lower shipments, whereas the net increase in Components reflects higher volumes and favorable mix at Magneti Marelli, partially offset by lower volumes at Comau.

fca2.png

 

Adjusted EBIT

Adjusted EBIT in the third quarter of 2016 is €1,500 million, with an increase of €337 million (+29%) compared to €1,163 million in the third quarter of 2015, with improvement in all segments except LATAM.

The increase in NAFTA is due to positive net pricing, purchasing efficiencies and lower warranty costs, partially offset by lower revenues, higher manufacturing costs and increase in product costs for content enhancements.

EMEA’s improved Adjusted EBIT is due to higher revenues, purchasing efficiencies, improved results from joint ventures and favorable exchange effects, partially offset by higher research and development and manufacturing costs and higher advertising to support new product launches.

In APAC the increase is Adjusted EBIT is mainly due to the favorable mix on imported vehicles and the improved results from the China joint venture.

The significant improvement of Maserati Adjusted EBIT is due to the increase in net revenues, partially offset by higher industrial costs and commercial launch activities while the increase in Adjusted EBIT in Components is due to higher revenues, partially offset by higher industrial costs.

The decrease in LATAM is largely the result of higher input costs driven by inflation and foreign exchange effects.

The analysis of Adjusted EBIT by segment is as follows:

fca3.png

EBIT

Net charges recorded in the third quarter of 2016 of €159 million include €157 million relating to estimated costs associated with the planned recall for which there is ongoing litigation with a component supplier.

In the third quarter of 2015 net charges of €938 million were recorded mainly due to the change in estimate for future recall campaign costs for vehicles sold in prior periods in NAFTA (€761 million) and the writedown of inventories as well as incremental incentives for vehicles damaged in the Tianjin (China) port explosion (€142 million).

Net profit (loss) for the period

Net financial expenses in the third quarter of 2016 are €528 million, down €93 million compared to the third quarter of 2015 driven by gross debt reduction.

Net industrial debt

Net industrial debt increased €1 billion from June 30, 2016 to €6.5 billion at September 30, 2016 mainly due to capital expenditures during the third quarter (€2 billion), partially offset by cash flow generation from operating activities of a positive €0.8 billion, including the negative impact of seasonal working capital increase of €1.2 billion.

fca4.png

Significant events in the third quarter of 2016 and subsequent events

On July 18, 2016 FCA confirmed that it was cooperating with a Securities Exchange Commission investigation into the reporting of vehicle unit sales to end customers in the United States. In its annual and quarterly financial statements, FCA records revenues based on shipments to dealers and customers and not on reported vehicle unit sales to end customers. FCA will cooperate fully with these investigations.

As announced in its July 26, 2016 press release FCA US has modified its methodology for sales reporting.
FCA US’s in the United States reported vehicle sales represent unit sales of vehicles to retail customers, deliveries of vehicles to fleet customers and to others such as FCA US’s employees and retirees as well as vehicles used for marketing. Most of these reported sales reflect retail sales made by dealers out of their own inventory of vehicles previously purchased by them from FCA US. Reported vehicle units sales do not correspond to FCA US’s reported revenues, which are based on FCA US’s sale and delivery of vehicles, and typically recognized upon shipment to the dealer or end customer.

On August 1, 2016 Gruppo Editoriale l’Espresso S.p.A. (GELE) and Italiana Editrice S.p.A. (ITEDI) announced the signing of a framework agreement, which sets out the terms of the proposed integration between the two companies. The agreement was also signed by CIR S.p.A. (CIR), controlling shareholder of GELE, as well as FCA and Ital Press Holding S.p.A., controlled by the Perrone family, the shareholders of ITEDI. The combination will result in creation of the leading player in the Italian media and newspaper publishing sector and one of the leaders in Europe.

Under the agreement, FCA and Ital Press will transfer 100% of their ITEDI shares to GELE in exchange for newly issued reserved shares. Upon completion of the transaction, CIR will hold a 43.4% ownership interest in GELE, with FCA holding 14.63% and Ital Press 4.37%. As soon as practicable following completion, FCA will distribute its entire interest in GELE to holders of FCA common stock. That distribution will result in EXOR acquiring a 4.26% interest in GELE.

In conjunction with the merger agreement, CIR also entered into two shareholder agreements with deferred effect with FCA and Ital Press relative to their respective future shareholdings in GELE. In addition to CIR’s undertaking to vote for the proposed transaction at the GELE shareholder meeting, to be convened at the proper time, the parties also undertake, with effect from the completion date of the merger, to appoint John Elkann and Carlo Perrone to the GELE Board of Directors and grant CIR the right to appoint the Chairman and Chief Executive Officer.

FCA also undertakes, for the duration of the shareholder agreement, not to transfer its shares in GELE that are subject to the terms of the agreement.

The agreement between CIR and FCA will expire upon distribution by FCA of its shares in GELE to holders of FCA common stock. Concurrent with the expiry of the CIR-FCA shareholder agreement, a new shareholder agreement will take effect between CIR and EXOR. The terms of that agreement include: obligations of mutual consultation in advance of any GELE shareholder meeting; undertakings from CIR relating to the appointment and permanence to GELE’s Board of Directors of a representative designated by EXOR; undertakings from EXOR to present and vote for a single voting list jointly with CIR for elections to GELE’s Board of Directors; and an undertaking from EXOR, for the duration of the agreement, not to transfer the shares subject to the terms of the agreement (with the exception of transfers to other members of the EXOR group).

Both the CIR-EXOR and CIR-Ital Press shareholder agreements will remain in force for a period of three years.

Completion of the transaction is expected during the first quarter of 2017.

Commercial Register No.64236277 Legal notes | Credits