FCA

(29.23% stake, 42.40% of voting rights on issued capital)

 

The key consolidated figures of FCA reported in the first half of 2017 are as presented below.

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(1) Adjusted EBIT is a non-GAAP financial measure used to measure performance. Adjusted EBIT excludes certain adjustments from net profit from continuing operations including: gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and unusual income/(expenses) that are considered rare or discrete events that are infrequent in nature, and also excludes net financial expenses and tax expenses/(benefit);
(2) At December 31, 2016;
(3) Net industrial debt is computed as: debt plus derivative financial liabilities related to industrial activities less (i) cash and cash equivalents, (ii) current available-for-sale and held-for-trading securities, (iii) current financial receivables from Group or jointly controlled financial services entities and (iv) derivative financial assets and collateral deposit; therefore, debt, cash and cash equivalents and other financial assets/liabilities pertaining to financial services entities are excluded from the computation of net industrial debt.

Net revenues

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The decrease in NAFTA (-4.1%; -6.9% at constant exchange rates) is primarily due to lower shipments, partially offset by favorable vehicle mix, and positive foreign exchange translation.

The increase in LATAM (+32.5%; +14.7% at constant exchange rates) is due to a favorable volume and vehicle mix and favorable foreign exchange translation effects.

The decrease in APAC (-13.9%; -15.3% at constant exchange rates) is primarily due to lower consolidated shipments, partially offset by favorable vehicle mix.

The increase in EMEA (+7.7%; +8% at constant exchange rates) is mainly attributable to the increase in volumes and favorable vehicle mix mainly driven by the all-new Alfa Romeo Giulia and all-new Alfa Romeo Stelvio, partially offset by negative net pricing, including devaluation of the British Pound sterling.

The increase in Maserati (+86.1%; +86% at constant exchange rates) is primarily due to higher shipments and favorable vehicle and market mix.

The increase in Components (+9.2%; +7.1% at constant exchange rates) is due to higher volumes from all three businesses that were primarily driven by Comau’s automation systems business line and Magneti Marelli. Magneti Marelli and Comau non-captive net revenues during the six months ended June 30, 2017 were 66% and 71% respectively.

Adjusted EBIT

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The slight decrease in NAFTA is mainly due to lower shipments, net of improved mix, unfavorable net price related to incentives and foreign exchange transaction effects and prior year one-off residual values adjustment, partially offset by purchasing savings net of higher product costs for content enhancements, and lower warranty costs, including supplier recoveries and favorable currency translation.

The increase in LATAM is mainly attributable to the increase in volumes and favorable vehicle mix, positive net pricing, mainly in Brazil and lower advertising costs, partially offset by the increase in product costs driven by inflation and higher depreciation and amortization related to new vehicles. Adjusted EBIT for the six months ended June 30, 2017 excluded total charges of €125 million, of which €72 million related to workforce restructuring costs and €53 million of asset impairment charges primarily related to the early discontinuance of Fiat Novo Palio production and certain real estate assets in Venezuela.

The increase in APAC is primarily due to a favorable mix, net of lower consolidated shipments and improved results from the GAC FCA JV, partially offset by commercial launch activities related to the Alfa Romeo brand and higher industrial costs from negative foreign exchange transaction effects.

The increase in EMEA is primarily due to higher volumes and favorable vehicle mix, lower industrial costs mainly due to purchasing and manufacturing efficiencies, partially offset by unfavorable net pricing, related to higher incentives and negative foreign exchange transaction effects and an increase in selling and general expenses due to higher advertising costs to support new product launches.

The significant improvement of Maserati Adjusted EBIT is due to the increase in shipment and favorable mix, partially offset by higher depreciation and amortization costs.

The increase in Components is mainly due to the positive effect from volume and industrial efficiencies. Adjusted EBIT excludes charges of €40 million, primarily related to resolution of certain long-standing legal matters.

Net profit

Net profit in the first half of 2017 is €1,796 million, up €997 million compared to the first half of 2016.

The increase is primarily due to the improved operating performance, the reversal of €895 million of a liability related to Brazilian indirect taxes previously accrued by the Group’s Brazilian subsidiaries, partially offset by €281 million related decrease in deferred tax assets related such Brazilian liability and the write-off of certain deferred tax assets in Brazil of €453 million. In the first half of 2016 net profit was affected by €414 million pre-tax charge to adjust the warranty provisions for the estimated cost of recall campaigns related to an industry-wide recall for airbag inflators manufactured by Takata Corporation.

Net industrial debt

Net industrial debt at June 30, 2017 is €4.2 billion. The decrease of €0.4 billion compared to December 31, 2016 principally reflects the €144 million proceeds received from the sale of the investment in CNH Industrial and positive effects from foreign exchange.

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Significant events in the first half of 2017 and subsequent events

On February 24, 2017, FCA US prepaid the outstanding principal and accrued interest for its Tranche B Term Loan. The prepayment of U.S.$1,826 million (€1,721 million) was made with cash on hand and did not result in a material loss on extinguishment.

In March 2017, the Group repaid a note at maturity with a principal amount of €850 million.

In March 2017, the Group amended its syndicated revolving credit facility originally signed in June 2015. The amendment increased the RCF from €5.0 billion to €6.25 billion and extended the RCF’s final maturity to March 2022. The RCF, which is available for general corporate purposes and for working capital needs of the Group, is structured in two tranches: €3.125 billion, with a 37-month tenor and two extension options of 1-year and of 11-months exercisable on the first and second anniversary of the amendment signing date, respectively, and €3.125  billion, with a 60-month tenor.

On March 21, 2017, the Group completed the sale of its available for sale investment in CNHI, which consisted of 15,948,275 common shares representing 1.17 percent of CNHI’s common shares for an amount of €144 million. The sale did not result in a material gain. The additional 15,948,275 special voting shares owned by the Group, which had not been attributed any value, expired upon the sale of the CNHI common shares.

On March 30, 2017, Moody's Investors Service improved FCA's outlook to positive from stable and affirmed the Ba3 corporate credit rating.

On April 12, 2017, FCA US amended the credit agreement that governs the Tranche B Term Loan due 2018. The amendment reduced the applicable interest rate spreads by 0.50 percent per annum and reduced the LIBOR floor by 0.75 percent per annum, to 0.00 percent. In addition, the base rate floor was eliminated.

On May 23, 2017, the Environmental and Natural Resources Division of the U.S. Department of Justice (“DOJ-ENRD”) filed a civil lawsuit against us in connection with concerns raised by the U.S. Environmental Protection Agency (“EPA”) in its Notice of Violation dated January 12, 2017.

In June 2017, the Group repaid a note at maturity with a principal amount of €1,000 million.

In June 2017, FCA and Itedi’s non-controlling shareholder, Ital Press Holding S.p.A. (“Ital Press”), transferred 100 percent of the shares of Itedi to GEDI Gruppo Editoriale S.p.A. (“GEDI”), previously known as Gruppo Editoriale L’Espresso S.p.A. in exchange for newly-issued shares resulting in CIR S.p.A., the controlling shareholder of GEDI, holding a 43.4 percent ownership interest in GEDI, FCA holding 14.63 percent and Ital Press holding 4.37 percent. As a result, the Group recorded a gain of €49 million. The Group's interest in GEDI was distributed to holders of FCA common stock on July 2, 2017.

During the six months ended June 30, 2017, Brazilian courts have been consistent in applying the merits of the Brazilian Supreme Court’s March 15, 2017 ruling, including lower court decisions on our and other related indirect tax cases. The Supreme Court ruled that state value added tax should be excluded from the base for calculating a federal tax on revenue. As a result, the Group believes that the likelihood of economic outflow related to such indirect taxes is no longer probable and reversed a liability of €895 million, along with a corresponding reversal of the related €281 million of deferred tax assets.

During the six months ended June 30, 2017, the all-new Jeep Compass and the all-new Alfa Romeo Stelvio debuted in Europe at the 2017 Geneva International Motor Show. In addition, the Alfa Romeo Giulia was launched in China.

On August 21, 2017 BMW Group, Intel and Mobileye announced that they have signed a memorandum of understanding with the intention for Fiat Chrysler Automobiles (FCA) to be the first automaker to join them in developing a world leading, state-of-the-art autonomous driving platform for global deployment.

The development partners intend to leverage each other’s individual strengths, capabilities and resources to enhance the platform’s technology, increase development efficiency and reduce time to market. One enabler to achieve this will be the co-location of engineers in Germany as well as other locations. FCA will bring engineering and other technical resources and expertise to the cooperation, as well as its significant sales volumes, geographic reach and long-time experience in North America.

Target 2017

The Group confirms full-year guidance for 2017:

  • Net revenues €115 - €120 billion;
  • Adjusted EBIT > €7.0 billion;
  • Adjusted net profit > €3.0 billion;
  • Net industrial debt < €2.5 billion.
Commercial Register No.64236277 Legal notes | Credits