Fiat Chrysler Automobiles

(28.98% stake, 42.11% of voting rights on issued capital)

The key consolidated data of FCA for the first half of 2018 are as presented below:

Net revenues

The increase in NAFTA was primarily due to €3.6 billion from an increase in volumes and €1.1 billion from positive net pricing, partially offset by €3.8 billion negative foreign exchange translation effects.

The increase in LATAM was primarily due to €0.9 billion from higher shipments and favorable vehicle mix and €0.1 billion positive net pricing, which were partially offset by €0.8 billion from negative foreign exchange translation effects.

The decrease in APAC was primarily due to unfavorable mix and pricing actions resulting from announced changes to China import duties, in addition to negative foreign exchange translation effects.

The increase in EMEA was primarily due to increases from volumes and favorable mix being, partially offset by negative net pricing and negative foreign exchange effects.

The decrease in Maserati was primarily due to lower volumes and negative foreign currency translation effects.

The decrease in Components was primarily due to negative foreign currency translation effects, partially offset by higher volumes in Magneti Marelli and Teksid.

Adjusted EBIT

The analysis of Adjusted EBIT by segment is as follows:

Significant events in the first-half of 2018 and subsequent events

On 5 February 2018 S&P Global Ratings raised its long-term corporate credit rating on FCA N.V. from “BB” to “BB+”, while maintaining the Positive Outlook. The short-term credit rating is confirmed at “B”.

On 6 March 2018 Moody’s Investors Service raised from “Ba3” to “Ba2” the Corporate Family Rating of FCA N.V., and from “B1” to “Ba3” the rating on the bonds issued or guaranteed by FCA N.V. The outlook is stable. 

On 5 April 2018 the Board of Directors of Fiat Chrysler Automobiles N.V. announced that it has authorized FCA management to develop and implement a plan to separate the Magneti Marelli business from FCA and to distribute shares of a new holding company for Magneti Marelli to the shareholders of FCA. The separation is expected to be completed by the end of 2018 or early 2019 and shares of Magneti Marelli are expected to be listed on the Milan stock exchange.

The separation of Magneti Marelli will be subject to customary regulatory approvals, tax and legal considerations, final approval of the transaction structure by the FCA Board of Directors and other customary requirements. FCA may, at any time and for any reason, modify or terminate the proposed transaction, and there can be no assurances regarding the ultimate timing or completion of the proposed transaction.

In May 2018, the Group announced a further expansion of the partnership with Waymo with an agreement to deliver up to an additional 62,000 Chrysler Pacifica Hybrid minivans to Waymo’s self-driving fleet over the next three years.

On 1 June 2018, FCA presented the Group’s 2018-2022 Business Plan that builds upon the strategic actions taken in the prior plan to generate volume growth and margin expansion through the following:

• Continued emphasis on building strong brands by leveraging renewals of key products and portfolio expansion through new white space products with particular focus on the Jeep, Ram, Maserati and Alfa Romeo brands;
• Continue to focus on industrial rationalization to deliver cost savings through Manufacturing and Purchasing efficiencies;
• Implementation of various electrified powertrain applications throughout the portfolio to achieve regulatory compliance;
• Continue to partner with various outside experts to enhance skill set related to autonomous driving technologies, preserve full optionality and ensure speed to market; and
• Maintain a disciplined approach to the deployment of capital which includes re-establishment of consistent shareholder remuneration actions and pursuit of new business opportunities such as a U.S. captive finance company to maximize value creation.

FCA Group continue to assess the potential impacts of operationalizing and implementing the strategic targets set out in the updated Business Plan, including re-allocation of FCA resources, which may impact the recoverability of certain of assets or asset groups in future periods.

On 27 June 2018 Fiat Chrysler Automobiles N.V. signed with the European Investment Bank (“EIB”), a €420 million four-year loan to support research and development (“R&D”) projects to be implemented by FCA during 2018-2020. FCA investment in R&D for the period 2018-2020 has a number of key objectives including electrification technology solutions for hybrid and battery electric vehicles and the development of autonomous driving. Moreover, the R&D activities will be dedicated to the application of connectivity technologies for the offering of telematics services on the FCA product line-up. The R&D projects include also the development of digital technologies to be deployed in manufacturing processes. The loan consolidates EIB collaboration with FCA.

On 21 July 2018 the Board of Directors of Fiat Chrysler Automobiles N.V. named Mike Manley as CEO and called the Extraordinary General Meeting of Shareholders (“EGM”), which will take place on 7 September 2018 in Amsterdam to resolve on the proposed appointment of Mr. Michael Manley as executive director of the Company.

Outlook ⁽¹⁾

Based on the performance of APAC and Maserati for the three months ended 30 June 2018, which were impacted by changes in China import duties; slower than planned ramp-up of the all-new RAM 1500; and the impact on consumer confidence in Brazil coming from the recent truckers’ strike which we expect to continue through the upcoming elections, the Group revised its 2018 full year guidance as reported below. Adjusted net profit is confirmed at ~ €5 billion reflecting expected lower financial charges and effective tax rate.

• Net revenues €115-€118 million from  ̴ €125 billion;
• Adjusted EBIT €7.5 billion from ≥ €8.7 billion;
• Adjusted net profit ̴ €5.0 billion- confirmed;
• Net industrial cash ̴ €3.0 billion from €4.0 billion.  

⁽¹⁾ Amounts do not include any impacts from the previously announced potential spin-off of the Magneti Marelli business.