Fiat Chrysler Automobiles

FCA

28.55% stake, 44.42% of voting rights on issued capital

The key consolidated data of FCA for the first half of 2020 are as presented below:



  I Half  Change
€ million 2020 2019 Amount %
Net revenues 32,274 51,222 (18,948) (37.0)
Adjusted EBIT(1) (876) 2,594 (3,470) (133.8)
Net (loss) profit from continuing operations (2,742) 1,301 (4,043) (310.8)
Net (loss) profit (including discontinued operations) (2,742) 5,271 (8,013) (152.0)
(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 expense/(benefit).

Covid-19

During the first half of 2020, the Covid-19 virus spread worldwide and was declared a pandemic by the World Health Organization on 11 March 2020. In response, many governments in affected jurisdictions imposed travel bans, quarantines and other emergency public safety measures. For example, governments have imposed restrictions on travel and the movement and gathering of people, as well as restrictions on economic activity. At 31 July 2020, many of these measures are still in place.

As the severity of the Covid-19 pandemic became apparent, FCA leadership took actions to protect its employees and communities, as well as strengthen its financial position and limit the impact on its financial performance.

FCA implemented a temporary suspension of production across its facilities: in APAC starting with China on 23 January 2020; in EMEA, starting with Italy from 11 March 2020; in Maserati beginning 12 March 2020; in North America phased-in progressively from 18 March 2020 and in LATAM on 23 March 2020. FCA also implemented remote working arrangements, where feasible, across all regions at various stages during the first quarter, and has restricted both domestic and international business travel since late February. These arrangements were structured to ensure continuation of critical activities, including, but not limited to, appropriate functioning of its internal controls and financial reporting systems and processes.

FCA worked closely with all relevant stakeholders, including unions and dealer representatives, to develop and implement plans to restart production and vehicle sales once governments in various jurisdictions permitted, including the development of enhanced sanitizing and health and safety procedures.

On 19 February and 24 February 2020, production restarted at its GAC Fiat Chrysler Automobiles Co. joint venture plants in Guangzhou and Changsha, China, respectively. On 27 April 2020, production restarted at his Sevel joint venture plant in Atessa (Italy). Production restarted in all North American plants by 1 June 2020; in India on 18 May 2020 and in Latin America by 11 May 2020. European production has resumed and a full restart is expected in the third quarter of 2020. Return to work procedures for FCA’s offices and other facilities will also be phased in with expected continued widespread use of remote working practices.

During the six months ended 30 June 2020, FCA took several key actions to secure its liquidity and financial position, including drawing on existing bilateral lines of credit totaling €1.5 billion and securing an additional incremental bridge credit facility of €3.5 billion, structured as a bridge to capital markets, which was available to be drawn beginning in April and replaced as noted below. In addition, measures were taken to reduce cash outflows, including: a suspension of a significant number of capital expenditure programs; delaying non-essential spending; temporary lay-offs, salary cuts and deferrals; and significant reductions to marketing and other discretionary spend. On 21 April 2020, FCA drew down its €6.25 billion syndicated revolving credit facility, while on 24 June 2020, the Group announced that FCA Italy S.p.A., a wholly owned subsidiary of Fiat Chrysler Automobiles N.V., and other Italian companies in the FCA Group had signed a 3-year, €6.3 billion credit facility with Intesa Sanpaolo (Italy’s largest banking group) to finance FCA activities in Italy.

FCA has also taken actions to support the wider community in the countries in which we operate, including: producing protective masks for healthcare workers and first responders, with over one million shipped during the first quarter; in North America and EMEA working with medical equipment manufacturers to support production of ventilators, other medical equipment and personal protective equipment, such as Siare Engineering International Group (Bologna, Italy); in APAC the Group donated personal protective equipment and vehicles; Maserati provided funding scholarships at medical schools; in LATAM, FCA worked on the creation of a makeshift field hospital close to its plants in Brazil, with a further two under construction in Argentina and Brazil, the production of face shields, vehicle fleet support and engineering and production assistance for the manufacturing and servicing of ventilators.

Further to the planned 50/50 merger of their businesses (as defined in the combination Agreement announced on 18 December 2019), on May 13, 2020, the board of directors of FCA and the managing board of Peugeot announced the decision by each company to not distribute an ordinary dividend in 2020 related to financial year 2019, in light of the impact from the COVID-19 crisis.

The completion of the project of merger between Groupe PSA and FCA that will give rise the new group “Stellantis”, is expected to occur in the first quarter of 2021, subject to customary closing conditions, including approval by both companies’ shareholders at their respective Extraordinary General Meetings and the satisfaction of antitrust and other regulatory requirements.

Net revenues and Adjusted EBIT

Net revenues   Adjusted EBIT
Six months ended 30 June   Six months ended 30 June
2020 2019 € million 2020 2019
22,750 33,696 North America 587 2,609
1,799 3,982 LATAM (123) 215
893 1,354 APAC (118) (21)
5,964 10,634 EMEA (859) 3
439 814 Maserati (174) (108)
429 742 Other activities, unallocated items and adjustments (189) (104)
32,274 51,222 Total continuing operations, excluding Magneti Marelli (876) 2,594

NORTH AMERICA

The decrease in North America net revenues in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower shipments partially offset by positive channel and model mix, favorable net pricing as well as favorable foreign exchange translation effects. The decrease in North America adjusted EBIT in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower volumes, non-repeat of prior year benefit due to the CAFÉ fine rate reduction in the U.S. on Model Year 2019 vehicles sold in prior periods and higher warranty costs, partially offset by positive pricing, favorable mix and reduced advertising expense.

LATAM

The decrease in LATAM net revenues in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower shipments, non-repeat of prior year one-off recognition of credits related to indirect taxes, as well as negative foreign exchange impacts from weakening of the Brazilian Real. The decrease in LATAM adjusted EBIT in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower net revenues and purchasing cost inflation partially offset by reduced advertising and general and administrative costs.

APAC

The decrease in APAC net revenues in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower shipments due to Covid-19 related market disruption throughout the region, and components sales to China JV.

The decrease in Adjusted EBIT in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to lower net revenues and lover GAC FCA JV results, partially offset by reduced marketing expense and general administrative costs.

EMEA

The decrease in EMEA Net revenues in the six months ended 30 June 2020 compared to the same period in 2019, was primarily due to lower volumes.

The decrease in EMEA Adjusted EBIT was primarily due to lower volumes, unfavorable mix and increased compliance costs, included within industrial costs. These were partially offset by lower fixed cost containment and restructuring actions implemented in prior periods, lower depreciation and amortization and reduced advertising costs.

Maserati

The decrease in Maserati Net revenues in the six months ended 30 June 2020 compared to the same period in 2019 was primarily due to decreased shipments, due to Covid-19 market and production impacts, and unfavorable market and model mix. The decrease in Maserati Adjusted EBIT was primarily due to lower net revenues.

The following table is the reconciliation of Net (loss) profit from continuing operations to Adjusted EBIT (non-GAAP measure).

  I Half
€ million 2020 2019
Net (loss) profit from continuing operations (2,742) 1,301
Tax (benefit) expense 690 529
Net financial expenses 450 504
Adjustments:    
Restructuring costs, net of reversals 43 196
Impairment expense and supplier obligations 643 155
(Losses)/gains on disposal of investments (4) (7)
Brazilian indirect tax - reversal of liability/recognition of credits  - (164)
Other 44 80
Total adjustments 726 260
Adjusted EBIT (876) 2,594

During the six months ended 30 June 2020, Adjusted EBIT excluded adjustment primarily related to €43 million of restructuring costs, primarily related to North America and LATAM, €643 million of impairment expense, of which €450 million related to impairment of CGUs in EMEA, LATAM and Maserati, €177 million related to impairments of certain assets in Maserati and €16 million related to asset impairments in North America, and €44 million of other costs, relating to litigation proceedings.

Cash flows from operating activities to Industrial free cash flows

  I Half
€ million 2020 2019
Cash flows from operating activities (6,032) 3,751
Less: Cash flows from operating activities discontinued operations - (308)
Cash flows from operating activities – continuing operations (6,032) 4,059
Less: Operating activities not attributable to industrial activities 17 46
Less: Capital Expenditure for industrial activities 3,991 3,329
Add: Net intercompany payments between continuing operations and discontinued operations - (200)
Add: Discretionary pension contribution, net of tax 68 -
Industrial free cash flows (9,972) 484

For the six months ended 30 June 2020 Industrial free cash flows from continuing operations decreased by €10.5 billion as compared to the same period in 2019, primarily reflecting negative working capital impacts as referred above, as well as higher capital expenditure during the first quarter.

2020 Outlook

On 18 March 2020, due to the continued uncertainty of market conditions and regional operating restrictions related to the evolving Covid-19 pandemic, FCA withdrew its 2020 Guidance.

For the second half of 2020, the Group estimates the following outlook:

  • Normal summer production shutdown eliminated or shortened at most North America plants to align stronger-than-expected consumer demand and current inventory levels with production;
  • Recovering profitability and positive Industrial free cash flows based on market outlook, driven primarily by North America;
  • Estimated capex spending of €4.0 - €4.5 billion, with full year 2020 estimated capex of €8.0 - €8.5 billion, as the Group continues to invest in key product and powertrain programs;
  • On-track to achieve previously announced expected cost savings of approximately €2 billion for full year 2020;
  • Planned plant downtime:
  • Warren Truck down 14 weeks (late June to early October 2020) for retooling to produce all-new Jeep Wagoneer and Grand Wagoneer (retimed from the second quarter of 2020 due to Covid-19); and
  • Toluca down 4 weeks (in July 2020) for retooling related to Jeep Compass mid-cycle freshening.

2020 Vehicle launches:

  • All-new Fiat Strada pickup truck (Start of Production May 2020);
  • Mid-cycle freshenings of Maserati Quattroporte, Levante and Ghibli, together with the first ever Ghibli mHEV and V8 Trofeo models (Start of Production third quarter 2020); and
  • All-new Ram TRX pickup truck (Start of Production fourth quarter 2020).
Commercial Register No.64236277 Note legali | Credits