Fiat Chrysler q4 fy 2013 results

Q4 & FY 2013
Results Review

January 29, 2014

20 Novembre, 2010

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Q4 & FY 2013 Results Review

nor

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Finally,

January 29, 2014

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2

The creation of global carco
The last key milestone

TRANSACTION SUMMARY

(PURCHASE OF VEBA’S 41.5% EQUITY INTEREST IN CHRYSLER)

•
•

Transaction closed on Jan 21, 2014
Fiat acquired VEBA’s 41.5% equity
interest in Chrysler for aggregate
consideration of $3.65bn, funded
through:




Remaining consideration of $1.75bn
paid by Fiat


•

One-time special distribution from
Chrysler to VEBA of $1.9bn

Both above considerations funded from
available cash

Separately, Chrysler entered into an
MoU with UAW to supplement existing
collective bargaining agreement



Four equal annual payments by Chrysler
to VEBA Trust totalling $0.7bn over next
three years ($175mn made at closing,
$175mn on each of following three
anniversaries)



Commitments from UAW to support
Chrysler’s industrial ops

TRANSACTION BENEFITS TO FIAT

•

Acquisition of remaining 41.5% of Chrysler at reasonable levels

•

Eliminates headwinds to seamless integration of Fiat–Chrysler
global alliance

•

•

Parties agreed to dismiss litigation
proceedings in Delaware Chancery
Court

Effective and efficient access to capital markets

•

•

Full optimization of global product platforms, R&D,
manufacturing footprint and sales & marketing efforts

Not envisioned that Fiat will require
equity capital to be raised via a rights
issue

January 29, 2014


3

Fiat re-organization
Summary of proposed transaction
FIAT S.P.A.
Transaction
Structure

Voting
Mechanism

Listing

Withdrawal
Rights

Process

Timeline

January 29, 2014

•
•
•
•

REORGANIZES AFTER COMPLETION OF PURCHASE OF

CHRYSLER GROUP LLC

Statutory reverse merger of Fiat S.p.A. into a wholly owned Dutch NewCo to be renamed Fiat Chrysler
Automobiles N.V. (upon closing of merger, N.V. will issue common shares with 1:1 exchange ratio)
NewCo expected to be resident for tax purposes in UK
Loyalty voting structure to promote core base of long-term shareholders
Shareholders who vote at Fiat EGM and continue to hold shares until closing may elect for an
additional special voting share holding an immaterial economic entitlement




Shareholders may retain special voting shares until they transfer their common shares
After closing, new shareholders with single vote shares may earn special voting shares by holding their
common shares for three years

•

Shares listed in NY (with additional listing on Milan Stock Exchange)

•

Transaction to trigger withdrawal rights for Fiat S.p.A. shareholders (abstaining, dissenting or absent)

•



Cash-out option at a price equal to 6 months average price prior to publication of notice of call of Fiat EGM

Fiat S.p.A. creditors objection (60-day period after Fiat EGM)

•
•
•

EGM approval

•

Company targeting to execute transaction by year-end 2014

Withdrawal rights and creditors opposition period
Closing subject to certain conditions, included a €500mn cap to cash-out resulting from exercise of
withdrawal rights and creditors’ opposition


4

New corporate identity

January 29, 2014


5

FY 2013
Executive summary

•
•

Worldwide shipments up 3% over prior year to 4.4mn units



Growth in NAFTA & APAC more than offsetting moderate contractions in LATAM and EMEA

Key financial metrics








Italy 7%

EMEA
19%

Revenues at €87bn

Others
1%

Trading profit at €3.4bn

Components
7%

EBIT at €3.0bn
Net profit at €2.0bn (€0.9bn excl. unusuals)

Luxury
brands
4%

Net industrial debt at €6.6bn
Total available liquidity at €22.7bn

•
•

Jeep set all-time global sales record of 732k vehicles

•

NAFTA
53%
APAC
5%

Successfully active in capital markets

•
•

(1)

LATAM
11%

WCM program’s “Gold” level awarded to Pomigliano d’Arco, Tychy
and Bursa plants





Fiat bond issuances totaling ~€2.9bn and repayment of a €1bn bond at maturity
Fiat renewed its 3-year €2.0bn RCF, subsequently increased to €2.1bn

NAFTA
65%

Chrysler re-priced twice its $3.0bn term loan and $1.3bn undrawn credit facility
(aggregate savings of ~$70mn per annum)
LATAM
18%

New or extended partnerships in car financing



New private-label financing arrangement in U.S. with Santander, extended partnership in
Europe with Crédit Agricole, renewed agreement in Brazil with Itaú Unibanco

Guidance for 2014






Components
6%

Revenues of ~€93bn

APAC
11%

Trading profit in €3.6-4.0bn range
Break-even

Net profit of ~€0.6-0.8bn
Net industrial debt in €9.8-10.3bn

range1

Includes cash outflows for Jan 21, 2014 closing of purchase of remaining 41.5% minority stake in Chrysler from VEBA (€2.7bn) and €0.3bn due to
adoption of IFRS 11

January 29, 2014


EMEA mass-markets brand
Luxury brands
Other and Eliminations

~(€0.5)bn
~ €0.5bn
~(€0.1)bn

6

FY 2013 financial highlights
Net revenues (€mn)

83,957

Net profit (€mn)

86,816
1,951

• Group revenues up 3%
 Increases in NAFTA and APAC partly offset
by reductions in LATAM and EMEA
 Strong top-line growth for Luxury brands

• Positive impact of €1.5bn from recognition of net deferred
tax assets related to Chrysler partly offset by €0.5bn in net
unusual charges

896

 Normalized net profit of €943mn (€1,140mn for 2012)

 Components in line with 2012 (+4% at
constant exchange rates)

 Excl. unusuals and positive deferred tax impact, net loss of
€911mn (€787mn last year) for Fiat excl. Chrysler
FY ‘12

FY ‘13

FY ‘12

(1)

FY ‘13

Trading profit (€mn)
Dec 31 ‘12

3,541

Dec 31 ‘13

 Strong Q4 cash-flow generation of €1.4bn from Chrysler
and €0.3bn from Fiat excl. Chrysler

 NAFTA: €2,220mn (+4.8% margin)
 APAC: €358mn (+7.7% margin)

• Slight increase for the year including €0.2bn of equity
investments
 Excluding equity investments, cash-flow for the year
positive by €0.1bn

3,394

• Mass-market brands
 LATAM: €619mn (+6.2% margin)

• Cost of income taxes of €557mn, net of recognition of
deferred tax assets (€244mn for Fiat excl. Chrysler)

Net industrial debt (€bn)

• Group trading profit down 4%, or +€0.1bn vs.
2012 on a currency adjusted basis
• Trading profit for 2013 reflected €0.3bn in
higher R&D amortization

• €904mn attributable to the owners of the parent

4.2%
margin

• Group Capex at €7.4bn, substantially in line with 2012, but
3% higher at constant exchange rates

3.9%
margin

 EMEA: -€470mn (-2.7% margin)
• Luxury Brands: €535mn (+14.0% margin)

FY ‘12

(1)

6.5

6.6

20.8

FY ‘13

22.7

• Components: €201mn (+2.5% margin)

EBIT (€mn)
• Mass-market brands

 NAFTA: €2,290mn

3,404

2,972

2.9

3.0

 LATAM: €492mn
 APAC: €318mn

17.9

19.7

 EMEA: -€520mn
FY ‘12

(1)

Restated for adoption of IAS 19 as amended
(Trading Profit/EBIT reduced by €273mn; Net Profit reduced by €515mn)
Note: Graphs not to scale
(1)

January 29, 2014

• A €1.9bn increase over Dec 2012, mainly reflecting positive
contribution from financing activities throughout the year,
net of €1.0bn in negative currency translation effects
 In 2013, Fiat issued a total of €2.9bn in bonds and repaid
€1.0bn at maturity

 Fiat excl. Chrysler at €12.1bn (€11.1bn at 2012-end)

• Luxury brands: €470mn
• Components: €146mn

Liquidity (€bn)

FY ‘13

Dec 31 ‘12

Dec 31 ‘13

 Chrysler at €10.6bn (€9.8bn at 2012-end) with a €0.6bn
negative impact from currency translation

Undrawn committed credit lines
Cash & Mktable Securities


7

FY 2013 financial highlights
Performance by segment

MASS-MARKET

84.0 86.8

•

BRANDS

Group revenues up 3% (+7%
at constant FX rates)




NAFTA

3.1 4.6

LATAM

2.9 3.8

APAC

EMEA

Ferrari &
Maserati

FY 2012

MASS-MARKET
2,491



Components

EBIT before unusuals
• 2012: €(543)mn
• 2013: €(325)mn

392 470

492 255 318

NAFTA

(1)

LATAM

(737)
APAC

Other &
Eliminations

(520)

EMEA

3,404

2,972

•

Components

Other &
Fiat Group
(1)
Eliminations

(1)

2012 restated for adoption of IAS 19 as amended (NAFTA: -€250mn; LATAM: - €7mn; Components: -€3mn; Eliminations and Adjustments: -€14mn.
EMEA losses reduced by €1mn)
Note: Graphs not to scale; Numbers may not add due to rounding


NAFTA -8% (-9% before
unusuals)



(187) (224)
(1)

EBIT -13% (ex-unusuals
down 4%)



165 146

(1)

January 29, 2014

Components revenues in line
with 2012 at €8.1bn (+4% at
constant FX rate)

Fiat Group

• 2012: €(131)mn
• 2013: €(82)mn

• 2012: €392mn
• 2013: €535mn

Ferrari &
Maserati

Luxury brands up 31% (Ferrari
+5%, Maserati more than
doubling to €1.7bn on strength
of new models)

• 2012: €3,648mn
• 2013: €3,491mn

• 2012: €176mn
• 2013: €206mn

1,025

• 2012: €2,443mn
• 2013: €2,219mn

(2.5) (2.9)

FY 2013

BRANDS

• 2012: €1,056mn
• 2013: €619mn

2,290

8.0 8.1

EMEA down 2% mainly reflecting
volume decline in H1



11.1 10.0

17.8 17.4

LATAM down 10% in nominal
terms (+1% at constant FX rate)



43.5 45.8

NAFTA (+5% or 9% at constant
FX rate) and APAC (+48%) up
on the back of higher volumes

LATAM -52% (-41% before
unusuals)





APAC +25%



Components -12% (+17%
before unusuals)

EMEA reduced losses by €217mn
Luxury Brands +20% (+36%
before unusuals)

8

Breakdown of unusual items
FY 2013

(€mn)
Asset write-downs mainly related to rationalization of architectures associated
with new product strategy
Repositioning of Alfa Romeo brand

(390)
(175)

Repositioning of Fiat brand

(90)

Maserati R&D due to change of platform for luxury SUV

(65)

Cast Iron business

(60)

Amendments to Chrysler’s U.S. & Canadian salaried defined benefit pension plans
Voluntary safety recall and customer satisfaction action related to certain older
Jeep products

166

(115)

Write-off of Equity Recapture Agreement right considering purchase of remaining
equity interest in Chrysler

(56)

Devaluation of Venezuelan bolivar

(43)

Other

(81)

TOTAL UNUSUAL ITEMS

(519)

of which cash-items

January 29, 2014

~(100)


9

FY 2013
From trading profit to net result
€mn
(unless otherwise stated)

Fiat Group
FY ’13

Worldwide total shipments
(Units ‘000)

Fiat excl. Chrysler

FY ‘12

(1)

FY ‘13

FY ‘12

4,352

4,223

1,900

1,920

Net Revenues

86,816

83,957

35,593

35,566

Trading Profit

3,394
3.9%

3,541
4.2%

246
0.7%

338
1.0%

97

107

103

110

EBIT BEFORE UNUSUALS

3,491

3,648

349

448

Unusual items, net

(519)

(244)

(537)

(261)

EBIT

2,972

3,404

(188)

187

EBITDA

7,546

7,538

2,113

2,304

(1,964)

(1,885)

(989)

(817)

1,008

1,519

(1,177)

(630)

943

(623)

736

(418)

1,951

896

(441)

(1,048)

943

1,140

(911)

(787)

% of revenues

Investment income, net

Financial charges, net

(2)

Pre-tax result
Taxes
Net result
Net result excl. unusuals

(3)

Note
(1)

Restated for adoption of IAS 19 as amended (Trading Profit/EBIT reduced by €273mn; Profit before Taxes reduced by €517mn and Net Profit reduced by €515mn )

(2)

“Financial charges, net” includes a €31mn gain from the mark-to-market value of stock option-related equity swaps (€34mn gain in FY ‘12)

(3)

Excluding net unusual charges and one-off net deferred tax assets

January 29, 2014


10

FY 2013 net industrial debt walk
Change in Net Industrial Debt
(104)

€mn

Cash Flow from operating activities, net of Capex
+79

7,961

1,464

313
(2,226)

3
(7,433)

(6,545)
December 31,
2012

•
•

Industrial
EBITDA

(excl. unusuals)

Financial
Charges
& Taxes 1

Change in
Funds &
Other

Working
capital

Capex

(183)
Investments,
Scope &
Other

(6,649)

(3)
Capital
increase
/Repos/
Dividends

FX
translation
effect

2

December 31,
2013

Net cash position of €0.2bn for Chrysler at year-end
Positive operating cash flow net of Capex in 2013, with €1.6bn cash absorption for Fiat excl. Chrysler more than
compensated by cash generation from Chrysler




Capex for Fiat excl. Chrysler at €3.9bn (+20% vs. 2012 or 25% at constant exchange rates), €3.6bn for Chrysler vs. €4.3bn in 2012
Positive working capital contribution from both Fiat excl. Chrysler (€1.1bn vs. €0.6bn absorption in 2012) and Chrysler (€0.3bn vs.
€1.3bn in 2012)

Net of equity swap and IAS 19 as amended
Opening balance on Jan 1, 2014 higher by €0.3bn due to adoption of IFRS 11
Numbers may not add due to rounding
1
2

January 29, 2014


11

Chrysler pension & OPEB status update
(IFRS, €bn)
OPEB FUNDED STATUS

PENSION PLAN FUNDED STATUS

Dec 31, 2012

Discount
Rate

Contributions

Earnings on
Plan Assets

Interest,
Service &
Other

Dec 31, 2013

Dec 31, 2012 Discount Rate

0.2
1.2

2.0

Benefit
Payments

Interest,
Service &
Other

Dec 31, 2013

(0.1)

(2.0)

0.2

(2.3)

0.5
(1.0)

(4.0)

(6.7)

WORLDWIDE WEIGHTED AVG. ASSUMPTIONS

2013

2012

WORLDWIDE WEIGHTED AVG. ASSUMPTIONS

2013

2012

Benefit Obligations at December 31:
- Discount Rate – Ongoing Benefits

4.69%

3.98%

Benefit Obligations at December 31:
- Discount Rate – Ongoing Benefits

4.87%

4.07%

• Pension and OPEB underfunded status reduced by €3bn primarily due to a higher discount rate,
return on plan assets and pension contributions during the year
• A ±100 basis point change in discount rate would impact pension obligations by ~€2.3bn
Note: 2012 restated for adoption of IAS 19 as amended

January 29, 2014


12

Chrysler refinancing transaction overview
Sources & uses and pro-forma capitalization

CASH SOURCES TO CHYSLER ($bn)

•

CASH USES FROM CHYSLER ($bn)

Add-on to existing Term Loan B

Refinance VEBA Trust Note

4.7

New Term Loan B

Accrued Interest

Chrysler Group LLC to
refinance VEBA Trust Note
in capital markets to
enhance earnings and cashflow

0.3



Add-on to Secured Senior Notes
TOTAL SOURCES

5.0

TOTAL USES

5.0



Note: Excludes estimated fees and expenses

FIAT GROUP
(€bn)


Actual
Dec 31, 2013

19.7

Post Fiat-VEBA
transaction

Post
refinancing

Pro-forma
Dec 31, 2013

•

16.9

16.9




(1)(2)

Derivatives Assets / (Liabilities)

0.4

0.4

0.4

Total Cash Maturities (Principal)

(28.7)

(28.7)

(28.7)

(8.8)

(8.8)

(10.2)

(14.2)

(14.2)

(16.2)

VEBA Trust Note

(3.4)

(3.4)

-

Other Debt

(2.3)

(2.3)

(2.3)

Asset backed financing, accruals and other adj.

(1.2)

(1.2)

(1.2)

(NET DEBT) / NET CASH

(9.8)

(12.6)

(12.6)

(1)

Industrial Activities

(6.6)

(9.5)

(9.5)

(2)

Financial Services

(3.1)

(3.1)

(3.1)

Bank Debt
Capital Market

No penalty for early
repayment

Key benefits of transaction

Pro-forma
Dec 31, 2013

(1)(2)

Reimbursement of principal
amount and accrued interest,
both tax deductible

•

Positive impact on earnings
with pre-tax interest expense
benefit of ~$130mm per year
Improving projected cash
flow by ~$2.5bn over next
three years on the back of
tax shield benefit and
reduced interest cost as well
as termination of principal
payments

No incremental debt at
Chrysler or Fiat level
Transaction consistent with
Fiat-Chrysler treasury
integration path

•

Including consideration of $1.75bn paid by
Fiat and $1.9bn special distribution paid by
Chrysler to its members
Including $175mm payment to VEBA Trust
which represents first of four equal annual
payments due to VEBA Trust through 2017


January 29, 2014


13

1

MASS-MARKET BRANDS BY REGION

2

LUXURY BRANDS

3

COMPONENTS

4

BUSINESS ENVIRONMENT OVERVIEW

5

2014 GUIDANCE

Mass-market brands
Highlights
FINANCIAL PERFORMANCE

•

Strong industry trend throughout the year supportive of
a robust level of sales for the Group, especially in U.S.
and Canada

•

Revenues for full year up 5% (+9% in USD terms) on
higher shipments

•

FY trading profit down 9% (-6% in USD terms)




Decrease reflecting content enhancements associated with
new models and higher industrial costs to support volume
growth as well increased R&D amortization partly offset by
higher shipments & improved pricing
Trading margin at 4.8%

COMMERCIAL PERFORMANCE & HIGHLIGHTS

•

Shipments
(k units)

Revenues
(€mn)

EBIT
(€mn)
(1)

(1)

FY ‘12

2,115

45,777 43,521

(€mn)

Trading Profit

FY ‘13

2,238

TOTAL NAFTA

(1)

2,220

2,491

2012 restated for adoption of IAS 19 as amended

January 29, 2014





U.S.: 1,876k vehicles, up 7% vs. last year
Canada: 269k vehicles, up 5%
Mexico & other: 93k vehicles

•

FY vehicle sales up 8% to 2,147k vehicles, above the
market in both U.S. (+9%) and Canada (+7%)

•

Best sales performers in U.S. & Canada combined

2,443

2,290

FY shipments up 6% vs. prior year, primarily reflecting
increased Jeep (Grand Cherokee, Wrangler and
Cherokee) and Ram 1500 pickup shipments

•




Double-digit growth for both Ram (+21%) & Dodge (+12%)
Jeep +3%: double-digit performance for all nameplates (no
availability of any D-SUV model until late October, bold
contribution to sales of all-new Cherokee in Q4)

U.S. dealer inventory at 79 days supply as dealers build
stock of newly-launched Jeep Cherokee


15

Mass-market brands
EBIT walk
€bn

•

Volume increase of 123k
vehicle shipments

•

Positive mix primarily
reflecting higher retail
volumes and lower fleet
volumes

•

Positive net price partly
driven by vehicle content
enhancements on recent
launches

•

Industrial costs impacted
by content enhancements
and higher depreciation &
amortization, partly offset
by purchasing savings

•

SG&A costs higher
primarily due to increased
advertising expense

•

Other primarily relates to
negative FX translation
impact (~80mn)

868

588
2,491
2,290
(1,456)

FY 2012

(1)

(1)

Volume
& Mix

Net price

Industrial
costs

(90)

SG&A

(111)

Investments /
FX / Other

FY 2013

2012 restated for adoption of IAS 19 as amended

January 29, 2014


16

Mass-market brands
Market trends & business dynamics
INDUSTRY VOLUME & OUTLOOK
(MN UNITS)

U.S.

•
15.9



•
3.9

3.7

0.38
Q4 '12

Q4 '13

Q4 '13

FY '13

•

(%)

13.0

13.2

11.4

10.9

Q1

Q2

Q3

Q4

2010
FY share

13.0%
9.2%

January 29, 2014

2011

Q1

Q2

Q3

Q4

Q4 up 11% vs. prior year

Strongest annual sales since 2007

Q1

Q2

Q3

2012
FY share

FY share

14.3%
10.5%

14.2%
11.2%

14.6%
11.4%


Q4 share up 50 bps to 11.4%
Q4 retail sales up 12%
Fleet mix down 70 bps to 21.7% of total sales in Q4

FY ‘13 industry recording highest FY levels
ever, up 4% vs. prior year
Q4 industry up 6%

FY ‘13 Group sales up 7% vs. prior year

•




Q4 sales up 7% vs. prior year



Q4

2013

FY share

December represented the 45th consecutive month
of year-over-year sales gains

FY ‘13 market share up 20 bps; retail sales up
14% and fleet mix down from 26% to 22%



•

8.8
Q4




CANADA

•
10.8

FY ‘13 Group sales up 9% vs. prior year





QUARTERLY MARKET SHARE

12.9

Q4 industry up 6% (cars +3%; trucks +9%)



1.8

0.40

Q4 '12

FY '13

12.6

FY ‘13 industry up 7% vs. prior year
(cars +4%; trucks +10%)

#2 selling manufacturer in Canada in 2013; best
FY sales since 2000

49 consecutive months of year-over-year sales
growth

FY ‘13 market share up 40 bps to 14.6%
17

Mass-market brands
Highlights

•

FY industry up 1.3% in the region with Argentina at
historical peak and Brazilian market at 3.6mn units,
similar to 2012 levels

•

FY revenues down 10% vs. prior year (+1% at
constant exchange rates)

•

Trading profit for full year reduced by 41% in
nominal terms (down 33% at constant FX rates)




TOTAL LATAM

Shipments
(k units)

Revenues
(€mn)

Trading Profit
(€mn)

EBIT
(€mn)

January 29, 2014

FY ‘13

950

979

9,973

•

1,025

Total Group FY shipments down 3% to 950k



•

Brazil: 785k shipments or down 7% (188k units in Q4, an
18% decline compared with exceptionally strong quarter in
2012, when Group reacted promptly to increased demand
in Brazilian market driven by government incentives)




1,056

492

Trading margin at 6.2%


11,062

619

Venezuela trading performance down mainly due to
reduced volumes and negative mix as FX restrictions
limited supply levels, while other LATAM markets improved



FY ‘12

Decrease mainly attributable to Brazilian ops due to input
cost inflation, also on weakening of Real affecting prices of
imported materials, unfavorable production mix and lower
volumes, as well as initial start-up costs for Pernambuco
plant

Argentina: 111k (+32%)
Other LATAM markets: 54k (+7%)

Disciplined management of company & dealer
inventory (stable at ~1 month-supply at year-end)


18

Mass-market brands
EBIT walk

•

€mn

•

1,025

•

64

Negative volume, reflecting
decline in shipments, and less
favorable market mix
Disciplined pricing behavior
supported by new product
initiatives, but unable to price
for inflationary increases
Industrial costs impacted by



Labor and input cost inflation also on
weakening of Real affecting prices of
imported materials (principally
within region)



Less favorable production mix
(Argentina vs. Brazil)



Start-up costs for Pernambuco plant

(111)
(257)

(37)

492
(192)

FY 2012

January 29, 2014

Volume
& Mix

Net price

Industrial
costs

SG&A

Investments
FX / Other


•
FY 2013

•

Higher SG&A driven by new
advertising campaigns in
Brazil
Other mainly relates to FX
translation effect (€85mn)
and unusual charges
(devaluation of Venezuelan
Bolivar of €43mn and asset
impairment for €75mn due to
streamlining of architectures
and models associated with
region’s refocused product
strategy)
19

Mass-market brands
REGIONAL OVERVIEW

(TOTAL LATAM;

MN UNITS)

Brazil

5.9

•

1.2

•
1.5
0.5

4.7

1.5
0.5

1.0
Q4 '12

•

FY '13

Passenger cars

LCVs

CARS





& LCVS; %)

Group retained its leadership in Brazilian market
for the 12th year with overall share of 21.5%,
270 bps ahead of nearest competitor

Group products continued to perform well



(PASSENGER

FY share compares with exceptional
performance in 2012



1.1
Q4 '13

FY industry down 1.5% (Q4: -3%) compared to
2012 which benefited from a period of higher
sales tax incentives

Combined 25% share of A/B segment, driven by
continued success of new Palio and Uno
Siena and Grand Siena posting a combined 25%
year-over-year sales increase
Strada up 5% boosted by contribution from
refreshed models launched in Q4

Argentina
22.3
10.2

23.6

21.7
11.6

Q4

Q1

Q2

Q3

Q4

20.0

9.3
Q1

Q2

Q3

10.5

Q4

Q1

Q2

Q3

2010

2012

2013

FY share

FY share

FY share

23.0%
11.2%

January 29, 2014

2011

FY share

22.2%
11.6%

23.3%
10.6%

Q4

21.5%
12.0%


•
•

FY market up 14% to 919k units (Q4: +23%)
Group FY sales up 31% to ~111k



Share up 140 bps facilitated by improved
customs clearance for vehicle imports

Update on IPI tax

•

Reduced IPI rates to gradually return to preincentive levels during 2014 with increases
varying by engine displacement, fuel and
vehicle type




A 1 to 2 p.p. increase occured on Jan 1
A further increase expected on Jul 1 (adding 2 to
5 p.p.)
20

Mass-market brands

•

Strong overall demand in the region (+9%) driven by
double-digit growth in China, partially offset by slowing
demand in India

•

FY revenues up 48%

•

•
TOTAL APAC

FY ‘13

FY ‘12

Shipments

163

103

Revenues

4,621
358

260

318

255

(€mn)

Trading Profit
(€mn)

EBIT
(€mn)

APAC industry reflects aggregate for key markets where Group
competes (i.e. China, India, Australia, Japan, South Korea)
January 29, 2014

Shipments up 58%, primarily driven by Jeep, Fiat and
Dodge brands

Trading profit for full year up 38% over 2012 levels



Increase primarily driven by higher volumes, partially offset
by increased industrial, SG&A expenses in line with regional
growth



Trading margin remained strong (7.7%)

FY EBIT up 25%, with trading profit improvement
partially offset by start-up costs incurred by Chinese joint
venture


3,128

(k units)



•

Strong retail sales (incl. JVs) throughout the year, up
73% to 199k vehicles in the region




Fiat brand volumes ~5x last year’s level primarily driven by
Fiat Viaggio in China



•

Jeep (~50% of total Group sales in APAC) up 26% over prior
year

Successful return of Dodge Journey, now Group’s fourth
best-selling vehicle in the region (after Fiat Viaggio, Jeep
Compass and Jeep Grand Cherokee)

Strong sales momentum continued in Q4, up 79% vs. a
year ago to 62k vehicles with December the best-selling
month in the region’s history


21

Mass-market brands
EBIT walk
€mn

•

•

(106)

FY 2012

January 29, 2014

Increased SG&A expenses
to support volume growth
and continued regional
expansion

•

Other primarily reflects
higher losses of Chinese ops
(€74mn) also including
start-up costs for launch of
Fiat Viaggio and Ottimo and
unfavorable FX impact

318

(72)

255

Increased industrial costs
due to higher R&D and fixed
manufacturing costs from
new product initiatives and
higher production volumes

•

(79)

Pricing impacted by
increasingly competitive
environment, particularly in
China

•

423

Volume/mix reflecting
higher shipments (+60k
units) and better mix
(higher penetration of
SUVs)

(103)

Volume
& Mix

Net price

Industrial
costs

SG&A

Investments /
FX / Other


FY 2013

22

Mass-market brands
INDUSTRY VOLUME1

(PASSENGER CARS & LCVS; MN UNITS)
26.1

REGIONAL OVERVIEW
FY Group sales (incl. JVs) significantly outperforming
industry (+9%) driven by strong performance in China
and Australia

7.0

6.1

CHINA

•
Q4 '12

Q4 '13

FY '13






(PASSENGER CARS & LCVS; %)

3.4%

2.2%

•

0.36%

0.54%

Q4

Q1

0.49%

0.27%
Q2

Q3

Q4

Q1

0.11%
Q2

Q3

0.38%
Q4

Q1

Q2

Q3

2010

2011

2012

FY share

AUS
IND
CHI
JAP

FY share

FY share

FY share

1.2%
0.9%
0.2%
0.2%

1.6%
0.7%
0.3%
0.3%

2.1%
0.4%
0.4%
0.3%

3.1%
0.4%
0.8%
0.4%

2013

1.Reflects aggregate for key markets where Group is competing (i.e. China, India,
Australia, Japan, South Korea)

January 29, 2014

FY share up 100 bps over 2012
Jeep +31% vs. prior year; Fiat, Alfa Romeo and LCVs at
4x last year’s level supported by consolidation of sales &
distribution activities into one Group company

INDIA

0.38%

0.21%

Fiat Viaggio, Jeep Compass and Dodge Journey as topsellers

Group sales up 53%, significantly outperforming a
moderately growing market (up 2%) in 2013




0.91%

0.55%

0.28%

0.31%

Share gain of 40 bps driven by Fiat Viaggio, Dodge
Journey and continued growth of Jeep brand

AUSTRALIA

1.7%

1.4%

FY Group sales up 125% posting the best sales
improvement in an industry growing 17%

Q4

•

Sales up 41% over same period in 2012 on the back
of establishment of new distribution network

JAPAN

•

FY Group sales up 6%, outperforming a largely flat
industry (gains driven by Chrysler, Abarth & Fiat)

SOUTH KOREA

•

Sales up 16% for the year in a market down 1%


23

Mass-market brands
Highlights

•

Although mixed across major markets, overall trading
conditions in EU27+EFTA remained weak throughout
2013 with initial signs of stabilization in H2




•
•

FY 2013 being the 6th consecutive year of decline



LCVs: FY industry flat vs. prior year

FY revenues slightly down due to lower shipments
Trading loss for FY reduced by €233mn, or 33%




TOTAL EMEA

Shipments
(k units)

Revenues
(€mn)

Trading Profit
(€mn)

EBIT
(€mn)

FY ‘13

FY ‘12

979

1,012

17,420

17,800

(470)

(703)

(520)

Note
1 Harbour definition: 235 days p.a. / 16 hours per day
2 Technical definition: 280 days p.a. / 3 shifts per day

January 29, 2014

•

(737)

Among major markets, the Q4 passenger car segment posted
2nd quarter of year-over-year gains, Italy still negative

Sequential quarter-over-quarter improvement in 2013, with
losses in Q4 reduced by 58% to €50mn

Better mix and cost efficiencies more than offsetting
headwinds still negative pricing

FY EBIT loss reduced by ~30%




Results from investments of €145mn (€160mn in 2012) with
decline also due to unfavorable FX impact of Turkish Lira
Unusual charges flat at €195mn (2013 including write-off of
previously capitalized R&D related to new model development
for Alfa Romeo products)


•
•

Overall shipments down 3%, or 33k units




Passenger cars down 34k (-4%) to 776k units, with decline
fully attributable to lower volumes in Italy
LCV shipments substantially unchanged at 203k units

Strict management of supply and demand function




Company & dealer inventories stable at ~2-months supply
Utilization rate at plants in EMEA, including JVs, nearly stable
(67% Harbor1 definition, or 42% Technical2 definition)


24

Mass-market brands
EBIT walk

•

Better mix (mainly 500
family & LCVs) partly
offset by negative
volume, reflecting decline
in passenger car
shipments

•

Price pressure continuing
(more accentuated in H1)

•

Improvement in industrial
costs driven by WCM
program efficiencies &
purchasing savings more
than offsetting higher
R&D amortization

•

Continued implementation
of cost efficiencies in
SG&A spending, mainly
related to reduced
advertising

•

€mn

Other includes
unfavorable FX and lower
contribution from JVs
(principally Tofas due to
FX conversion)

199
(26)

139

(737)

FY 2012

January 29, 2014

(520)

77
(172)
Volume
& Mix

Net price

Industrial
costs

SG&A

Investments /
FX / Other


FY 2013

25

Mass-market brands
Passenger cars: market trends & business dynamics
(MN UNITS)

EU27+EFTA

•

EU27+EFTA



3.0

Q4 '13

0.3

Q4 '12

FY '13

Q4 '13

FY '13


•
•

29.3

28.4

6.9

6.3

FY share at 6.0%

6.2

Share performance in EU27+EFTA ex-Italy
(3.3%) similar to prior year with share gains in
France, UK & Spain offset by share losses in
Germany and some other minor markets



27.7

Italian market weight further reduced, to 11%
of total European industry, or 500 bps lower
than pre-crisis levels in 2007

5.6

ITALY

EU27+EFTA
Q4

2010

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

Q2

Q3

Q4

2013

FY share

FY share

FY share

FY share

30.3%
7.7%

January 29, 2014

FY Group sales down 7% to 736k



(%)

28.8

Among major countries, positive comps for UK
(+11%) & Spain (+3%); negative performance
in Germany (-4%), France (-6%) with Italy
suffering the most (-7%)

1.3

0.3
Q4 '12

Positive year-over-year performance in H2
(+4%) unable to counter downwards trend in
H1 (-7%)



12.3

2.8

FY industry down 1.8% to 12.3mn units

29.4%
6.9%

29.6%
6.3%

28.7%
6.0%


•

Industry troughed at lowest levels since
1978, with decline moderating in H2 (Q4:
-3%)



Share down 90 bps as a combined result of
Group’s repositioning strategy and decision not
to engage further in value destructive price
competition, particularly in H2
26

Mass-market brands
LCVs: market trends & business dynamics
(MN UNITS)

1.57

EU27+EFTA

•

0.41

0.38

0.03
Q4 '12

Q4 '13

Q4 '13



0.10

Q4 '12

FY '13

0.03

FY '13

(%)

42.4

41.9

10.8

46.0

42.7

11.9

10.8

FY Group sales at 182k units, flat over
prior year

•

Fiat Professional FY share stable, with a
9.4% record share in EU27+EFTA excl.
Italy offsetting unfavorable market mix


10.4



EU27+EFTA
Q4

2010

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Mixed trend among major markets: for fullyear, Italy -15% (Q4: -2%), France -5% (Q4:
+3%), Germany -2% (Q4: +6%), but with
double-digit growth in UK (+12%) & Spain
(+11%), up 26% and 34% in Q4, respectively

•

QUARTERLY MARKET SHARE*

Q2

Q3

2011

2012

FY share

44.0%
12.7%

44.4%
12.5%

FY share

44.0%
11.6%



FY share

42.7%
11.7%

Q4

2013

FY share

* Due

to unavailability of official data for the LCV market since Jan 2011, figures reported beyond
that date are an extrapolation. Therefore, marginal discrepancies versus actual data may exist

January 29, 2014

FY market flat at 2012 levels, after a bad
start (Q1: -10%), then gradually
improving with Q4 being the first positive
year-over-year industry gain (+9%)


•

Share gains in Italy (+130 bps), UK (+140
bps) and Spain (+40 bps), while flat in
Germany & France
Unfavorable market mix penalized market
share in Q4 in EU27+EFTA, notwithstanding a
strong performance in Italy (+330 bps)
Ducato topped 100k units sold in European
market, recording 80 bps share gain in its
segment

Outside Europe, strong share
performance in Russia (+230 bps)

27

Luxury brands

2

Ferrari & Maserati

• FY revenue up 5% to €2.3bn


• FY revenue 2.2x last year’s level to €1.7bn

Shipments of street cars down 5% to 6,922 units,
consistent with strategic target to maintain production
below prior year’s level to preserve brand’s exclusivity



FY shipments of 15.4k units, up 148% vs. 2012 driven by
success of new Quattroporte and Ghibli launched in 2013


Shipments of ~8k for Quattroporte, ~3k for Ghibli with
order intake totalling 13k units apiece at Dec-end

12-cyl models up 19% on the back of F12 Berlinetta
released just 1 year ago; 8-cyl down 12%



GranCabrio & GranTurismo in line with 2012 (5k units)
USA: ~7k units (+138%), brand’s #1 market



North America (+9%) remained #1 market



Europe: UK in line with 2012, other major markets down





China: 4.3x last year’s volumes to ~4k units, the brand’s
second market



China, Hong Kong & Taiwan declined, partially offset by
increases in Japan



Europe: up 133% to ~3k units



Mid-East up 81% and APAC-ex China up 52% to ~2k
units in aggregate



First 20 units of special edition “LaFerrari” shipped



• FY trading profit up 9% to €364mn


Improvement reflecting better sales mix and contribution
from licensing and personalization program



Margin up 50 bps to 15.6%

USA
30%

European Top-5
35%

• FY trading profit at €171mn, €114mn higher

than a year ago, representing a 10.3% margin



Q4 at €123mn (€13mn in 2012) or 15.9% margin

European Top-4
13%

USA
45%

Japan
4%

Japan
5.5%

Others
22%

January 29, 2014

China,
Hong Kong
& Taiwan
8%

China
25%
Others
13%


28

Components

3

•
Operational Highlights
5,828

• Solid performance in

5,988

141

166

NAFTA and China with
modest gain in Europe;
Brazil stable at constant
exchange rates

780

FY ‘12

FY ‘13

FY ‘12



0
(13)

Cast Iron business unit
posted a 7% decrease in
volumes in Europe and
the Americas with lower
demand in all segments,
particularly light vehicles
Aluminum business
posted 13% increase in
volumes

FY ‘12

FY ‘13

Trading performance
primarily attributable
to volume declines

Revenues
substantially in line
with prior year

•

FY ‘13

•

•

FY ‘12

FY ‘13



688

• Order intake up 44% to
€2.6bn

Revenues down 12%

A €15mn increase in
trading profit
primarily driven by
Body Welding ops

•

Order intake for
System activities up
18% to €1.5bn

Note: graphs not to scale


•

FY revenues up 3% to €6bn (+6% at constant
exchange rates)







•

Lighting up 12% on the back of performance in China as well
as NAFTA where several new products launched in H2 2012
Electronic Systems up 7% primarily due to growth in sales
of “telematics and body” products
Powertrain business flat at constant exchange rates
After market business up 5% (+13% at constant FX rates)
with growth in Europe and Mercosur only partially offset by
decrease in NAFTA

Trading profit up 18%, a 40 bps margin increase
to 2.8%



1,482

1,463
33

FY ‘12

FY ‘13

Top-line growth only partially offset by higher industrial
costs associated with new product launches in NAFTA

January 29, 2014


48

FY ‘12

FY ‘13


29

4

Business environment overview

January 29, 2014


30

Jeep Cherokee starts strong; All-new Chrysler 200 revealed

All-New 2015
Chrysler 200

All-New
Cherokee
(Launched end of October 2013)

17
Worldwide sales
(000’s)

11

•
•
•

1
Oct

Nov

Dec

•

Over 29k sold worldwide (mostly NAFTA)
in just over 2 full months on sale

•

Presented at 2014 Detroit Auto Show

•

Benchmark features in its category

Available in H1 2014
Derived from common Compact U.S. Wide
architecture



First mid-size sedan with a standard 9-speed automatic
transmission

Strong market reception supporting 64k
shipments since shipment hold released in
late October




Expected fuel economy rating of 35 MPG highway

•

Competes in largest SUV segment in
NAFTA (~2.0mn vehicles)



•

Two world-class engines (Pentastar V-6 with best-in-class
295hp) & 2.4L MultAir®2 Tigershark (I-4 engine, 184hp)

First mid-size SUV with a 9-speed
automatic transmission

•

Best-in-class capability with new
Trailhawk model

January 29, 2014

•

Available all-wheel-drive system with automatic fully
disconnecting rear axle

Production at Sterling Heights assembly plant in
Michigan



More than $1bn investment (product and plant), including
all-new paint shop and fully robotic body shop


31

Strengthening product line-up, preparing for upscale move
KEY

LAUNCHES IN

NEW STRADA

•

STATUS

Best-selling nameplate
in its segment



•

Q4

UPDATE OF NEW PLANT

LOCATED IN GOIANA
(STATE OF PERNAMBUCO)
NORTHEAST BRAZIL

50% segment share in
Brazil for FY 2013

Launched two
refreshed models




Single-cab Strada
launched in market in
October
Ramp-up of production
for double-cab version
started in October

•

Investment for new complex started in Q4 2012

•
•

Expanding Uno
family
Significant
improvements
compared to prior
model




Increased cargo
capacity
New and more fuelefficient engines

January 29, 2014

•

Capex spanning through 2016 (~€2bn in 2012-14 period)
with Fiat to receive financing for up to 80% of total
investment


ALL-NEW FIORINO



In addition, once production begins, project will also benefit
from tax incentives for a period of 5 years

Start-of-production expected in H1 2015




•

Initial annual capacity of 200k vehicles for domestic market
and export
Small-Wide architecture to strengthen mid-size car
offerings

Expandable, flexible world-class production site






Integrated international supplier park
Product engineering and testing facilities
Over 80% of components localized
Favorable logistics infrastructure (port, railway…)


32

Significant sales up for Fiat brand in China
APAC SALES GROWTH BY BRAND
Vehicles (000s)

20

16

8

FIAT BRAND IN CHINA
199

•

Fiat Viaggio

 Group best-selling
vehicle in APAC in
2013

41

 Positive market

acceptance driven by
design and equipment
levels

115

 Viaggio One-year Anniversary Special Edition and Shining
Edition debuted at Chengdu Auto Show and Guangzhou
Auto Show, respectively

•

FY SALES +73%

Fiat Ottimo

 Hatchback version of
Fiat Viaggio, to roll
out to Chinese
dealerships in early
2014

•

 Second Fiat vehicle

FY ‘13

FY ‘12

locally produced in
China

Fiat brand sales up 160%, accounting for
44% of total sales increase

 Global premiere at Guangzhou Auto Show in November
 7-speed dual-clutch transmission powered by 1.4T-JET

 Fiat Viaggio continuing to gain momentum

•

•

Strong performance of Jeep brand with 17
consecutive quarters of year-over-year
growth

Dodge brand sales boosted by re-introduced
Journey

January xx, 2014

engine

•

Fiat dealership network continued to expand,
nearly doubling to 200+ points of sale in 2013,
covering a total of 126 cities across China


33

Moving on & up
RE-FOCUS

•

FIAT

TRADING PERFORMANCE

BRAND

(€MN)

Structural shift of brand towards upper layer of core
segments







•

AND REALIGNMENT OF

2012

Expanded 500 family with 500L, Trekking & Living variants,
adding to iconic hatchback model (1+mn units sold in Europe
since launch in 2007)

Q1

Q2

2013

Q3

Q4

FY

500 family now representing 33% of brand sales (20% in 2012)
Segment leadership in FY 2013 for 500 (A-Segment, first-time
since launch) and 500L (Compact-MPV) in EU27+EFTA

(157)
(207)

3 out of 4 Fiat 500s sold outside Italy

(138)

29%

Launch of 500X model in H2 2014

24%

(50)

(98)
(165)
(238)

(120)
58%

31%

Select utility vehicles to round out brand offerings, with
Panda second best-selling vehicle in A-segment

(470)

(703)

33%
improvement

Sustained improvement driven by:

•
•
•

Enhancement of industrial cost efficiencies

•
January 29, 2014

More favorable mix driven by product portfolio
repositioning strategy

Continued tight grip on G&A costs


Optimization of advertising spending by rechannelling resources to 500 family while
reducing overall spending

34


4

Market outlook (mn units)
NAFTA

APAC

LATAM
5.9

4.6

FY '13

EU27+EFTA

1.3

4.7

>16

5.9

1.2

15.9

EMEA

FY '14E

26.1

~27.0

1.6
FY '13

FY '14E

Passenger cars

1.8

1.5
12.3

FY '13

LCVs

FY '13

FY '14E

~1.8

12.4

FY '14E

Passenger cars

LCVs
~0.1

0.12

FY '13

FY '14E

Upwards trend for U.S.
industry projected for 2014,
but at lower rate than prior
years



Both car and truck segments
expected to increase

•

Canada market in 2014
expected to be substantially
in line with record levels
reached in 2013

LATAM market in 2014
expected to perform in line with
prior year

•

2013 Canada market was
the highest ever

•

•

•

Brazilian industry to grow
~3% underpinned by a
projected GDP growth in line
with prior year
Argentina industry to decline
double-digit due to import
restrictions and higher sales
tax on high-end segments

•

Industry demand projected
up ~4% driven by strong
growth in China, India,
South Korea and Australia,
offset by contraction in
Japan
Group targeting to increase
40% in 2014 retail sales
(incl. JVs)



Performance of Fiat, Jeep
and Dodge brands to play
key role in Group expansion
activities

~1.4

FY '12

•

1.4

FY '13E

Overall industry (passenger car
& LCV segments in aggregate)
projected stable

•

•

Passenger cars



Slight growth in EU27+EFTA
(+0.5%) vs. prior year



Italy +3%; Germany +4%

LCVs




Mid-single digit
contraction in EU27+EFTA
Italy to perform in line
with passenger car
segment

Note: APAC reflects aggregate for key markets where Group competes (i.e. China, India, Australia, Japan, South Korea)
January 29, 2014


35

4

Group shipments (excl. JVs)

(units in thousands)

(units in millions)

4,223

Luxury
+150%
APAC
+85%

4
26

+8%

267

543

248
Q4 ‘12

EMEA
-5%

LATAM
-3%

2,238

1,012

EMEA
-3%

Luxury

>0.2

APAC

950

NAFTA
+6%

0.05

163

22

0.9-1.0

LATAM

~2.4

NAFTA

979

~1.0

EMEA

FY ‘13

FY ‘14E

10

227

LATAM
-15%

NAFTA
+20%

103

Luxury
+57%
APAC
+58%

2,115

1,172

4.5-4.6

4,352

979

14

1,088

+3%

48

651

236
Q4 ‘13

FY ‘12

Note: Numbers may not add due to rounding; Graphs not to scale
January 29, 2014


36

5

2014 Guidance for the Group
(€bn, except EPS)
REVENUES

NET INCOME
2.0

CHANGES RELATIVE TO 2013
1.5

~93

0.2-0.6

87

0.9
0.6-0.8
(0.5-0.7)

(0.5)

2013

2013

2014E

Profit to the owners
of the Parent

Recognition
of deferred
tax assets

Unusuals

2013
Normalized
Net income

Taxes
(principally
deferred)

2014E

0.9

0.1

0.5-0.7

0.74

EPS

0.10

0.44-0.60

TRADING PROFIT

NET INDUSTRIAL DEBT
Year-end
2013
(Pro-forma)

Year-end
2013

Year-end
2014E

CHANGES

3.4

Trading
profit

3.6-4.0

RELATIVE TO

2013

(1)

Industrial EBITDA: higher
Financial charges: stable
(6.6)

Positive change in Working Capital: lower

(2.7)

2013

2014E

Capex: higher
(0.3)

(9.7)

Purchase of
Adoption of
remaining 41.5%
IFRS 11
minority stake in
Chrysler from VEBA

(1)

Includes first payment of $175mn to VEBA
Trust under MoU regarding industrial
cooperation principles with UAW

(9.8-10.3)

Note: Numbers may not add due to rounding; Graphs not to scale
January 29, 2014


37

Supplemental financial measures
Fiat Group monitors its operations through the use of various supplemental financial measures that may not be
comparable to other similarly titled measures of other companies. Accordingly, investors and analysts should
exercise appropriate caution in comparing these supplemental financial measures to similarly titled financial
measures reported by other companies. Fiat Group management believes these supplemental financial
measures provide comparable measures of its financial performance based on normalized operational factors,
which then facilitate management’s ability to identify operational trends, as well as make decisions regarding
future spending, resource allocations and other operational decisions.
Fiat Group’s supplemental financial measures are defined as follows:



Trading Profit (Loss) is computed starting with Net Revenues less operating costs (cost of sales, SG&A,
R&D costs, other operating income and expenses)



Earnings Before Interest, Taxes (“EBIT”) is computed starting from Trading profit (loss) and then
adding restructuring costs, other income/expenses that are unusual in the ordinary course of business
(such as gains and losses on the disposal of investments) and the Result from investments



Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is computed starting
with EBIT and then adding back depreciation and amortization expense



Net Industrial Debt is computed as debt plus other financial liabilities related to Industrial Activities less
(i) cash and cash equivalents, (ii) current securities, (iii) current financial receivables from Group or
jointly controlled financial services entities and (iv) other financial assets. Therefore, debt, cash and
other financial assets/liabilities pertaining to Financial Services entities are excluded from the computation
of Net Industrial Debt

January 29, 2014


39

Chrysler
Net income reconciliation (from IFRS to US GAAP)

(1)

Twelve Months
ended December 31, 2013

EURO
(mn)

(895)

472

626
68
(201)

(166)

(218)

(316)

Other

(3)

(674)

(150)

Pension/OPEB adjustments

3,176

52

Reconciling Items:
Capitalization of development
costs, net of amortization (2)

USD
(mn)

2,392

Chrysler Net Income – IFRS (1)

(419)

2,076

2,757

(2)

(3)

Unusual Items:
Pension plan changes

(4)

Chrysler Net Income - US GAAP

January 29, 2014


(4)

Including unusual items and restructuring
Under IFRS, development costs for vehicle
programs are capitalized as intangible assets if
the development costs can be measured
reliably and the economic feasibility of the
product
supports
the
view
that
the
development expenditure will generate future
economic benefits. Capitalized development
costs include all direct and indirect costs that
are directly attributable to the development
process.
These costs are subsequently
amortized to expense on a straight-line basis
from the start of production over the
estimated production cycle. Under US GAAP,
with the exception of certain software
development costs, development costs are
expensed as incurred in accordance with ASC
730, Research and Development Costs
Under IFRS, net interest cost is calculated by
multiplying the net defined benefit liability
(asset) by the discount rate used at the start
of the annual period to measure the defined
benefit liability (asset). Under U.S. GAAP,
entities recognize the interest cost on the
present value of the defined benefit liability
(asset), using the discount rate, and an
expected return on plan assets (EROA), which
is the expected long-term rate of return on
the market value of assets. Since the EROA is
generally higher than the discount rate used
to determine interest cost on the defined
benefit obligation, the overall cost reflected in
the income statement is generally higher
under IFRS as compared to U.S. GAAP
Under U.S. GAAP, curtailment gain and plan
amendments were a net reduction to pension
obligation
offset
in
accumulated
other
comprehensive income
40

Chrysler
Net debt reconciliation (from IFRS to US GAAP)

Dec 31, 2013

EURO
(mn)

USD
(mn)

Chrysler Net Debt - IFRS

(215)

(296)

Unamortized purchase accounting
adjustments (1)

(424)

(584)

(218)
101
(541)

(301)
138
(747)

(756)

(1,043)

Classification and other differences:
Accrued interest
Other

Net Industrial Debt - US GAAP
(1)

January 29, 2014

In connection with the May 24, 2011 transaction, all financial liabilities were re-measured to their fair
value as of the date of consolidation. The unamortized balance primarily relates to the fair value
adjustment on the VEBA Trust Note


41

Financial charges breakdown
FY 2013

FY 2012

Avg.
Outstanding
(€bn)

Gross Industrial Debt
Industrial Cash & Net
Intersegment Financial
Receivables (2)
Net Industrial Debt

(3)

IAS 19

Avg.
Outstanding
(€bn)

Rate
(%)

P&L
(€mn)

7.0%

(900)

(12.0)

7.1%

(849)

(13.9)

6.6%

(920)

(13.7)

7.2%

(990)

(26.8)

Other Financial Debt

(1)

P&L
(€mn)

(12.9)

Capital Market

Rate
(%)

6.8%

(1,820)

(25.7)

7.2%

(1,839)

19.4

0.8%

156

19.3

1.2%

230

(1,664)

(6.4)

(7.4)

(1,609)

(371)

(388)

Equity Swap

31

34

Others

40

78

(1,964)

(1,885)

(interest cost on pension & OPEB)

(4)

Net Financial Charges
Note

Include expense incurred in relation to sale of receivables, committed lines fees, hedges
Net of charges on sales of receivables intersegment and floor plan fees
Excluding derivatives fair values
(4) Include FX gain/losses, interest cost capitalized (IAS23), bank fees and other financial charges
(1)
(2)
(3)

January 29, 2014


42

Detailed cash flow
(€mn)

Fiat Group
Q4 2013

Fiat Group

Q4 2012

(1)

(8,307)

(6,694)

1,296

224

1,227

1,028

(365)

407

2,158

1,659

1,672

590

3,830

2,249

(2,175)

(2,254)

1,655

(5)

(23)

122

1,632

117

(1)

2

27

30

1,658

149

(6,649)2

(6,545)

FY 2013
Net Industrial (Debt)/Cash beginning of period

Fiat ex cl. Chrysler

FY 2012

(1)

FY 2013

FY 2012

(1)

(6,545)

(5,529)

(5,048)

(2,449)

Net Income

1,951

896

(441)

(1,048)

D&A

4,572

4,132

2,299

2,115

Change in Funds & Others

(475)

617

(679)

(36)

6,048

5,645

1,179

1,031

1,464

694

1,129

(581)

7,512

6,339

2,308

450

(7,433)

(7,530)

(3,860)

(3,219)

79

(1,191)

(1,552)

(2,769)

(183)

292

(308)

247

(104)

(899)

(1,860)

(2,522)

(3)

(36)

3

(36)

3

(81)

41

(41)

(104)

(1,016)

(1,816)

(2,599)

(6,649)2

(6,545)

(6,864)

(5,048)

Cash Flow from Op. Activities bef. Chg. in W.C.
Change in Working Capital
Cash Flow from Operating Activities
Tangible & Intangible Capex
Cash Flow from Operating Activities net of Capex

Change in Investments, Scope & Others
Net Industrial Cash Flow
Capital Increase / Share Repurchases / Dividends
FX Translation Effect
Change in Net Industrial Debt
Net Industrial (Debt)/Cash end of period

(1)

Restated for adoption of IAS 19 as amended

(2)

Opening balance on Jan 1, 2014 higher by €0.3bn due to adoption of IFRS 11

Note: Numbers may not add due to rounding
January 29, 2014


43

Fiat excl. Chrysler
Net debt breakdown (€bn)

Sept. 30, 2013

Dec. 31, 2013

Cons.

Fin.

19.1

15.9

3.3

(0.3)

(0.3)

(8.6)
10.2
*

Ind.

Cons.

Ind.

Fin.

Gross Debt*

20.3

17.0

3.4

-

Derivatives M-to-M, Net

(0.3)

(0.3)

-

(8.4)

(0.2)


(10.0)

(9.8)

(0.2)

7.1

3.1

Net Debt

10.0

6.9

3.1

Net of intersegment receivables

January 29, 2014


44

Fiat excl. Chrysler
Gross debt (€bn)
Outstanding
Sept 30, ‘13

Outstanding
Dec. 31, ‘13

18.4
5.8
11.4
1.2

Cash Maturities
Bank Debt
Capital Market
Other Debt

19.3
6.2
11.9
1.2

0.4

Asset-backed financing

0.6

0.0
0.0
0.4

ABS / Securitization
Warehouse Facilities
Sale of Receivables

0.0
0.0
0.6

0.3

Accruals & Other Adjustments

0.4

19.1

Gross Debt

20.3

(8.6)


(10.0)

(0.3)

Derivatives (Assets)/Liabilities

(0.3)

10.2

Net Debt

10.0

2.1


2.1

January 29, 2014


45

Chrysler
Gross debt (€bn)
Outstanding
Sept 30, ‘13

Outstanding
Dec 31, ‘13

9.6
2.6
2.4
4.7

Cash Maturities
Bank Debt
Capital Market
Other Debt

9.4
2.5
2.3
4.5

0.0

Asset-backed financing

0.0

0.0

ABS / Securitization

0.0

0.1

Accruals & Other Adjustments

0.2

9.8

Gross Debt

9.5

(8.5)


(9.7)

(0.1)

Derivatives (Assets)/Liabilities

(0.1)

1.2

Net Debt

(0.2)

1.0


0.9

January 29, 2014


46

Debt maturity schedule
(€bn)

Outstanding
Dec. 31, ‘13
6.2
11.9
1.2

Fiat ex Chrysler

2014

2015

2016

2017

2018

Beyond

Bank Debt

2.5

1.7

0.9

0.4

0.4

0.4

Capital Market

2.3

2.0

2.3

2.2

1.9

1.3

Other Debt

0.8

0.0

0.0

0.0

0.0

0.3

5.6

3.7

3.2

2.7

2.2

1.9

19.3

Total Cash Maturities

10.0


2.1
12.1

Total Available Liquidity

3.6

Sale of Receivables (IFRS de-recognition compliant)

2.2

of which receivables sold to financial services JVs (FGA Capital)

Outstanding
Dec. 31, ‘13

Chrysler

2014

2015

2016

2017

2018

Beyond

2.5

Bank Debt

0.0

0.0

0.0

2.1

0.1

0.2

2.3

Capital Market

0.0

0.0

0.0

0.0

0.0

2.3

4.5

Other Debt

0.3

0.3

0.4

0.4

0.4

2.7

0.4

0.4

0.4

2.5

0.5

5.3

9.4
9.7
0.9
10.6

Total Cash Maturities
Total Available Liquidity

Note: Numbers may not add due to rounding; total cash maturities excluding accruals
January 29, 2014


47

Contacts

GROUP INVESTOR RELATIONS TEAM

Marco Auriemma

 +39-011-006-3290

Maristella Borotto

 +39-011-006-2709

Francesca Ferragina

 +39-011-006-2308

Timothy Krause

 +1-248-512-2923

Paolo Mosole

Vice President

 +39-011-006-1064

fax: +39-011-006-3796

email:
websites:

January 29, 2014

investor.relations@fiatspa.com
www.fiatspa.com
www.chryslergroupllc.com


48

Fiat Chrysler q4 fy 2013 results

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