26 January 2017

FCA: 2016 Full Year and Fourth Quarter Results

 

FCA delivers record 2016 results. Adjusted EBIT of €6.1 billion, up 26% with 5.5% margin, up 120 bps. Adjusted Net Profit of €2.5 billion, up 47% and Net Profit of €1.8 billion. Net Industrial Debt reduced to €4.6 billion. Guidance for 2017 confirms conviction in achievement of 2018 targets.

  • Worldwide combined shipments (1) of 4,720 thousand units, consistent with prior year; Jeep combined shipments (1) up 9% to 1,424 thousand units
  • Net revenues of €111 billion, in line with 2015
  • Adjusted EBIT (2) increased 26% to €6,056 million, with all segments profitable and improving year‐overyear
  • Adjusted net profit (2) increased 47% to €2,516 million; Net profit (3) of €1,814 million, significant increase from €93 million in 2015
  • Net industrial debt (2) at €4.6 billion, €0.5 billion improvement from prior year‐end
  • Market share in Europe up 40 bps to 6.5%; remained market leader in Brazil with 18.4% share and maintained share in U.S. (4) at 12.6% 

 

Adjusted EBIT margin up 100 bps to 7.4%

  • Decrease in shipments primarily due to planned phase‐out of the Chrysler 200 and Dodge Dart
  • Net revenues decrease due to lower shipments, partially offset by favorable vehicle mix
  • Adjusted EBIT increase primarily due to improved vehicle mix, purchasing savings and lower warranty costs, partially offset by lower shipments, increase in product costs for content enhancements and higher manufacturing costs
  • Adjusted EBIT excludes total net charges of €667 million, primarily relating to:
  • €414 million charge mainly due to an expansion of the scope of the Takata airbag inflator recalls announced in May 2016
  • 156 million in first half of year for incremental costs related to the implementation of the Group's plan to realign existing capacity to better meet market demand for pickup trucks and SUVs
  • €132 million estimated net costs associated with a recall for which costs are being contested  with a supplier; although FCA believes the supplier has responsibility for the recall, only a partial recovery of the estimated costs has been recognized pursuant to a cost sharing agreement
  • €29 million gain related to pension settlements in December 2016 

 

Positive Adjusted EBIT despite continuing poor market conditions

  • Decrease in shipments reflects poor market conditions in Brazil due to continued macroeconomic weakness, partly offset by improvement in Argentina
  • Decrease in Net revenues with lower shipments, partially offset by favorable vehicle mix mainly from all‐new Fiat Toro and all‐new Jeep Compass
  • Adjusted EBIT increase primarily as a result of favorable vehicle mix and a decrease in selling, general and administrative costs driven by continued cost reduction initiatives to right‐size to market volume, which were partially offset by lower shipments and higher product costs driven by inflation and new products
  • Adjusted EBIT excludes total charges of €142 million primarily relating to restructuring costs to adjust the workforce requirements to current market conditions of €68 million, asset impairments of €52 million and €19 million related to the remeasurement of net monetary assets in Venezuela after adoption of the new floating exchange rate 

Joint venture fully operational with production of three Jeep SUVs

  • Decrease in shipments due to transition to local Jeep production in China through China JV; combined shipments (which include JV produced units) up 23% to 233 thousand units
  • Net revenues decrease primarily as a result of lower imported volumes in China due to transition to local Jeep production, partially offset by favorable vehicle mix from imported vehicles and increased sales of components
  • Adjusted EBIT increase mainly due to favorable mix on imported vehicles, lower marketing expenses (now incurred by China JV) and improved results from China JV, partially offset by lower net price due to incentives for completion of the sell‐out of discontinued and other imported vehicles and higher industrial costs due to negative FX transaction effects
  • Adjusted EBIT excludes total net charges of €44 million, primarily relating to asset impairments of €109 million mainly for the locally produced Fiat Ottimo and Viaggio (in connection with capacity realignment to SUV production in China) and a net gain of €55 million reflecting costs and initial insurance recoveries related to the Q3 2015 Tianjin (China) port explosions 

Significant profitability improvement together with market share growth

  • European market share (EU28+EFTA) for passenger cars up 40 bps to 6.5% (up 60 bps to 28.9% in Italy) and for light commercial vehicles (LCVs)(8) up 30 bps to 11.6% (down 190 bps to 43.8% in Italy) Passenger car shipments up 13% to 1,018 thousand units and shipments of LCVs up 19% to 288 thousand units
  • Net revenues increase primarily due to higher volumes and favorable vehicle mix mainly driven by all‐ new Fiat Tipo family, all‐new Alfa Romeo Giulia and Jeep Renegade
  • Adjusted EBIT increase mainly driven by higher Net revenues, purchasing and manufacturing efficiencies, improved results from joint ventures, partially offset by higher advertising to support new product launches and higher research and development costs 

Adjusted EBIT margin more than doubled to 9.7%, with second‐half margin of 12.0% 

 

  • Increase in shipments primarily driven by launch of all‐new Maserati Levante with significant increases in all regions: China (+91%), Europe (+37%) and North America (+14%)
  • Net revenues increase primarily due to higher shipments and favorable vehicle and market mix Adjusted EBIT improvement resulting from increase in Net revenues, partially offset by increase in industrial costs and commercial launch activities 

 

Continued improved performance with Adjusted EBIT margin up to 4.6%

  • Net revenues slightly down primarily due to lower volumes at Comau and negative FX transaction effects, largely offset by volume increases at Magneti Marelli
  • Adjusted EBIT increase primarily due to favorable mix, partially offset by higher industrial costs Adjusted EBIT excludes total net charges of €66 million primarily relating to asset impairments of €49 million and restructuring costs of €25 million
  • Magneti Marelli noncaptive Net revenues at 69%, in line with 2015 

 

 

This document, and in particular the section entitled “2017 Guidance”, contains forwardlooking statements. These statements may include terms such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”, or similar terms. Forwardlooking statements are not guarantees of future performance. Rather, they are based on the Group’s current expectations and projections about future events and, by their nature, are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including: the Group’s ability to reach certain minimum vehicle sales volumes; developments in global financial markets and general economic and other conditions; changes in demand for automotive products, which is highly cyclical; the Group’s ability to enrich the product portfolio and offer innovative products; the high level of competition in the automotive industry; the Group’s ability to expand certain of the Group’s brands internationally; changes in the Group’s credit ratings; the Group’s ability to realize anticipated benefits from any acquisitions, joint venture arrangements and other strategic alliances; potential shortfalls in the Group’s defined benefit pension plans; the Group’s ability to provide or arrange for adequate access to financing for the Group’s dealers and retail customers; the Group’s ability to access funding to execute the Group’s business plan and improve the Group’s business, financial condition and results of operations; various types of claims, lawsuits and other contingent obligations against the Group; disruptions arising from political, social and economic instability; material operating expenditures and other effects from and in relation to compliance with environmental, health and safety regulation; developments in labor and industrial relations and developments in applicable labor laws; increases in costs; disruptions of supply or shortages of raw materials; exchange rate fluctuations, interest rate changes, credit risk and other market risks; political and civil unrest; earthquakes or other disasters and other risks and uncertainties.

Any forwardlooking statements contained in this document speak only as of the date of this document and the Company does not undertake any obligation to update or revise publicly forwardlooking statements. Further information concerning the Group and its businesses, including factors that could materially affect the Company’s financial results, is included in the Company’s reports and filings with the U.S. Securities and Exchange Commission, the AFM and CONSOB.

On January 26, 2017, at 12:00 p.m. GMT, management will hold a conference call to present the 2016 full year results to financial analysts and institutional investors. The call can be followed live and a recording will be available later on the Group website (http://www.fcagroup.com/enus/pages/home.aspx). The supporting document will be made available on the Group's website prior to the call.

 

London, January 26, 2017 

 

 

(1) Combined shipments include shipments by the Group's consolidated subsidiaries and unconsolidated joint ventures, whereas consolidated shipments only include shipments from the Group's consolidated subsidiaries; (2) Refer to page 7 for reconciliations of Net profit from continuing operations to Adjusted EBIT and Net profit from continuing operations to Adjusted net profit; also refer to page 8 for a reconciliation of Diluted EPS (continuing operations) to Adjusted diluted EPS and Debt to Net industrial debt; (3) The Group's results refer to the Group's continuing operations, which exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015; (4) Sales data represents sales to retail and fleet customers and limited deliveries to Grouprelated persons. Sales by dealers to customers are reported through a newvehicle delivery system; (5) Number not meaningful; (6) At September 30, 2016; (7) Guidance is not provided on the most directly comparable IFRS financial statement line item for Adjusted EBIT and Adjusted net profit as the income or expense excluded from these nonGAAP supplemental financial measures in accordance with our policy are, by definition, not predictable and uncertain.(8) Due to unavailability of market data for LCVs in Italy, the figures reported are an extrapolation and discrepancies with actual data could exist (9) Adjusted EBIT excludes certain adjustments from Net profit from continuing operations including: gains/(losses) on the disposal of investments, restructuring, impairments, asset writeoffs 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); (10) Adjusted net profit is calculated as Net profit from continuing operations excluding posttax impacts of the same items excluded from Adjusted EBIT, as well as financial income/(expenses) and tax income/(expenses) considered rare or discrete events that are infrequent in nature. (11) Adjusted diluted EPS is calculated by adjusting Diluted EPS (continuing operations) for the impact of the same items excluded from Adjusted EBIT, as well as financial income/(expenses) and tax income/(expenses) considered rare or discrete events that are infrequent in nature; (12) includes financial receivables due from discontinued operations (€98 million at December 31, 2015) and financial payables due to discontinued operations (€137 million at December 31, 2015); (13) Net industrial debt is computed as: Debt plus derivative financial liabilities related to industrial activities less (i) cash and cash equivalents, (ii) current availableforsale and heldfortrading securities, (iii) current financial receivables from Group or jointly controlled financial services entities and (iv) derivative financial assets and collateral deposits; therefore, debt, cash and other financial assets/liabilities pertaining to financial services entities are excluded from the computation of Net industrial debt.

 

 

  

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