FCA Reports Record Third Quarter Results With Adjusted EBIT of €1.5 Billion, up 29%, Adjusted Net Profit of €740 Million and Net Profit of €606 Million. Group Adjusted EBIT Margin of 5.6%, up 130 bps. Full-year Guidance is Raised

News provided by

Fiat Chrysler Automobiles

Oct 25, 2016, 07:21 ET

LONDON, Oct. 25, 2016 /PRNewswire/ --

  • Worldwide combined shipments(1) of 1,123 thousand units, substantially in line with prior year; Jeep combined shipments(1) up 3%
  • Net revenues of €26.8 billion, in line with Q3 2015
  • Adjusted EBIT increased 29% to €1,500 million, with improvement in all segments except LATAM; EBIT was €1,341 million as compared with €225 million in Q3 2015
  • Adjusted Net Profit increased over three-fold to €740 million; Net Profit of €606 million, up €1.0 billion from prior year
  • Net industrial debt increased €1.0 billion from June 2016 mainly due to normal working capital seasonality
  • Market share in U.S. increased to 12.5%, up 30 bps, and in Europe to 6.1%, up 40 bps; remained market leader in Brazil with 18.6% market share

FIAT CHRYSLER AUTOMOBILES - Financial Results

Nine months ended September 30

Three months ended September 30

2016

  2015 (2)

Change

(€ million, except as otherwise noted)

2016

    2015 (2)

         Change

3,487

3,481

6

— %

Combined shipments(1) ('000 units)

1,123

1,138

(15)

(1)%

3,327

3,396

(69)

(2)%

Consolidated shipments(1) ('000 units)

1,066

1,112

(46)

(4)%

81,299

81,181

118

— %

Net revenues

26,836

26,798

38

— %

3,708

2,147

1,561

+73 %

EBIT

1,341

225

1,116

+496 %

4,507

3,264

1,243

+38%

Adjusted EBIT(3)

1,500

1,163

337

+29 %

1,405

(103)

1,508

n.m.(7)

Net profit/(loss)

606

(387)

993

        n.m.(7)

1,977

613

1,364

+223 %

Adjusted net profit(3)

740

210

530

+252 %

0.890

(0.075)

0.965

n.m.(7)

Diluted earnings/(loss) per share (EPS) (€)

0.388

(0.255)

0.643

        n.m.(7)

1.256

0.399

0.857

+215 %

Adjusted diluted EPS(3) (€)

0.474

0.140

0.334

+239 %

6,514

 5,049 (5)

1,465

Net industrial debt(3)

6,514

5,474 (4)

1,040

25,292

 27,786 (5)

(2,494)

Debt

25,292

25,374 (4)

(82)

23,197

 24,557 (5)

(1,360)

Available liquidity

23,197

       24,748 (4)

(1,551)

ADJUSTED EBIT

ADJUSTED NET PROFIT
  • Record Q3 driven by continued strong performance in NAFTA and Components with significant improvement in APAC, Maserati and EMEA
  • LATAM at nearly break-even with continued difficult market conditions
  • NAFTA margin increased to 7.6% from 6.7%
  • Maserati returned to double-digit margin at 11.8%
  • Increase primarily driven by strong operating performance
  • Net financial expenses down €93 million to €528 million primarily driven by gross debt reduction
  • Tax expense in Adjusted net profit decreased to €232 million from €332 million primarily due to the increased use of tax credits





NET INDUSTRIAL DEBT

2016 GUIDANCE
  • Cash flow generation from operating activities of €0.8 billion, including negative impact of €1.2 billion of normal seasonal working capital increase
  • Capital expenditures of €2.0 billion, in line with prior year
  • Strong available liquidity at €23.2 billion

Group raises full-year guidance due to strong year-to-date operating performance:

  • Net revenues > €112 billion confirmed
  • Adjusted EBIT (6) raised to > €5.8 billion from > €5.5 billion
  • Adjusted net profit(6) raised to > €2.3 billion from > €2.0 billion
  • Net industrial debt  < €5.0 billion confirmed





_____________________________________________________________________________________________________

(1) Combined shipments include all shipments by the Group's unconsolidated joint ventures, whereas consolidated shipments only include shipments from the Group's consolidated subsidiaries (2) The Group's results have been re-presented to exclude Ferrari, consistent with Ferrari's classification as a discontinued operation for the year ended December 31, 2015; refer to page 8 for a reconciliation of these results to amounts previously reported (3) Refer to page 7 for reconciliations of Adjusted EBIT to EBIT, Adjusted net profit to Net profit, Adjusted diluted EPS to Diluted EPS and page 8 for a reconciliation of Net industrial debt to Debt (4) At June 30, 2016 (5) At December 31, 2015 (6) These supplemental financial measures are non-GAAP; guidance is not provided on the most directly comparable IFRS financial statement line item as the income or expense excluded from Adjusted EBIT and Adjusted net profit in accordance with our policy are, by definition, not predictable and uncertain (7) Number is not meaningful

Results by segment

Net revenues and Adjusted EBIT by segment

Net revenues

Adjusted EBIT

Three months ended September 30

Three months ended September 30

2016

2015

 (€ million)

2016

2015

16,810

17,704

NAFTA

1,281

1,186

1,491

1,515

LATAM

(16)

28

861

842

APAC

21

(83)

5,070

4,611

EMEA

104

20

873

516

Maserati

103

12

2,390

2,348

Components

112

98

(659)

(738)

Other activities, unallocated items and adjustments

(105)

(98)

26,836

26,798

Total

1,500

1,163

NAFTA

Three months ended September 30

Change

2016

2015

Actual

CER

Shipments (thousands of units)

627

685

(8)%

Net revenues (€ million)

16,810

17,704

(5)%

(5) %

Adjusted EBIT (€ million)

1,281

1,186

+8 %

+8 %

Adjusted EBIT margin  

7.6 %

6.7 %

+ 90 bps

Adjusted EBIT margin up 90 bps

 to 7.6%. U.S. market share(8) up 30 bps

 
  • Shipments decrease primarily due to planned reduction in Chrysler 200 and Dodge Dart volumes in connection with NAFTA capacity realignment plan: U.S. -45 thousand units (-8%), Canada -9 thousand units (-13%), Mexico -4 thousand units (-13%)
  • Net revenues decrease due to lower shipments, with higher fleet mix, partially offset by favorable vehicle mix
  • Adjusted EBIT increase primarily due to positive net pricing (net of negative FX transaction impact from CAD and MXN), purchasing efficiencies and lower warranty costs, partially offset by lower revenues, increase in product costs for content enhancements and higher manufacturing costs
  • Adjusted EBIT excludes net charges of €149 million, primarily relating to estimated costs associated with a planned recall for which there is ongoing litigation with a component supplier; although FCA believes the component supplier has responsibility for the recall, no recovery has been recognized as of September 30, 2016 in accordance with applicable accounting guidance as a resolution with the supplier has not yet been reached


_____________________________________________________________________________________________________

(8) Sales data represents sales to retail and fleet customers and limited deliveries to Group-related persons. Sales by dealers to customers are reported through a new vehicle delivery system.

LATAM

Three months ended September 30

Change

2016

2015

Actual

CER

Shipments (thousands of units)

111

140

(21)%

Net revenues (€ million)

1,491

1,515

(2)%

(7) %

Adjusted EBIT (€ million)

(16)

28

n.m.(7)

n.m.(7)

Adjusted EBIT margin

(1.1)%

1.8 %

n.m.(7)

Remained market leader in Brazil, with market share of 18.6%
  • Decrease in shipments reflects poor market conditions in Brazil due to continued macroeconomic weakness, partly offset by improvement in Argentina: Brazil -30 thousand units (-26%), Argentina +2 thousand units (+8%)
  • Decrease in Net revenues with lower shipments, partially offset by favorable vehicle mix mainly from the all-new Fiat Toro
  • Adjusted EBIT decrease primarily as a result of higher input costs driven by inflation and foreign exchange effects



APAC

Three months ended September 30

Change

2016

2015

Actual

CER

Shipments (thousands of units)

22

30

(27)%

Net revenues (€ million)

861

842

+2%

+2%

Adjusted EBIT (€ million)

21

(83)

n.m.(7)

n.m.(7)

Adjusted EBIT margin

2.4 %

(9.9)%

n.m.(7)

Jeep sales up 76% driven by ongoing transition to localized production in China
  • Decrease in shipments due to transition to local Jeep production in China, through JV with GAC; combined shipments (including JV produced units) up 69% to 61 thousand units
  • Net revenues slight increase primarily as a result of favorable vehicle mix in China and increased sales of components to the China  JV offsetting lower shipments
  • Adjusted EBIT increase mainly due to favorable mix on imported vehicles, lower net price due to incentives for completion of the sell-out of discontinued and other imported vehicles and improved results from China JV


EMEA

Three months ended September 30

Change

2016

2015

Actual

CER

Shipments (thousands of units)

295

250

+18 %

Net revenues (€ million)

5,070

4,611

+10 %

+12 %

Adjusted EBIT (€ million)

104

20

+420 %

+414 %

Adjusted EBIT margin

2.1 %

0.4%

+170 bps

Continued profit and margin improvement together with market share growth
  • European market share (EU28+EFTA) for passenger cars up 40 bps to 6.1% (up 70 bps to 28.9% in Italy) and up 30 bps to 11% for light commercial vehicles (LCVs)(9) (up 70 bps to 45.2% in Italy)
  • Passenger car shipments up 16% to 229 thousand units and shipments of LCVs up 24% to 66 thousand units
  • Net revenues increase primarily due to higher volumes and favorable vehicle mix mainly driven by all-new Fiat Tipo family
  • Adjusted EBIT increase mainly driven by higher Net revenues, purchasing efficiencies, improved results from joint ventures and favorable FX, partially offset by higher advertising to support new product launches, as well as higher research and development and manufacturing costs


MASERATI

Three months ended September 30

Change

2016

2015

Actual

CER

Shipments (units)

10,656

6,916

+54 %

Net revenues (€ million)

873

516

+69 %

+73 %

Adjusted EBIT (€ million)

103

12

+758 %

+779 %

Adjusted EBIT margin

11.8%

2.3 %

+950 bps

Return to double-digit Adjusted EBIT margin at 11.8%
  • Increase in shipments driven by launch of all-new Levante, partially offset by decrease in Ghibli, with significant increases in all regions: China (+109%), North America (+42%) and Europe (+67%)
  • Net revenues increase primarily due to higher shipments, positive net pricing and favorable vehicle and market mix mainly from all-new Levante
  • Adjusted EBIT improvement resulting from increase in Net revenues, partially offset by increase in industrial costs and commercial launch activities

_____________________________________________________________________________________________________               

(9) Due to unavailability of market data for LCVs in Italy, the figures reported are an extrapolation and discrepancies with actual data could exist

COMPONENTS (Magneti Marelli, Comau and Teksid)

Three months ended September 30

Change

2016

2015

Actual

CER

Net revenues (€ million)

2,390

2,348

+2 %

+2%

Adjusted EBIT (€ million)

112

98

+14 %

+18%

Adjusted EBIT margin

4.7%

4.2 %

+ 50 bps

Continued strong performance with Adjusted EBIT margin up to 4.7%
  • Increase in Net revenues reflects higher volumes and favorable mix at Magneti Marelli, partially offset by lower volumes at Comau
  • Adjusted EBIT increase due to higher Net revenues, partially offset by higher industrial costs
  • Magneti Marelli non-captive Net revenues at 69%, in line with Q3 2015


Brand Activity

Jeep
  • Production of all-new Jeep Compass began in September at Pernambuco (Brazil) plant, a global compact SUV that will be produced with 17 fuel-efficient powertrain options for consumers in more than 100 countries with additional production sites in China, India and Mexico
  • Introduction of Jeep to India market with launches of Jeep Wrangler and Jeep Grand Cherokee in August
  • Jeep Grand Cherokee wins AutoPacific's 2016 "Best-in-Class Ideal Vehicle Award" for mid-size SUV segment for sixth consecutive year

Maserati
  • Commercial launch of restyled 2017 Maserati Quattroporte and Maserati Ghibli in July
  • Commercial launch of the all-new Maserati Levante in APAC (July) and NAFTA (August)

Alfa Romeo
  • Awards of "Autonis 2016" competition by German automotive magazine, Auto Motor und Sport included:
  • Alfa Romeo awarded "Design Brand of the Year"
  • All-new Alfa Romeo Giulia won in mid-size category
  • Alfa Romeo MiTo won in small-car category

Chrysler
  • All-new 2017 Chrysler Pacifica:
  • Named "2016 Top Safety Pick+" by Insurance Institute for Highway Safety (IIHS)
  • Named to first-ever "Wards 10 Best User Experience" list for 2016

Fiat
  • Launch in 2017 Fiat Uno in LATAM of new FCA global Firefly small engine family with 1.0 liter three-cylinder engines and 1.3 liter four-cylinder versions, which will power small cars in Brazil and other markets including Europe, Africa and Asia

Abarth
  • Abarth 124 Spider was unveiled in Japan at Automobile Council 2016 show in August
  • Abarth 595 won award in Minicar category of "Autonis 2016" competition by German automotive magazine, Auto Motor und Sport

Dodge
  • Dodge Challenger wins AutoPacific's 2016 "Best-in-Class Ideal Vehicle Award" for sporty car segment

Ram
  • Ram 1500 Lone Star Silver Edition, with premium and functional upgrades, and Ram TRX concept with 575 horsepower, were unveiled at State Fair of Texas
  • New special-edition 2017 Ram 1500 Night Package, with customized blacked-out wheels, grille and badging was announced

Reconciliations

Nine months ended September 30

Adjusted EBIT to EBIT

Three months ended September 30

2016

2015

(€ million)

2016

2015

4,507

3,264

Adjusted EBIT (10)

1,500

1,163

(414)

—

Recall campaigns - airbag inflators

—

—

(157)

—

Planned recall - in litigation with supplier

(157)

—

(156)

—

NAFTA capacity realignment

—

—

—

(761)

Change in estimate for future recall campaign costs

—

(761)

—

(142)

Tianjin (China) port explosions

—

(142)

(19)

(80)

Venezuela currency devaluation

—

—

—

(81)

U.S. National Highway Traffic Safety Administration (NHTSA) consent order

—

—

(66)

(25)

Restructuring reversal/(costs)

1

(13)

(16)

(15)

Impairment expense

(16)

(11)

13

—

Gains on disposal of investments

8

—

16

(13)

Other

5

(11)

(799)

(1,117)

Total adjustments

(159)

(938)

3,708

2,147

EBIT

1,341

225

Nine months ended September 30

Adjusted net profit to Net profit/(loss)

Three months ended September 30

2016

2015

(€ million)

2016

2015

1,977

613

Adjusted net profit (11)

740

210

(799)

(1,117)

Adjustments (as above)

(159)

(938)

227

401

Tax impact on adjustments

25

341

(572)

(716)

Total adjustments, net of taxes

(134)

(597)

1,405

(103)

Net profit/(loss)

606

(387)

Nine months ended September 30

Adjusted diluted EPS to Diluted EPS

Three months ended September 30

2016

2015

2016

2015

1.256

0.399

Adjusted diluted EPS (€/share) (12)

0.474

0.140

(572)

(716)

Total adjustments, net of taxes (€ million)

(134)

(597)

(0.366)

(0.474)

Impact of adjustments on Diluted EPS (€/share)

(0.086)

(0.395)

0.890

(0.075)

Diluted EPS (€/share)

0.388

(0.255)

1,563,044

1,510,274

Weighted average number of shares outstanding for diluted EPS (thousand)

1,565,634

1,511,370

__________________________________________________________________________________________________               

(10) Adjusted EBIT is calculated as EBIT excluding: gains/(losses) on the disposal of investments, restructuring, impairments, asset write-offs and other unusual income/(expenses) that are considered rare or discrete events that are infrequent in nature; (11) Adjusted net profit is calculated as Net profit excluding post-tax impacts of the same items excluded from Adjusted EBIT; (12) Adjusted diluted EPS is calculated by adjusting Diluted EPS for the impact of the same items excluded from Adjusted EBIT

Net industrial debt to Debt

At September, 2016

At June 30, 2016

(€ million)

Net industrial debt (13)

6,514

5,474

Net financial services debt

1,708

1,689

Net debt

8,222

7,163

Current financial receivables from jointly-controlled financial services companies

62

50

Other financial assets/(liabilities), net

48

(397)

Current securities

334

414

Cash and cash equivalents

16,626

18,144

Debt

25,292

25,374

The following is a reconciliation of the Group's results as reported herein (re-presented to exclude Ferrari) to the Group's results previously reported for the three and nine months ended September 30, 2015.

Nine months ended September 30, 2015

Three months ended September 30, 2015

Results -
excluding Ferrari
(as reported
herein)

Ferrari, net of
intercompany (14)

Results -
including Ferrari
(previously
reported)

(€ million, except as otherwise noted)

Results -
excluding Ferrari
(as reported
herein)

Ferrari, net of
intercompany (14)

Results -
including Ferrari
(previously
reported)

3,396

6

3,402

Consolidated shipments  ('000 units)

1,112

2

1,114

81,181

1,911

83,092

Net revenues

26,798

670

27,468

2,147

353

2,500

EBIT

225

135

360

3,264

364

3,628

Adjusted EBIT

1,163

140

1,303

(103)

229

126

Net profit/(loss)

(387)

88

(299)

_________________________________________________________________________________________________               

(13) 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 (14) the amounts presented for Ferrari are not representative of the income statement of Ferrari on a stand-alone basis, as these amounts are net of transactions between Ferrari and other companies of the Group

This document, and in particular the section entitled "2016 Guidance", contains forward-looking 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. Forward-looking 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 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 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 forward-looking 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 forward-looking 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 October 25, 2016, at 1.30 p.m. BST, management will hold a conference call to present the 2016 third quarter 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/en-us/pages/home.aspx). The supporting document will be made available on the Group website prior to the call.

SOURCE Fiat Chrysler Automobiles

Related Links

http://www.fcagroup.com

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