Q Results October 25, 2016

Transcription

1 Q Results October 25, 2016

2 Safe Harbor Statement This document, and in particular the section entitled 2016 guidance revised upwards, contains forward-looking statements. These statements may include terms such as may, will, expect, could, should, estimate, anticipate, believe, remain, on track, design, target, objective, goal, forecast, projection, outlook, prospects, plan, intend, 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 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. Q Results October 25,

3 Group overview Mass-market brands by region Components Industry outlook & guidance Luxury brand - Maserati Appendix Q Results October 25,

4 Highlights Record performance with highest ever Q3 Adjusted EBIT All segments improved except LATAM Maserati returned to double-digit Adjusted EBIT margin Q3 global Jeep shipments (including JV) up 3% y-o-y, up 11% YTD Production of all-new Jeep Compass began in September at Pernambuco (Brazil) plant North American debut at Los Angeles Auto Show in November To be sold globally, with additional production sites in China and Mexico New labor agreement with Unifor in Canada ratified on October 16 4-year agreement with wage increases for all eligible represented employees Modified new hire wage progression plan to provide wage increases each year to eligible employees FCA named to Dow Jones Sustainability Index World for the 8 th consecutive year Highest sector score for climate strategy, environmental reporting, brand management and supply chain management 2016 FY guidance revised upwards due to strong year-to-date operating performance Net revenues > 112B confirmed Adjusted EBIT* raised to > 5.8B from > 5.5B Adjusted net profit* raised to > 2.3B from > 2.0B Net industrial debt < 5.0B confirmed 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. Q Results October 25,

5 New products Small Engine Family Maserati s first ever SUV Available from Q2 16 in Europe and from Q3 16 in NAFTA and APAC Over 18,000 orders received worldwide vast majority are customer orders Reaffirms commitment to luxury strategy and business plan targets for the brand Return of the iconic roadster further enhances the Abarth brand image Class-exclusive 170-horsepower turbocharged engine Curb weight of only 1,060 kg and nearly 50/50 weight distribution ensuring performance and agility Available from Q3 16 in Europe and NAFTA Initial versions of new global modular small engine family 1.0 liter three-cylinder and 1.3 liter four-cylinder engines, with aluminum block construction Launched in LATAM in the refreshed 2017 Fiat Uno, delivering best-in-class torque and fuel economy Future versions will incorporate additional technologies, including direct injection and turbocharging Q Results October 25,

6 Q3 16 summary * Shipments (000s units) Q , , Consolidated shipments 1,112 JV shipments Combined shipments (including JVs) in line with prior year JV shipments higher due to transition to local Jeep production in China 26 1,138 YTD 3, , Adjusted net profit ( M) Q Increase in Adjusted net profit also reflects 93M lower net financial expenses primarily due to gross debt reduction and 100M lower tax expense mainly from higher tax credit utilization Net profit was 606M compared to a Net loss of 387M in Q3 15 YTD 1, Net revenues ( M) Net industrial debt ( B) Q3 YTD ,836 81,299 Sep ,798 81,181 Jun Net revenues in line with Q3 15 and flat at constant exchange rates (CER) Positive pricing and mix offset 4% reduction in consolidated shipments Adjusted EBIT ( M) Net industrial debt 1.0B higher than June 30, 16 primarily due to normal working capital seasonality Available liquidity ( B) Q ,163 1,500 YTD 4,507 3,264 Sep Jun Cash & Marketable Securities Undrawn committed credit lines Adjusted EBIT up 29%, with margin at 5.6% (vs 4.3% in Q3 15) EBIT increased to 1,341M from 225M in Q3 15 primarily due to higher Adjusted EBIT and the change in estimated recall campaign costs recognized in Q3 15 Lower liquidity due to seasonal cash absorption from operations Refer to Appendix for definitions of supplemental financial measures and reconciliations to applicable IFRS metrics. Figures may not add due to rounding. * Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari s classification as a discontinued operation for the year ended December 31, Refer to the Appendix for a reconciliation of these results to amounts previously reported. Q Results October 25,

7 Q3 16 Adjusted EBIT walk by segment * M % = Adjusted EBIT margin 1, (44) (7) 1, % 4.3% Q3 '15 NAFTA LATAM APAC EMEA Maserati Components Other & Eliminations Q3 '16 B/(W) than Q2 16 (93) (16) (21) (39) 67 1 (27) (128) * Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari s classification as a discontinued operation for the year ended December 31, Refer to the Appendix for a reconciliation of these results to amounts previously reported. Q Results October 25,

8 Q3 16 Adjusted EBIT walk by operational driver * M % = Adjusted EBIT margin 1, (47) 88 1, % 4.3% Q3 '15 Volume & Mix Net price Industrial costs SG&A Other Q3 '16 B/(W) than Q2 16 (172) (23) 6 78 (17) (128) * Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari s classification as a discontinued operation for the year ended December 31, Refer to the Appendix for a reconciliation of these results to amounts previously reported. Q Results October 25,

9 Q3 16 Net industrial debt walk M Q3 16 Change in Net industrial debt (1,040) Q3 16 Cash flows from operating activities, net of Capex (1,187) 2,941 (638) (242) (1,227) (5,474) (2,021) 147 (6,514) Jun 30 '16 Adjusted industrial EBITDA Financial charges and taxes * Change in funds & other Working capital Capex Scope, FX & dividend Sep 30 '16 YTD 16 8,818 (1,843) (136) (1,362) (5,893) (1,049) YTD 16 Change in Net industrial debt (1,465) YTD 16 Cash flows from operating activities, net of Capex (416) * Net of IAS 19 Q Results October 25,

10 NAFTA Q3 16 Q3 15 Sales (k units) (2)% Market share 12.0% 12.1% (10) bps U.S. dealer inventory (days of supply) (1) d/s Shipments (k units) (8)% Net revenues ( M) 16,810 17,704 (5)% 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. U.S. dealer inventory days of supply calculated using total sales including fleet. o Industry sales down 1% y-o-y in the U.S. and down 2% in Canada, with Group sales down 2% in the region U.S. sales up 1% to 570k vehicles, with share up 30 bps to 12.5%; Jeep and Ram sales up 5% and 11%, respectively U.S. dealer days of supply decreased to 72 days vs 75 at the end of Q2 16 and vs 73 at the end of Q3 15 U.S. fleet mix of sales at 21% vs 17% in Q3 15 In Canada, sales of 65k units, down 18%; market share at 12.6%, down 240 bps Mexico sales down 6% to 21k units o Shipments in U.S. down 45k units (-8%), Canada down 9k units (-13%) and Mexico down 4k units (-13%) o Net revenues down 5% at CER, due to lower shipments, partially offset by favorable vehicle mix Adjusted EBIT walk ( M) %= Adjusted EBIT margin 1, % 6.7% (204) (37) 11 1, % o Planned reduction in Chrysler 200 and Dodge Dart volumes and higher fleet mix, partially offset by favorable vehicle mix o Positive net pricing, partially offset by negative FX transaction impact from CAD and MXN o Industrial costs improved due to purchasing efficiencies and lower warranty costs, partially offset by higher product costs for content enhancements and higher manufacturing costs 7.6% o Higher SG&A primarily due to advertising expense to support product launches Q3 '15 B/(W) Q2 16 Volume & Mix Net price Industrial costs SG&A Other Q3 '16 (171) (3) (93) o Adjusted EBIT excludes net charges of 149M primarily relating to estimated costs associated with a planned recall for which there is ongoing litigation with a component supplier; although FCA believes supplier has responsibility, no recovery recognized as resolution with supplier is pending Q Results October 25,

11 LATAM Q3 16 Q3 15 Sales (k units) (17)% Market share 12.9% 14.3% (140) bps Inventories (days of supply) d/s Shipments (k units) (21)% Net revenues ( M) 1,491 1,515 (2)% o Industry down 8% due to continued macroeconomic weakness in Brazil Brazil industry down 17% y-o-y, Argentina up 12% o Continued as market leader in Brazil with share at 18.6% Jeep Renegade and all-new Fiat Toro continued strong performance in Brazil and were market leaders in their segments with a share of 24.6% and 75.5%, respectively Shipments in Brazil down 30k units (-26%), Argentina up 2k units (+8%) o Net revenues down 7% at CER Adjusted EBIT walk ( M) %= Adjusted EBIT margin % (4.3)% Q3 '15 3 Volume & Mix 7 Net price (50) Industrial costs 6 (1.1)% (1.1)% (10) (16) SG&A Other Q3 '16 o Lower volumes due to poor market conditions in Brazil more than offset by higher volumes in Argentina and mix improvement primarily from all-new Fiat Toro o Higher industrial costs mainly due to increased input costs driven by inflation and FX effects o SG&A improvement driven by continued cost reduction initiatives to right size to market volume o Other primarily reflects FX translation impact B/(W) Q (18) (8) 2 0 (16) Q Results October 25,

12 APAC Combined sales (k units) of which China JV sales APAC market share reflects aggregate for major markets where Group competes (China, Australia, Japan, South Korea and India). Market share is based on retail registrations except in India where market share is based on wholesale volumes. * Calculated based on combined sales and inventories Adjusted EBIT walk ( M) %= Adjusted EBIT margin xx% 3.1% (9.9)% (9.9)% B/(W) Q2 16 Q3 16 Q (12) (25) 5 7 (21) % 338% Market share 0.8% 0.7% 10 bps Inventories (days of supply) * (41) d/s Combined shipments (k units) of which China JV shipments % 550% Net revenues ( M) % (83) Q3 '15 40 Volume & Mix (23) Net price (17) Industrial costs % 4.4% 2.2% SG&A Other Q3 '16 o Industry up 18% with China +26%, India +18%, Australia +2%, Japan flat and South Korea -12% o Group combined sales increased 27% with market share up 10 bps compared with prior year China +52%, Japan +23%, both outperforming their respective industries Australia -49% due to impact of price increases to offset AUD weakness, South Korea -2% and India -4% Jeep brand (81% of regional Group sales) +76% y-o-y driven by higher sales of Cherokee and Renegade o Combined shipments up 69% with higher JV shipments, partially offset by reduction of imported vehicles o Net revenues +2% at CER o Lower imported volumes in China due to transition to local Jeep production, more than offset by favorable vehicle mix from imported vehicles o Lower net price due to incentives for completion of the sell-out of discontinued and other imported vehicles o Higher industrial costs due to unfavorable FX transaction impact o Lower SG&A primarily due to marketing expenses now incurred by China JV o Other reflects improved results from China JV and favorable FX impact Q Results October 25,

13 EMEA Q3 16 Q3 15 Sales (k units) % EU Market share - passenger cars bps EU Market share - LCVs bps Inventories (days of supply) Shipments (k units) % Net revenues ( M) 5,070 4,611 10% Adjusted EBIT walk ( M) %= Adjusted EBIT margin Passenger Cars o EU28+EFTA (EU) industry up 5% to 3.5M units with growth in all major markets: Italy (+12%), Spain (+10%), Germany (+4%) and UK (+1%) except France (-1%) o EU Sales up 11% to 215k units. EU market share up 40 bps driven by increases in Italy (+70 bps), France (+30 bps), Spain (+80 bps), Germany (+50 bps) o Shipments at 229k (+16%) LCVs o EU industry up 14% to 508k units with growth in all major markets: Italy (+43%), France (+4%), Spain (+11%), Germany (+22%) and UK (+4%) o EU sales up 17% to 56k units with EU market share at 11.0% o Shipments at 66k (+24%) o Increase in inventories due to new model launches and timing of fleet shipments o Volume increase and favorable mix driven primarily by all-new Fiat Tipo family % (48) (35) % o Industrial costs increase reflects higher R&D and manufacturing costs, partially offset by purchasing efficiencies o Higher SG&A mainly due to advertising to support new product launches o Other reflects improved results from JVs and favorable FX Q3 '15 Volume & Mix Net price Industrial costs SG&A Other Q3 '16 B/(W) Q2 16 (105) (7) (39) Q Results October 25,

14 Luxury brand Maserati Q3 16 Q3 15 Q3 16 Shipments By Market Shipments (units) 10,656 6,916 54% Net revenues ( M) % Europe Top-5 19% Japan 2% Adjusted EBIT ( M) % Adjusted EBIT margin 11.8% 2.3% 950 bps North America 28% Greater China 32% Commercial Performance o Higher shipments from all-new Levante, partially offset by lower Ghibli shipments o Over 18,000 global orders for Levante, vast majority of which are customer orders, reflecting strong demand in all regions Financial Performance o Increase in Net revenues driven by higher volumes, positive net pricing, as well as favorable vehicle and market mix mainly due to all-new Levante o Adjusted EBIT increase due to higher Net revenues, partially offset by increase in industrial costs and commercial launch activities Other 19% All-new Levante SUV Q Results October 25,

15 Components ( M) Net revenues Adjusted EBIT Adjusted EBIT Margin Q3 '16 2,390 Q3 ' % Q3 '15 2,348 Q3 ' % o Increase in Net revenues reflects higher volumes and favorable mix at Magneti Marelli, partially offset by lower volumes at Comau o Adjusted EBIT increase due to higher Net revenues, partially offset by higher industrial costs o Magneti Marelli non-captive Net revenues at 69%, in line with Q3 15 Q Results October 25,

16 Industry outlook M units NAFTA (passenger cars, UVs, pickup trucks & LCVs) LATAM (passenger cars & LCVs) FY '16E FY ' FY '16E ~ FY ' Forecast Xxx unchanged U.S. xxx industry stable Forecast adjusted to low-end of prior range reflecting continued weak market conditions in Brazil, currently forecasted at ~2M units APAC (passenger cars only) EMEA (EU28+EFTA) (passenger cars & LCVs) FY '16E FY '16E FY ' FY ' Forecast unchanged Market trend indicates high-end of range Forecast increased by 0.5M due to continued positive market momentum YTD September trend indicates high-end of range Q Results October 25,

17 2016 guidance revised upwards B Original January 16 Revised July 16 Current Revision Net revenues >110 Raised to >112 Confirmed Adjusted EBIT* >5.0 Raised to >5.5 Raised to >5.8 Adjusted net profit* >1.9 Raised to >2.0 Raised to >2.3 Net industrial debt <5.0 Confirmed Confirmed 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. Q Results October 25,

18 APPENDIX Q Results October 25,

19 Supplemental financial measures FCA 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. Group management believes these supplemental financial measures provide comparable measures of its financial performance which then facilitate management s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. FCA s supplemental financial measures are defined as follows: Adjusted Earnings Before Interest and Taxes ( Adjusted EBIT ) is computed as EBIT excluding: gains/(losses) on the disposals of investments, restructuring, impairments, asset write-offs and other unusual items that are considered rare or discrete events that are infrequent in nature Adjusted Net Profit is calculated as Net Profit excluding after-tax impacts of the same items excluded from Adjusted EBIT Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ( Adjusted EBITDA ) is computed starting with Adjusted 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 Q Results October 25,

20 Key performance metrics M, except as otherwise stated Three months ended Sep 30 Nine months ended Sep ,123 1,138 Combined shipments (units 000) 3,487 3,481 1,066 1,112 Consolidated shipments (units 000) 3,327 3,396 26,836 26,798 Net revenues 81,299 81,181 1, EBIT 3,708 2, Adjustments 799 1,117 1,500 1,163 Adjusted EBIT 4,507 3, Of which: Result from investments (528) (621) Net financial expenses (1,531) (1,848) 813 (396) Profit/(Loss) before taxes 2, (9) Tax expense/(benefit) (387) Net profit/(loss) 1,405 (103) Adjusted net profit 1, Q Results October 25,

21 Reconciliation of Adjusted EBIT to EBIT and Adjusted net profit to Net profit/(loss) M Adjusted EBIT to EBIT Three months ended Sep 30 Nine months ended Sep ,500 1,163 Adjusted EBIT 4,507 3, Recall campaigns - airbag inflators (414) - (157) - Planned recall in litigation with supplier (157) NAFTA capacity realignment (156) - - (761) Change in estimate for future recall campaign costs - (761) - (142) Tianjin (China) port explosions - (142) - - Venezuela currency devaluation (19) (80) - - U.S. National Highway Traffic Safety Administration (NHTSA) consent order - (81) 1 (13) Restructuring reversal/(costs) (66) (25) (16) (11) Impairment expense (16) (15) 8 - Gains on disposal of investments 13-5 (11) Other 16 (13) (159) (938) Total adjustments (799) (1,117) 1, EBIT 3,708 2,147 Adjusted net profit to Net profit/(loss) Three months ended Sep 30 Nine months ended Sep Adjusted net profit 1, (159) (938) Adjustments - as above (799) (1,117) Tax impact on adjustments (134) (597) Total adjustments, net of taxes (572) (716) 606 (387) Net profit/(loss) 1,405 (103) Q Results October 25,

22 Reconciliation of Net industrial debt to Debt M Sep Jun Dec Net industrial debt 6,514 5,474 5,049 Net financial services debt 1,708 1,689 1,499 Net debt 8,222 7,163 6,548 Intercompany financial receivables/(payables), net - - (39) Current financial receivables from jointly-controlled financial services companies Other financial assets/(liabilities), net 48 (397) 117 Current securities Cash and cash equivalents 16,626 18,144 20,662 Debt 25,292 25,374 27,786 Q Results October 25,

23 Reconciliation of results for Ferrari separation M, except as otherwise stated The following is a reconciliation of the Group's results as reported herein for the three and nine months ended September 30, 2015 (re-presented to exclude Ferrari) to the Group's results previously reported. The amounts presented in the table below 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. Three months ended Sep 30, 2015 Nine months ended Sep 30, 2015 Results excluding Ferrari (as reported herein) Ferrari, net of intercompany Results including Ferrari (previously reported) Results excluding Ferrari (as reported herein) Ferrari, net of intercompany Results including Ferrari (previously reported) 1, ,114 Shipments (units 000) 3, ,402 26, ,468 Net revenues 81,181 1,911 83, EBIT 2, ,500 1, ,303 Adjusted EBIT 3, ,628 (387) 88 (299) Net profit/(loss) (103) Q Results October 25,

24 YTD Adjusted EBIT walk * M 3, (34) 4, % 4.0% 9m YTD '15 NAFTA LATAM APAC EMEA Maserati Components Other & Sep Eliminations 9m YTD '16 Sep , (13) 162 4, % 4.0% YTD Sep Volume & Mix Net price Industrial costs SG&A Other YTD Sep * Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari s classification as a discontinued operation for the year ended December 31, Refer to the Appendix for a reconciliation of these results to amounts previously reported. Q Results October 25,

25 Market Share - mass-market brands % NAFTA LATAM Q3 13 Q3 14 Q3 15 Q3 16 Q3 13 Q3 14 Q3 15 Q3 16 APAC EMEA Q3 13 Q3 14 Q3 15 Q3 16 LCV Passenger Cars LCV Passenger Cars Q3 13 Q3 14 Q3 15 Q3 16 Market share based on retail registrations except in India where it is based on wholesale volumes Q Results October 25,

26 Debt maturity schedule B Outstanding Sept FCA Group Q Beyond 9.6 Bank Debt Capital Market Other Debt Total Cash Maturities* Cash & Mktable Securities 6.2 Undrawn Committed Revolving Facilities 23.2 Total Available Liquidity 5.5 Sale of Receivables (IFRS de-recognition compliant) 3.5 of which receivables sold to financial services JVs (FCA Bank) Note: Numbers may not add due to rounding * Represents total cash maturities excluding accruals Q Results October 25,

27 Contacts Investor Relations Team Joe Veltri Vice President Erin Banyas Francesca Ferragina Tim Krause Alois Monger Paolo Mosole fax: websites: Q Results October 25,