Q Results July 27, 2016

Transcription

1 Q Results July 27, 2016 Q Results July 27, 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 July 27,

3 Group overview Mass-market brands by region Components Industry outlook & guidance Luxury brand - Maserati Appendix Q Results July 27,

4 Q2 16 highlights Strongest Q2 performance ever with record Adjusted EBIT margin at 5.8% Adjusted EBIT margin improved in all regions and Components Strong cash flow in the quarter with 1.1B reduction in Net industrial debt Google and FCA enter into first-of-its-kind collaboration FCA will initially design and engineer ~100 Chrysler Pacifica hybrids uniquely built for Google s self-driving technology Both companies to co-locate engineering teams to accelerate design, testing and manufacturing NAFTA capacity realignment plan proceeding on schedule Increased capacity for Jeep and Ram brands starting from Q2 17 Commercial launches of all-new Alfa Romeo Giulia and Maserati Levante in Europe Another key milestone in luxury and premium brand strategies U.S. launches planned for H2 Moody s corporate credit rating upgrade Stable outlook Rating raised to Ba3 from B1 Rating raised to B1 from B2 on bonds issued or guaranteed by FCA 2016 FY guidance revised upwards due to strong H1 operating performance Net revenues raised to > 112B from > 110B Adjusted EBIT raised to > 5.5B from > 5.0B Adjusted net profit raised to > 2.0B from > 1.9B Net industrial debt < 5.0B confirmed Q Results July 27,

5 New products All-new hatchback version along with previously launched Tipo sedan and station wagon models marks comeback of Fiat brand to the C-segment (second largest segment in EU) Targets budget conscious consumers with a product providing skills-no-frills concept Hatchback launched in Q2 16 in Europe 4x4 and 4x2 with 1 metric ton payload and 3,100 kg towing capacity to fully address customer needs in mid-size pickup segment Offered in Europe with gasoline or diesel engine, both available with manual or automatic transmission Available from Q2 16 in main European markets The flagship Maserati model has a restyled exterior, interior refinements and additional high-tech features Model line has been expanded with the introduction of the new GranLusso and GranSport trim levels Available from Q2 16 in main European markets Q Results July 27,

6 Q2 16 summary * Shipments (000s units) Q ,175 1,191 YTD 2,261 2,284 Adjusted net profit ( M) Q YTD 1, Shipments down 1% driven by APAC due to transition to localized Jeep production in China Combined shipments (including JVs) up 1% to 1,233k units with increase in EMEA, partially offset by LATAM reduction Net financial charges down due to debt reduction and refinancing at lower rates, with taxes included in Adjusted net profit flat Net profit was 321M vs 257M in Q2 15 Net revenues ( M) Net industrial debt ( B) Q2 YTD ,893 54,463 Jun ,540 54,383 Mar Net revenues down 2% Up 1% at constant exchange rates (CER) Adjusted EBIT ( M) Net industrial debt reduced by 1.1B from Mar due to strong cash generation from operations Available liquidity ( B) Q ,401 1,628 YTD 3,007 2,101 Jun Mar Cash & Marketable Securities Undrawn committed credit lines Adjusted EBIT up 16%, with margin at 5.8% vs 4.9% in Q2 15 EBIT was 1,060M vs 1,226M in Q2 15, primarily due to charges for Takata airbag inflator recalls excluded from Adjusted EBIT Available liquidity stable at 24.7B with cash generation from operations offsetting debt reduction (including 1B bond repaid at maturity) 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 July 27,

7 Q2 16 Adjusted EBIT walk by segment * M % = Adjusted EBIT margin 1, (5) 86 (7) , % 4.9% Q2 '15 NAFTA LATAM APAC EMEA Maserati Components Other & Eliminations Q2 '16 B/(W) than Q (11) (9) 249 * 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 July 27,

8 Q2 16 Adjusted EBIT walk by operational driver * M % = Adjusted EBIT margin 1, (99) (76) 28 1, % 4.9% Q2 '15 Volume & Mix Net price Industrial costs SG&A Other Q2 '16 B/(W) than Q (163) (61) 249 * 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 July 27,

9 Q2 16 Net industrial debt walk M Q2 16 Change in Net industrial debt 1,119 Q2 16 Cash flows from operating activities, net of Capex 1,810 (6,593) 3, ,180 (5,474) (570) (2,052) (691) Mar 31 '16 Adjusted industrial EBITDA Financial charges and taxes * Change in funds & other Working capital Capex Scope, FX & dividend Jun 30 '16 YTD 16 5,877 (1,204) 105 (136) (3,872) (1,195) YTD 16 Change in Net industrial debt -425 YTD 16 Cash flows from operating activities, net of Capex 770 * Net of IAS 19 Q Results July 27,

10 NAFTA Q2 16 Q2 15 Sales (k units) % Market share 12.5% 12.4% 10 bps U.S. dealer inventory (days of supply) d/s Shipments (k units) (2%) Net revenues ( M) 17,479 17,186 2% 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. Reporting methodology consistent with FCA US press release issued July 26, U.S. dealer inventory days of supply calculated using total sales including fleet. Adjusted EBIT walk ( M) %= Adjusted EBIT margin 1,327 (32) 1,374 (137) (19) (16) 7.7% Q2 '15 B/(W) Q Volume & Mix Net price Industrial costs 7.9% SG&A Other Q2 ' (67) (69) 147 o Industry sales down 1% in U.S. and up 3% in Canada, with Group sales up 2% in the region U.S. sales up 2% to 589k vehicles with share up 30 bps to 12.7%; Jeep and Ram sales up 12% and 10%, respectively U.S. dealer days of supply decreased to 75 vs 83 days at end of Q1 16 U.S. fleet mix at 24% vs 21% in Q2 15 with improved channel and model mix In Canada, maintained market leadership with sales of 90k units, up 4%; market share at 15.2% Mexico sales down 3% to 19k units o Shipments in U.S. down 7k units (-1%) with Canada flat and Mexico down 4k units (-17%) o Net revenues up 2% (+4% at CER), due to improved mix and net pricing, partially offset by unfavorable FX o Mix favorability primarily driven by improved truck and SUV model mix o Positive net pricing actions more than offset by negative FX transaction impact from CAD and MXN o Purchasing efficiencies more than offset by higher product costs for content enhancements and higher manufacturing and D&A costs o Adjusted EBIT excludes total charges of 519M related to Takata airbag inflator recalls and incremental costs for NAFTA capacity realignment plan Q Results July 27,

11 LATAM Q2 16 Q2 15 Sales (k units) (22%) Market share 12.5% 14.0% (150) bps Inventories (days of supply) d/s Shipments (k units) (19%) Net revenues ( M) 1,469 1,851 (21%) o Industry down 12% due to continued macroeconomic weakness Brazil industry down 22% y-o-y, Argentina up 12% o Continued as market leader in Brazil with share at 17.8% Jeep Renegade and all-new Fiat Toro continued strong performance in Brazil with segment share of 23.8% and 76.0%, respectively Shipments in Brazil down 29k units (-25%), Argentina up 1k units (+8%) o Net revenues down 9% at CER due to lower volumes, partially offset by better product mix Adjusted EBIT walk ( M) %= Adjusted EBIT margin o Mix improvement driven primarily by newly launched Fiat Toro, more than offset by lower volumes due to poor market conditions in Brazil (4.3)% (4.3)% (79) Q2 '15 3 Volume & Mix 9 Net price Industrial costs SG&A Other Q2 '16 o Lower industrial costs mainly due to non-repeat of launch costs in prior period, partially offset by input cost inflation o SG&A improvement driven primarily by continued cost reduction initiatives to rightsize to market volume o Other primarily reflects FX translation impact mainly due to Brazilian Real B/(W) Q1 16 (9) 28 (15) (13) (2) (11) Q Results July 27,

12 APAC Sales (k units) Of which China JV sales Q2 16 Q2 15 Market share 0.8% 0.8% - 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 % Inventories (days of supply) (44) d/s Shipments (k units) (50%) Net revenues ( M) 957 1,523 (37%) o Industry demand increased 7% with China +9%, South Korea +14%, India +7%, Australia +4%, Japan -2% o Group sales flat China +17% and Japan +21%, both outperforming their respective industries Australia -54% due to price increases to offset AUD weakness, South Korea -15% and India -35% Jeep brand (73% of regional Group sales) +32% y-o-y driven by strong sales of locally produced Jeep Cherokee in China o Shipments -50% due to transition to localized Jeep production o Net revenues -34% at CER primarily as a result of lower shipments, partially offset by favorable vehicle mix Adjusted EBIT walk ( M) %= Adjusted EBIT margin xx% % % 3.1% 4.4% 21 Q2 '15 (71) Volume & Mix 2 Net price Industrial costs % SG&A Other Q2 '16 o Volume & mix decrease driven by reduced shipments due to transition to Jeep localized production in China and lower volumes in Australia due to pricing actions to offset negative FX impacts o Industrial costs improved due to localization of Jeep production o SG&A improved primarily due to lower direct marketing expenses, now incurred by China JV o Other primarily reflects improved results from China JV B/(W) Q (9) 7 (7) Q Results July 27,

13 EMEA Q2 16 Q2 15 Sales (k units) % EU Market share - passenger cars 6.8% 6.4% 40 bps EU Market share - LCVs 12.9% 13.0% (10) bps Inventories (days of supply) Shipments (k units) % Net revenues ( M) 5,770 5,470 5% Passenger Cars o EU28+EFTA (EU) industry up 10% to 4.2M units with growth in all major markets: Spain and Italy +17%, France +8%, Germany +9% and UK +1% o EU sales up 17% to 285k units. EU market share up 40 bps driven by increases in Italy and Spain (+60 bps each), UK (+20 bps), France and Germany (+10 bps each) o Shipments of 292k (+13%) LCVs o EU industry up 14% to 573k units with growth in all major markets: Italy +26%, France +15%, Spain +18%, Germany +12% and UK +5% o EU sales up 13% to 74k units with market share down 10 bps o Shipments of 75k (+16%) Adjusted EBIT walk ( M) %= Adjusted EBIT margin % Q2 ' Volume & Mix 7 9 Net price Industrial costs (76) 2.5% SG&A Other Q2 '16 o Volume increase and favorable mix driven by Fiat 500 and Tipo vehicle families, and LCVs o Positive net price driven by pricing actions and positive FX impact offsetting increased incentives in EU o Industrial costs improvement due to manufacturing and purchasing efficiencies, partially offset by higher R&D and D&A costs o Higher SG&A primarily due to increased advertising to support new product launches B/(W) Q (33) (67) 8 47 Q Results July 27,

14 Luxury brand Maserati Q2 16 Q2 15 Q2 16 Shipments By Market Shipments 6,912 8,281 (17%) Net revenues ( M) (5%) Adjusted EBIT ( M) (16%) North America 35% Europe Top-5 18% Japan 3% Greater China 28% Commercial Performance o Shipments down due to lower volumes in North America (-26%) and Europe (-17%), partially offset by increase in China (+20%) Financial Performance o Net revenues decrease mainly due to lower volumes, partially offset by favorable vehicle and market mix and positive FX impacts o Adjusted EBIT down due to lower volumes, higher industrial and SG&A costs for all-new Levante and restyled Quattroporte launch activities, partially offset by favorable mix and FX o Q2 16 Adjusted EBIT margin at 6.2%, double Q1 16 margin of 3.1% Others 16% All-new Levante Creates a whole new class of SUV European commercial launch in Q2 Q Results July 27,

15 Components ( M) Net revenues Adjusted EBIT Margin Q2 '16 2,430 Q2 ' % Q2 '15 2,549 Q2 ' % o Net revenues reflects higher volumes at Magneti Marelli, more than offset by volume reduction at Comau and unfavorable FX impacts o Adjusted EBIT increase reflects higher volumes and favorable mix, partially offset by increased industrial costs. Adjusted EBIT margin improvement attributable to Magneti Marelli. o Magneti Marelli order intake was 603M in line with Q2 15, with non-captive orders at 57% o Comau order backlog was 1.2B, up 186M from March 31, 2016 Q Results July 27,

16 Industry outlook M units NAFTA (passenger cars, UVs, pickup trucks & LCVs) LATAM (passenger cars & LCVs) FY '16E FY '16E FY ' FY ' Forecast unchanged U.S. industry remains strong Forecast unchanged awaiting resolution of impeachment process expected in Aug 16 Continued weak market conditions indicates low-end of range APAC (passenger cars only) EMEA (EU28+EFTA) (passenger cars & LCVs) FY '16E FY '16E FY ' FY ' Forecast unchanged Modest industry growth continues Forecast unchanged H1 16 trend indicates high-end of range with minimal impact expected from Brexit Q Results July 27,

17 2016 guidance revised upwards Net revenues Original > 110B Revised Raised to > 112B Adjusted EBIT > 5.0B Raised to > 5.5B Adjusted net profit Net industrial debt > 1.9B < 5.0B Raised to > 2.0B Confirmed Q Results July 27,

18 APPENDIX Q Results July 27,

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 July 27,

20 Key performance metrics M Three months ended June 30, Six months ended June 30, ,175 1,191 Worldwide shipments (units 000) 2,261 2,284 27,893 28,540 Net revenues 54,463 54,383 1,060 1,226 EBIT 2,367 1,922 (568) (175) Adjustments (640) (179) 1,628 1,401 Adjusted EBIT 3,007 2, Of which: Result from investments (491) (619) Net financial expenses (1,003) (1,227) Profit before taxes 1, (248) (350) Tax expense (565) (411) Net profit Adjusted net profit 1, Q Results July 27,

21 Reconciliation of Adjusted EBIT to EBIT and Adjusted net profit to Net profit M Adjusted EBIT to EBIT Three months ended June 30, Six months ended June 30, ,628 1,401 Adjusted EBIT 3,007 2,101 (414) Recall campaigns - airbag inflators (414) (105) NAFTA capacity realignment (156) (80) Venezuela currency devaluation (19) (80) (81) U.S. National Highway Traffic Safety Administration (NHTSA) consent order (81) (60) (8) Restructuring costs (67) (12) (4) Impairment expense (4) 5 Gains on disposal of investments 5 6 (2) Other 11 (2) (568) (175) Total adjustments (640) (179) 1,060 1,226 EBIT 2,367 1,922 Adjusted net profit to Net profit Three months ended June 30, Six months ended June 30, Adjusted net profit 1, (568) (175) Adjustments (as above) (640) (179) Tax impact on adjustments (388) (115) Total adjustments, net of taxes (438) (119) Net profit Q Results July 27,

22 Reconciliation of Net industrial debt to Debt M Jun Mar Dec Net industrial debt 5,474 6,593 5,049 Net financial services debt 1,689 1,442 1,499 Net debt 7,163 8,035 6,548 Intercompany financial receivables/(payables), net (39) Current financial receivables from jointly-controlled financial services companies Other financial assets/(liabilities), net (397) Current securities Cash and cash equivalents 18,144 17,963 20,662 Debt 25,374 26,555 27,786 Q Results July 27,

23 Reconciliation of results for Ferrari separation M The following is a reconciliation of the Group's results as reported herein for the three and six months ended June 30, 2015 (represented 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 June 30, 2015 Six months ended June 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, ,193 Shipments (units 000) 2, ,288 28, ,228 Net revenues 54,383 1,241 55,624 1, ,348 EBIT 1, ,140 1, ,525 Adjusted EBIT 2, , Net profit Q Results July 27,

24 YTD Adjusted EBIT walk * M 2, (58) 157 (27) 33 (27) 3,007 H1 YTD '15 NAFTA LATAM APAC EMEA Maserati Components Other & Jun Eliminations H1 YTD '16 Jun ,007 2,101 YTD Jun Volume & Mix Net price Industrial costs SG&A Other YTD Jun * 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 July 27,

25 Market Share - mass-market brands % NAFTA LATAM Q2 13 Q2 14 Q2 15 Q2 16 Q2 13 Q2 14 Q2 15 Q2 16 APAC EMEA Q2 13 Q2 14 Q2 15 Q2 16 LCV Passenger Cars LCV Passenger Cars Q2 13 Q2 14 Q2 15 Q2 16 Market share is based on retail registrations except in India where market share is based on wholesale volumes Q Results July 27,

26 Debt maturity schedule B Outstanding Jun M Beyond 9.6 Bank Debt Capital Market Other Debt Total Cash Maturities* Cash & Mktable Securities 6.2 Undrawn Committed Revolving Facilities 24.7 Total Available Liquidity 5.8 Sale of Receivables (IFRS de-recognition compliant) 3.6 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 July 27,

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