Monday, August 24, 2015
FIAT Chrysler Automobiles produces it first quarter results, not too bad, could be better !
FCA closed Q1 with net revenues of €26.4 billion, up 19% and adjusted EBIT at €800 million, up 22%. Net industrial debt was €8.6 billion, up €0.9 billion.
Full year guidance confirmed.
- Worldwide shipments were 1.1 million units, 2% lower than Q1 2014, reflecting strong performance in NAFTA and weak market conditions in LATAM. Jeep's positive performance continued with worldwide shipments up 11% and sales up 22%.
- Net revenues were up 19% to €26.4 billion (+4% at constant exchange rates, or CER).
- Adjusted EBIT was €800 million, up €145 million from Q1 2014, with all segments except LATAM posting positive results. The positive impact of foreign exchange translation was offset by negative impacts at a transactional level.
- Net profit was €92 million, up €265 million compared to the net loss of €173 million in Q1 2014.
- Net industrial debt was €8.6 billion, up €0.9 billion from year-end mainly due to timing of capital expenditures and working capital seasonality. Liquidity remained strong at €25.2 billion.
- The Group confirms its full-year guidance.
Net revenues for Q1 2015 were €26.4 billion, an increase of €4.3 billion, or 19% (+4% CER) from €22.1 billion for first quarter 2014. Higher revenues in NAFTA (+38%; +13% CER), EMEA (+8%; +6% CER) and Components (+17%; +12% CER) were partly offset by decreases in LATAM (-21%; -24% CER) and Maserati (-19%; -29% CER).
Adjusted EBIT was €800 million, up €145 million (+22%) due to improved performance in NAFTA and continued progress in EMEA, which posted a positive result for the second consecutive quarter. The year-over-year results reflect a positive translation impact from the strengthening U.S. Dollar, which was offset by negative transactional impacts, primarily the strengthening of the U.S. Dollar on NAFTA vehicles and components supplied to other regions and the weakening of the Canadian Dollar on revenues from sales in Canada.
NAFTA improved by over €200 million to €601 million driven by higher volumes and improved net pricing, which was partially offset by the negative impacts of the weakened Canadian Dollar and Mexican Peso and increased warranty and recall costs. NAFTA margins improved to 3.7% from 3.2% and excluding the impact of campaign costs were at 5.0% compared to 3.8% a year ago. Adjusted EBIT for LATAM decreased by €109 million to -€65 million, reflecting lower volumes due to the market conditions and Pernambuco start-up costs, partially offset by favorable pricing. Excluding the launch costs for the new Pernambuco plant LATAM would have been at break-even for the quarter. Adjusted EBIT for APAC decreased by €70 million as a result of lower volumes and unfavorable net pricing, primarily due to foreign exchange effects from Chinese Renminbi, Australian Dollar and Japanese Yen.
With regards to the adjustments from EBIT to Adjusted EBIT, it should be noted that the Group Adjusted EBIT for Q1 2014 primarily excludes the one-off charge of €495 million in connection with the UAW Memorandum of Understanding entered into by FCA US in January 2014, the effect of the devaluation of the Venezuelan Bolivar of €94 million and the non-taxable gain of €223 million on the fair value re-measurement of the previously exercised options in connection with the acquisition of FCA US. There were no such similar one-off charges in the current quarter.
Net financial expense totalled €606 million, €113 million higher than in first quarter 2014, primarily due to unfavorable currency translation and higher debt levels in Brazil.
Tax expense totalled €94 million, compared with tax income of €50 million in the first quarter 2014, principally due to an increase in profit before tax when adjusted for non-taxable items.
Net profit for the quarter was €92 million, compared with a loss of €173 million for first quarter 2014, which included the items described above for Adjusted EBIT. Profit attributable to owners of the parent was €78 million compared with a €189 million loss for first quarter 2014.
Net industrial debt at March 31, 2015 was €8.6 billion, up from €7.7 billion at December 31, 2014. The €0.9 billion increase primarily reflects capital expenditures of €2.1 billion, which were €0.6 billion higher than Q1 2014, and seasonal cash absorption from working capital.
Total available liquidity was €25.2 billion, €1.0 billion lower than December 31, 2014. During the quarter, operating cash absorption and €1.5 billion bond repayments at maturity were partially offset by favorable currency translation.
2015 Outlook
The Group confirms its full-year guidance:
- Worldwide shipments in 4.8 to 5.0 million unit range;
- Net revenues of ~€108 billion;
- Adjusted EBIT in €4.1 to €4.5 billion range;
- Net Profit in €1.0 to €1.2 billion range, with Basic EPS in €0.64 to €0.77 range;
- Net Industrial Debt in €7.5 billion to €8.0 billion range.
Figures do not include any impacts for the previously announced capital transactions regarding Ferrari.
Results by Segment
Shipments were 633,000 vehicles (+8%) and sales1 totaled 587,000 vehicles (+6%). Market share was 12.5% in the U.S (consistent with first quarter 2014) and 16.4% in Canada (down 20 bps).
Net Revenues were €16.2 billion, up 38% (+13% CER) primarily due to volume growth for Jeep Renegade, Chrysler 200 and Ram 1500 and favorable foreign currency translation effects.
Adjusted EBIT of €601 million, as compared with €380 million in first quarter 2014, reflects higher volumes, improved net pricing and purchasing efficiencies, partially offset by higher warranty and recall costs and higher base material costs for vehicle content enhancements. Adjusted EBIT for Q1 2014 excludes the one-off charge of €495 million in connection with the UAW Memorandum of Understanding entered into by FCA US in January 2014. NAFTA margins improved to 3.7% from 3.2% and excluding the impact of campaign costs were at 5.0% compared to 3.8% a year ago.
1 For US and Canada, "Sales" represents sales to end customers as reported by the Group's dealer network.
Shipments were 135,000 vehicles, a decrease of 34% reflecting continued macroeconomic weakness and poor trading conditions in the region's principal markets. Market share in Brazil was 19.7%, down 300 bps, due to the launch of new products by our competitors and pricing pressures, however the Group remained the leader in the market for Q1 with a 250 bps lead over the nearest competitor. In Argentina, market share declined from 13.2% in first quarter 2014 to 12.6% in first quarter 2015 mainly due to continued import restrictions.
Net Revenues were €1.6 billion, down 21% (-24% CER) primarily due to lower volumes.
Adjusted EBIT was -€65 million in first quarter 2015, down from €44 million in first quarter 2014, reflecting lower volumes and unfavorable mix, higher raw material costs, new vehicle launch and Pernambuco start-up costs, partially offset by positive net pricing. Excluding the launch costs for the new Pernambuco plant LATAM would have been at break-even for the quarter. Adjusted EBIT for Q1 2014 excluded the €94 million effect of the devaluation of the Venezuelan Bolivar.
Shipments (excluding JVs) totalled 47,000 vehicles, down 13%, primarily due to competitive market actions and in preparation of localized production. Group retail sales (including JVs) were consistent with first quarter 2014 at 59,000 vehicles.
Net Revenues were €1.5 billion, consistent with Q1 2014, but 17% lower at CER.
Adjusted EBIT was €65 million, a decrease of €70 million driven by lower volumes and unfavorable net pricing, primarily due to foreign exchange effects for vehicle sales in China, Australia, and Japan as well as some increase in incentive levels in China.
Passenger car and light commercial vehicle (LCV) shipments totaled 271,000 units, up 5% over first quarter 2014. Passenger car shipments were up 4% to 212,000 units and LCVs were up 7% to 59,000 units. European passenger car market share (EU28+EFTA) was up 20 bps to 6.2% (28.3% in Italy). For LCVs, European market share2 (EU28+EFTA) was down 40 bps to 11.0% (45.4% in Italy).
Net Revenues were €4.7 billion (+8%) on the back of higher volumes, as well as favorable product mix driven by the all-new Fiat 500X and Jeep Renegade and favorable foreign exchange effects.
Adjusted EBIT for first quarter 2015 was €25 million, compared with -€72 million for the same quarter in 2014. The €97 million improvement in EBIT was primarily attributable to a more favorable product mix - reflecting the continued success of the Fiat 500 family and Jeep brand - in addition to increased volumes, specifically from Fiat 500X and Jeep Renegade, and positive net pricing, which were partially offset by increased sales and marketing spending to support the Jeep brand growth and the Fiat 500X launch.
2Due to unavailability of market data for Italy since January 2012, the figures reported are an extrapolation and discrepancies with actual data could exist.
Net Revenues were consistent with Q1 2014 at €621 million reflecting favorable currency exchange effects, offset by reduced shipments.
Adjusted EBIT of €100 million, compared with €80 million in first quarter 2014, primarily reflects lower R&D costs, due to timing of model development, and favorable currency exchange effects.
Net revenues totalled €523 million, down 19% (-29% CER) from Q1 2014, primarily due to weaker demand in China.
Adjusted EBIT decreased to €36 million from €59 million in Q1 2014 primarily due to lower volume and unfavorable mix, partially offset by cost efficiencies.
Magneti Marelli
Net revenues were €1.8 billion, a 15% increase over first quarter 2014. Performance was positive in Europe, partially offset by contraction of the market in Brazil.
Adjusted EBIT was €56 million, an increase of €13 million from first quarter 2014 primarily related to higher volumes and the benefit of cost containment actions and efficiencies, partially offset by start-up costs related to the plant in Pernambuco, Brazil.
Teksid
Revenues were €180 million, an 11% growth over first quarter 2014 primarily attributable to a 37% increase in aluminum business volumes, offset by an 8% decrease in cast iron business volumes.
Adjusted EBIT was €1 million, compared with -€4 million in first quarter 2014 primarily from increased cost efficiencies.
Comau
Revenues were €468 million, a 30% increase (+18% CER) from Q1 2014, primarily due to body welding, powertrain and robotics businesses.
Adjusted EBIT was €11 million, a €2 million increase from first quarter 2014 primarily due to increased volumes.
Brand activity in the quarter
The all-new Jeep Renegade began selling in NAFTA, the brand's first small SUV in the region, and was named Kelley Blue Book's "10 Favorite New-for-2015 cars" and Ward's "10 Best Interiors" for 2015. In addition, the Maserati Alfieri was honored as "Concept Car of the Year" by Car Design News at the Geneva Motor Show, while Magneti Marelli technologies (including lighting, powertrain and electronic systems) are on board five of the seven finalists of the prestigious "Car of the Year 2015" award.
New launches during the quarter included the Ram Promaster City compact commercial van, which is derived from the fourth generation Fiat Doblo, and the all-new Fiat 500X, which was launched in Italy with pre-launch events in 16 other countries.
The Alfa Romeo 4C Spider and two new models for Ram, Rebel and Laramie Limited, were also revealed at the Detroit Auto Show in January 2015 and the new Ferrari 488 and the Fiat 500X, with its innovative dual-clutch sequential automatic transmission, were presented at the Geneva Motor Show in March 2015.
Additionally, both the 6.2-liter HEMI® Hellcat and the 3.0-liter EcoDiesel engines were included on Ward's 10 Best Engines list for 2015. This was the second straight year the 3.0-liter EcoDiesel was included on the list.
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