Fiat Q1 2013 results

Page 1

An undesired hiatus in preparation for a strong second half Q1 2013 Results Review

20 Novembre, 2010


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April 29, 2013

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Q1 2013 Results Review

2


Q1 „13 Executive summary

• •

• •

Worldwide shipments for mass-market brands exceeding 1.0mn units, in line with prior year’s level Group financial results reflecting impact of key product launches in NAFTA

Revenues at €19.8bn

Trading profit of €618mn

EBIT of €603mn

Net profit of €31mn

Net industrial debt at €7.1bn

Available liquidity strong at over €21bn (including €3.0bn in undrawn committed credit lines)

Group repaid a €1bn bond at maturity and successfully tapped debt capital markets with a €1.25bn bond issuance (6.625% fixed coupon, due Mar 2018) Group 2013 guidance confirmed, as follows

Revenues in €88-92bn range

Trading profit in €4.0-€4.5bn range

Net profit in €1.2-€1.5bn range

Net industrial debt of ~€7.0bn

VEBA

Hearing before Delaware Court held on Apr 25th to resolve dispute on purchase price of 1st tranche of call option

Chrysler continuing to work on preparation for eventual IPO

April 29, 2013

Q1 2013 Results Review

3


Q1 ‟13 financial highlights A challenging quarter for NAFTA Net revenues (€mn)

Net profit (€mn)

• Group top-line down 2% in nominal terms

• Loss of €83mn attributable to owners of the parent (€35mn profit for Q1 2012)

• Group revenues flat year-over-year at constant exchange as increases for LATAM, APAC and Luxury & Performance brands almost fully compensated decreases in NAFTA, and EMEA

20,221

19,757 262

• Fiat excl. Chrysler reduced net loss by €41mn over Q1 2012 to €235mn

31 Q1 ‟12

Q1 „13

Q1 ‟12

(1)

Q1 „13

• Income taxes of €129mn  Income taxes of €100mn for Fiat excl. Chrysler related primarily to taxable income of companies operating outside Italy and employment-related taxes in Italy

Trading profit (€mn)

Net industrial debt (€bn)

• Decrease in Group trading profit primarily attributable to a ~€200mn reduction for NAFTA

• Net industrial debt increased due to seasonal cash absorption for Fiat excl. Chrysler partially offset by cash generation for Chrysler

 Trading margin of 3.1%

7.1 806

6.5

• Mass-market brands

• For Fiat ex Chrysler net industrial debt at €5.7bn, a €0.7bn increase over year-end 2012 entirely attributable to Capex for the period

618

 NAFTA: €397mn (+4.0% margin)  LATAM: €186mn (+7.5% margin)

 Change in net industrial debt for the quarter significantly lower at half the amount for Q1 2012

 APAC: €100mn (+10.3% margin)

• Chrysler reduced net industrial debt by €0.1bn to €1.4bn

 EMEA: -€157mn (-3.6% margin) • Luxury & Performance Brands: €76mn (+11.1% margin)

Q1 ‟12

(1)

Q1 „13

Dec 31 „12

Mar 31 „13

20.8

21.3

2.9

… 3.0

• Components: €33mn (+1.7% margin)

EBIT (€mn) • Mass-market brands

Liquidity (€bn) 835

 NAFTA: €400mn

603

 LATAM: €127mn  APAC: €98mn

17.9

18.3

Dec 31 „12

Mar 31 „13

 EMEA: -€111mn • Luxury and Performance brands: €76mn • Components: €35mn (1)

• Group liquidity inclusive of undrawn committed credit lines (unchanged in the quarter) increased vs. 2012 exit levels as exchange rates contributed positively for €0.4bn (€0.3bn for Chrysler)  Fiat excl. Chrysler at €11.0bn (€11.1bn at 2012 year-end)  Chrysler at €10.3bn (€9.8bn at Dec. 31, 2012)

Q1 ‟12

(1)

Q1 „13

Restated for adoption of IAS 19 as amended (Trading Profit/EBIT reduced by €60mn; Net Profit reduced by €117mn)

April 29, 2013

 Over €1bn in positive cash flow from operating activities offset by €0.9bn in Capex

Undrawn committed credit lines Cash & Mktable Securities

Q1 2013 Results Review

4


Q1 ‟13 financial highlights Performance by segment Group revenues in line with prior year 20.2 19.8

MASS-MARKET BRANDS

10.4 10.0

2.6 2.5

NAFTA

LATAM

0.7 1.0

0.7 0.7

APAC

EMEA

Ferrari & Maserati

2.0 1.9 (0.6) Components

(0.7)

Other & Eliminations

235

127

85

603

98

APAC

71

76

35

(46) (22)

(111)

EMEA

35

Ferrari & Maserati

Components

(1)

Other & Fiat Group (1) Eliminations

(1) 2012 restated for adoption of IAS 19 as amended (NAFTA: -€56mn; Components: -€1mn; Eliminations and Adjustments: -€3mn) Note: Graphs not to scale

April 29, 2013

835

(170) LATAM

NAFTA down 3%, due to lower shipments partly offset by positive pricing, and EMEA down 4% LATAM down 5% (+6% at constant exchange rates) APAC up 35+% Luxury and Performance brands up 4%, driven by Ferrari Components down 4%

A €232mn decrease in EBIT mainly reflected lower trading profit in NAFTA and LATAM

2013 EBIT before unusuals €186mn

400

(1)

Fiat Group

Q1 2013

MASS-MARKET BRANDS 625

• •

4.5 4.4

Q1 2012

NAFTA

Q1 2013 Results Review

(1)

• •

NAFTA down 36% due to lower shipments as well as industrial costs associated with new model launches LATAM down 21% excl. €59mn in unusual charges related to currency devaluation in Venezuela, or -10% at constant exchange APAC up 15% EMEA reduced losses by €59mn primarily on the back of discipline in SG&A spending 5


Q1 ‟13 From trading profit to net result €mn (unless otherwise stated)

Fiat Group Q1 ‘13

Worldwide Shipments (mass-market brands - Units „000)

Net Revenues Trading Profit

Q1 ’12

(1)

Q1 ’13

Q1 ‘12

1,017

1,019

460

452

19,757

20,221

8,557

8,685

618

% of revenues

Fiat ex Chrysler

806

25

(1)

(10)

+3.1%

+4.0%

+0.3%

-0.1%

32

18

32

18

EBIT BEFORE UNUSUALS

650

824

57

8

Unusual items, net

(47)

11

8

-

EBIT

603

835

65

8

1,654

1,869

622

546

(443)

(432)

(200)

(165)

160

403

(135)

(157)

(129)

(141)

(100)

(119)

31

262

(235)

(276)

Investment income, net

EBITDA Financial charges, net Pre-tax result Taxes Net result

2)

Note

April 29, 2013

(1)

Restated for adoption of IAS 19 as amended (Trading Profit/EBIT reduced by €60mn; Profit before Taxes/Net Profit reduced by €117mn)

(2)

“Financial charges, net” includes a €15mn gain from the mark-to-market value of stock option-related equity swaps (€38mn in Q1 ‟12) Q1 2013 Results Review

6


Q1 „13 net industrial debt walk Seasonality for Fiat excl. Chrysler, slight reduction for Chrysler Change in Net Industrial Debt (560)

€mn

Cash Flow from operating activities, net of Capex (476)

1,619 135 (502)

(160)

(6,545)

December 31, 2012

(1,568) Industrial EBITDA

Financial Charges & Taxes

Change in Funds & Other

Working capital

Capex

(26) Investments, Scope & Other

(1) Capital increase /Repos/ Dividends

(57) FX translation effect

(7,105) March 31, 2013

Seasonal cash absorption for Fiat excluding Chrysler and modest cash generation for Chrysler

Fiat excl. Chrysler: net industrial debt at €5.7bn, a €0.7bn increase over year-end 2012 entirely attributable to Capex for the period; slightly positive cash flow from operating activities

Chrysler: reduced by €0.1bn to €1.4bn, with over €1bn in positive cash flow from operating activities offset by €0.9bn in Capex

April 29, 2013

Q1 2013 Results Review

7


1

MASS-MARKET

2

LUXURY

3

COMPONENTS AND PRODUCTION SYSTEMS

4

BUSINESS ENVIRONMENT OVERVIEW

5

2013 GUIDANCE

AND

BRANDS BY

REGION

PERFORMANCE

BRANDS


Mass-market brands Highlights FINANCIAL PERFORMANCE

• •

Quarter impacted by ongoing launches of new 2014 Jeep Grand Cherokee and 2013 Ram HD Pickups, and no production of Jeep Liberty as plant prepared for launch of all-new 2014 Jeep Cherokee, even as sales remain strong Revenues down 3.5% primarily due to lower shipment volume partially offset by continued favorable pricing Trading profit down 35% due to lower volumes and industrial costs related to launch of new products partially offset by continued strong net pricing

Trading margin down 190 bps to 4.0%

COMMERCIAL PERFORMANCE & HIGHLIGHTS

• TOTAL NAFTA

Q1 ’13

Q1 ’12

510

519

Shipments (k units)

Revenues

10,012 10,375

(€mn)

Trading Profit

(1)

(€mn)

EBIT

(1)

(€mn) (1)

397

614

400

625

• • •

Overall vehicle shipments down 2% in the region

  

U.S.: 420k vehicles (down 0.5%) Canada: 70k (down 7%) Mexico: 20k (down 8%)

Group vehicle sales increased 7% to 508k units, with sales in U.S. up 8% and Canada up 4%, outpacing both markets U.S. & Canada combined sales

Dodge +22%, Ram +13%, Fiat +3%, Chrysler +2%, Jeep -10%

During the quarter, Group also leveraged inventory to compensate for lower production volumes due to changeover of some key models

U.S. dealer inventory reduced 10% to 66 days supply in the quarter

2012 restated for adoption of IAS 19 as amended

April 29, 2013

Q1 2013 Results Review

9


Mass-market brands EBIT walk €mn

• 192 625

(108)

400 (277)

(2)

(30)

• Q1 2012

(1)

(1)

Volume & Mix

Net price

Industrial costs

SG&A

Investments / Q1 2013 FX / Other

Volume decrease of 9k vehicles due to preparation for all-new Jeep Cherokee and also to launches of key products, namely Jeep Grand Cherokee and Ram HD trucks Positive net price reflecting pricing actions primarily driven by vehicle content enhancements Industrial costs impacted by start-up costs and content enhancements related to new Jeep Grand Cherokee and Ram HD pickups

2012 restated for adoption of IAS 19 as amended

April 29, 2013

Q1 2013 Results Review

10


Mass-market brands Market trends & business dynamics INDUSTRY VOLUME & OUTLOOK (MN

UNITS)

U.S.

• • 3.8

3.5 Q1 '12

Q1 '13

0.37

0.36

Q1 '12

Q1 '13

16.0

15.0

11.4

11.2 9.2

9.1 Q1

Q2

Q3

2010

Q4

Q1

Q2

Q3

2011

Q4

Q1

March being the 36th consecutive month of year-overyear sales gains

March sales posted the best month since Dec 2007

Market share up 20 bps, driven by 12% increase in retail (excl. fleet) sales Retail of retail market share* at 10.4%, up 40 bps Fleet mix at 28%, down from 31% in Q1 „12

CANADA

(%)

13.7

Cars +3%; Trucks +9%

Q1 „13 Group sales up 8% vs. a year ago

 

QUARTERLY MARKET SHARE

14.7

Q1 „13 industry up 6% vs. prior year

Q2

Q3

2012

Q4

Q1

Q1 ‟13 industry down 2% vs. prior year

Q1 „13 Group sales up 4% vs. last year

Cars -5%; Trucks flat

 

Market leader for the quarter

Best March sales since 2000, and also the best month ever for Ram truck sales

With March sales, Group posted the 40th consecutive month of year-over-year sales gains

Market share up 100 bps vs. prior year

Gain mainly driven by strong performance for Ram truck, Jeep Compass and sales of new Dodge Dart

Retail of retail market share* at 14.1%, up 90 bps

2013 *Company

calculation; retail sales (excluding fleet) versus industry retail sales (excluding fleet)

April 29, 2013

Q1 2013 Results Review

11


Mass-market brands Highlights FINANCIAL PERFORMANCE • Key markets holding up well throughout the region, with positive trading conditions particularly in Brazil

 

• •

Revenues down 5% due to negative FX translation (+6% at constant exchange rate, reflecting overall shipment volumes improvement) Trading profit performing to expectations, in line with FY €1+bn target

   TOTAL LATAM

Shipments (k units)

Revenues (€mn)

Trading Profit (€mn)

EBIT (€mn)

April 29, 2013

Q1 ‘13

Q1 ‘12

230

215

2,468

2,587

186

235

127

235

Q1 all-time record for Brazilian market Other LATAM countries down 3% mainly due to political uncertainty in Venezuela

Net of currency translation impacts, trading profit down 10% due to a less favorable production mix and lower volumes for Freemont and 500 (effect of import quotas from Mexico introduced during 2012) Results for Brazilian ops in line with prior year Trading margin at ~8%

COMMERCIAL PERFORMANCE & HIGHLIGHTS • Total Group shipments up 7%

 

• •

Brazil: 191k units (+8%) Argentina: 29k units (+14%) on the back of improved supply of imported vehicles from Brazil Other LATAM markets: 10k units (-24%)

Group outpaced industry in both Brazil & Argentina

 

Best Q1 share in Brazil since 2010 Increased distance with nearest competitor, now at 300 bps

Sound company & dealer inventory levels (~30 days supply at quarter-end) in support of sustained industry trend also backed by extension of IPI tax reduction

Q1 2013 Results Review

12


Mass-market brands EBIT walk

€mn

235

33

2

• (35)

(10) 127 (98)

• Q1 „12

Volume & Mix

Net price

Industrial costs

SG&A

Investments FX / Other

Q1 „13

April 29, 2013

Q1 2013 Results Review

Positive volume effect (mainly in Brazil) and better mix, notwithstanding lower imports from Mexico Inflationary cost increases in labor and other expenses, negative production mix (shift of annual shutdown of Brazilian plant from Dec 2012 to Feb 2013), partially offset by Inovar Auto Program benefits and industrial efficiencies SG&A driven by new advertising campaigns in Brazil Other mainly relates to currency translation effects and €59mn unusual impact related to currency devaluation in Venezuela 13


Mass-market brands Market trends & business dynamics INDUSTRY VOLUME & OUTLOOK

REGIONAL Q1 OVERVIEW

(TOTAL LATAM; MN UNITS)

1.35

1.35 0.27

0.34

1.08

Q1 '12

Q1' 13 Passenger cars

 

• 1.01

Brazil

LCVs

(PASSENGER CARS & LCVS; %)

Argentina

12.0

22.9

22.7

12.2

12.1

11.0

Q2

Q3

2010

Q4

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

2013

 April 29, 2013

Q1 2013 Results Review

In May 2012, Brazilian Government reduced IPI tax by up to 7% to boost vehicle sales Reduced IPI rates originally set to be gradually phased out during H1 2013, with progressive quarterly rate increases starting from January In March 2013, Government extended current reduced rates until 2013 year-end, therefore only January partial increase applies

Inovar Auto Program: implementation ongoing to strengthen Brazilian industry

 Q1

Share gain on the back of improved flow for imported vehicles and components from Brazil and strong performance of new locally-produced Novo Palio

IPI tax reduction

 22.3

Strengthened market leadership driven by continued success of Novo Palio, Siena, Grand Siena and Strada models

UPDATE ON INCENTIVE SCHEMES IN BRAZIL

QUARTERLY MARKET SHARE

22.4

Q1 historical sales record for the Group (3% higher than a year ago), notwithstanding longer downtime at Betim plant for Carnival season

Program to provide a series of tax incentive schemes for investment dedicated to energy efficiency improvements, R&D and engineering to promote technological development Group well positioned to participate in and fully benefit from this program

14


Mass-market brands Market trends & business dynamics FINANCIAL PERFORMANCE

• •

• Q1 ‘13

Q1 ’12

Shipments

32

25

Revenues

968

714

Trading Profit

100

77

TOTAL APAC

(k units) (€mn) (€mn)

EBIT (€mn)

98

April 29, 2013

Revenues up 36% (+38% at constant exchange rates) primarily driven by Jeep, Chrysler and Dodge brands (90% of total revenues)

Shipments up 28%

Trading profit up 30%

Increase primarily driven by volume growth, partly offset by increased industrial costs and SG&A to support business expansion

Trading margin at 10.3%

EBIT up 15%

COMMERCIAL PERFORMANCE & HIGHLIGHTS

• •

85

APAC industry reflects aggregate key markets where Group is competing (i.e. China, India, Australia, Japan, South Korea)

Positive demand conditions in the region with double-digit growth in China offsetting weaker demand in India & Japan

Retail sales (incl. JVs) up 45% on the back of strong performance of Jeep and Fiat brands

Continued share gain for Jeep with sales (more than half of total APAC) up 26% vs. prior year

Fiat, region‟s second best selling brand, up 71% driven by recent launch of Fiat Viaggio

Re-launch of Fiat brand in South Korea, with introduction of Fiat 500, 500C and Freemont in February Increased penetration of Fiat, Alfa Romeo and Fiat Professional brands in Australia on track thanks to smooth Group integration in the country Dodge Journey returning to China market with best-inclass spaciousness and safety features

Q1 2013 Results Review

15


Mass-market brands EBIT walk €mn

• •

47 (1)

(6)

85

(21)

98 (6)

Q1 2012

April 29, 2013

Volume & Mix

Net price

Industrial costs

SG&A

Investments / Q1 2013 FX / Other

Q1 2013 Results Review

Improved volumes driven by 28% higher shipments Industrial costs impacted mostly by higher ER&D related to new product launches and higher fixed manufacturing costs associated with increased production volume Increased selling expenses to support volume growth and continued regional expansion including introduction of Dodge, Fiat, Alfa Romeo and Fiat Professional brands in several key markets

16


Mass-market brands Market trends & business dynamics INDUSTRY VOLUME

(PASSENGER

CARS

& LCVS;

(1)

MN UNITS)

REGIONAL OVERVIEW Group sales (incl. JV) up 45% outperforming industry (+6%) driven by strong performance in China and Australia

6.5

6.2

CHINA

• Q1 '12

Q1 '13

QUARTERLY MARKET SHARE (PASSENGER

CARS

& LCVS; %)

3.0%

2.0% 1.4% 1.2% 0.7%

0.2% 0.2% Q2

Q3

2010 (1)

Q4

0.6%

0.3%

0.3%

0.3%

0.3%

0.3%

0.1%

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Fiat +48%, Alfa Romeo +32%, Fiat Professional more than double in volumes vs. a year ago

Strong sales growth for Jeep (+45%) with share gain of 580 bps for Grand Cherokee in full-size SUV segment

JAPAN

Q1

2013

Reflects aggregate key markets where Group is competing (i.e. China, India, Australia, Japan, South Korea)

April 29, 2013

Q1 sales up 65% outperforming industry (up 5%), posting share gain of almost 110 bps, second best in market

0.8%

1.1%

Jeep Compass and Fiat Viaggio as top-selling nameplates

AUSTRALIA

Q1

Group sales more than double last year‟s levels, driven primarily by Jeep and Fiat brands, representing best sales improvement in market (industry +18%)

Group sales continued to be driven by Jeep brand (+3%) despite a normalizing industry (-9%) after strong recovery in 2012 from earthquake

SOUTH KOREA

Demand slightly down with Group sales bucking the trend up 20%, driven by Jeep brand (+50%) and launch of Fiat brand in February

Q1 2013 Results Review

17


Mass-market brands Highlights FINANCIAL PERFORMANCE

Still difficult trading conditions in the Eurozone, prolonging market weakness to 18 consecutive months

  

• • Q1 ‘13

Q1’ 12

245

260

4,350

4,508

Trading Profit

(157)

(207)

EBIT

(111)

(170)

TOTAL EMEA

Shipments (k units)

Revenues (€mn)

(€mn) (€mn)

Note (!) Harbour definition: 235 days p.a. / 16 hours per day (2) Technical definition: 280 days p.a. / 3 shifts per day

April 29, 2013

Passenger car segment registered a significant year-over-year decline Weak LCV industry with overall demand again reflecting sharp decline in Italy Highly competitive environment driven by price pressure, particularly for mass-market segments

Revenues down 3.5% mainly reflecting volume declines Trading loss significantly reduced

A ~25% improvement, or €50mn, driven by discipline in SG&A spend and positive results for 500L more than offsetting lower volumes and continued pricing pressure

Reduced EBIT loss reflecting improvement in both trading performance and result from investments, with JVs contributing €38mn in the quarter

COMMERCIAL PERFORMANCE & HIGHLIGHTS

Total shipments down 15k units, a 6% decline fully attributable to Italy

 

Passenger cars: down 8% to 195k units LCVs: up 5% to 50k units with increases in EU27+EFTA ex Italy more than compensating for decline in domestic market

Strict management of supply and demand function

Company & dealer inventory remained at optimal levels (~2 months supply)

Utilization rate at plants in EMEA, including JVs, stable at 65% (Harbor(1) definition) or 40+% (Technical(2) definition)

Q1 2013 Results Review

18


Mass-market brands EBIT walk €mn

7

88

• (111)

15 2

(170)

(53)

Q1 2012

April 29, 2013

Volume & Mix

Net price

Industrial costs

SG&A

Investments / Q1 2013 FX / Other

Q1 2013 Results Review

Negative volume, reflecting decline in passenger car shipments, more than compensated for by better mix (mainly 500L) Continued pricing pressure, particularly for mass-market segments Industrial costs slightly positive on the back of WCM program efficiencies Continued tight grip on SG&A spend backed up by actions undertaken in latter part of 2012

19


Mass-market brands Passenger cars: market trends & business dynamics INDUSTRY VOLUME & OUTLOOK (MN

UNITS)

EU27+EFTA

EU27+EFTA

• 3.4

3.1

Q1 '12

Q1 '13

0.41

0.36

Q1 '12

Q1 '13

• •

QUARTERLY MARKET SHARE (%)

29.3

8.8

7.3

27.9

29.0

6.3

6.4

Q3

2010

April 29, 2013

Q4

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

2013

Q1 2013 Results Review

An average of 13% decrease in demand elsewhere in Europe with economic downturn also significantly impacting northern Europe

Gain in Italy largely overridden by further reduction in weighting of Italian market (now 11.5% of total European market) Fiat Panda & 500 ranked #1 & 2 respectively in A-segment Few months after launch, Fiat 500L ranked #2 in its segment for the quarter

ITALY

EU27+EFTA Q2

Double-digit decreases in France (-15%), Germany (-13%), Italy (-13% ), Spain (-11%)

Q1 Group sales down 9% to 197k cars with Fiat brand flat vs. a year ago Share gain of 10 bps in Q1

31.6

Q1

Q1 industry declined 10% with sales down in all major markets, except UK (+7%)

Higher demand in alternative fuel segment (CNG & LPG combined market +48%) unable to counter persisting weakness in market demand Q1 share gain (110 bps) driven by performance in A- & Small MPV- segments

20


Mass-market brands LCVs: market trends & business dynamics INDUSTRY VOLUME & OUTLOOK (MN

UNITS)

EU27+EFTA

0.42

0.38

Q1 '12

Q1 '13

0.03

0.02

Q1 '12

Q1 '13

(%)

46.9

13.5

43.5

42.3

12.8

All major markets posted double-digit declines with UK bucking the trend (+11%)

Q1 Group sales down 7% to 44k units in EU27+EFTA

QUARTERLY MARKET SHARE*

46.8

Continued industry decline in EU27+EFTA in Q1 (-10%) with overall demand reflecting sharp reduction in Italy (-24%)

Fiat Ducato outperformed market, posting a 180 bps share gain in Q1

Fiat Professional outpaced the industry with performance in all markets contributing to 40 bps share gain in EU27+EFTA, including

  

Germany +180 bps Spain +160 bps Italy +120 bps

11.6

11.2

EU27+EFTA Q1

Q2

Q3

2010

Q4

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

2013

* Due

to unavailability of official data for the LCV market since Jan 2011, figures reported beyond that date are an extrapolation. Therefore, marginal discrepancies versus actual data may exist

April 29, 2013

Q1 2013 Results Review

21


Luxury & Performance brands

2

Ferrari & Maserati

• Revenues up 8% to €551mn, primarily on the back of higher sales volumes

a year ago

Shipments of 1,798 street cars (+4% vs. Q1 2012) 

8-cyl models +5% driven by 458 Spider

12-cyl in line with prior year, supported by F12 Berlinetta

USA +14%, remaining brand‟s #1 market

Asia-Pacific +18% with double-digit growth in Japan and continued positive performance in Australia

China in line with prior year

Europe: positive performance in Switzerland unable to offset declines in major markets, particularly Italy (-54%)

Middle East (+74%); South Africa (+45%)

Shipments of 1,304 vehicles, down 5% vs. prior year 

Volumes for Quattroporte down as a result of changeover to new model (production entered in late January)

As a consequence, Greater China (China, Hong Kong and Taiwan) down 16%, Japan down 14%, Mid-East down 48%

By contrast, shipments up in Latin America (+56%), Europe (+42%), and USA (+1%)

• Trading loss of €4mn vs. €16mn profit a year ago

• Trading profit up 43% to €80mn 

• Revenues down 4% to €157mn compared to

Strong performance reflected higher sales volumes, as well as contribution from licensing and personalization program

Performance primarily reflected lower volumes and higher costs associated with launch of new Quattroporte

Trading margin at 14.5%

USA 25%

Others 29%

April 29, 2013

European Top-5 34%

USA 45%

Japan 4% China, Hong Kong & Taiwan 8%

European Top-4 13% Japan 5% China 12%

Others 25% Q1 2013 Results Review

22


Components & Production Systems

3

• Operational Highlights

Q1 „13

constant exchange rates) in NAFTA, China and Brazil, partly offset by contractions in Europe

29

30

Q1 „12

Q1 „13

• New orders of €465mn

acquired in Q1 (+25% vs. Q1 2012), mainly related to Powertrain and Exhaust Systems

223

173 3 Q1 „13 Q1 „12

Q1 „13

(6)

Lighting up 7% on the back of performance in China, as well as NAFTA with several new products launched in H2 „12, only partially offset by a general decline in Europe

Electronic Systems up 20% due to sales of telematics box and navigation systems to third-party customers

Powertrain up 3% with a significant contribution from captive sales of components for Dodge Dart

• 357

307

Trading profit in line with Q1 ’12

Top-line increase partly offset by costs associated with new product launches Trading margin at 2%, flat over prior year

April 29, 2013

Q1 „12

Revenues up 1% over prior year (+4% at constant exchange rates)

• Positive performance (at

1,451 1,469

Q1 „12

Revenues down 22%

9

3 Q1 „12 (1)

Q1 „13

Q1 ‟12

(1)

Q1 „13

Restated for amendments to IAS 19

Q1 2013 Results Review

Cast iron business unit down 18% in both Europe and Latin America Volumes for Aluminum business unit up 2%

Trading profit primarily reflecting decrease in volumes for Cast Iron business unit

Revenues down 14%

Decline attributable primarily to Powertrain Systems and Service activities in Latin America

Improvement in trading profit mainly attributable to Body Welding ops Order backlog at €930mn at quarterend, +6% over yearend 2012 23


4

Business environment overview

April 29, 2013

Q1 2013 Results Review

24


4

Business environment overview Jeep Grand Cherokee and Ram HD Pickup launched in Q1 2014 JEEP GRAND CHEROKEE • New 3.0L EcoDiesel V-6 Engine

• •

(U.S. & CANADA)

Best-in-class mileage (30 mpg hwy) Best-in-class towing

+33

(+7%)

First intro by a domestic OEM in segment with 8-speed automatic transmission New exterior

2013 RAM HD PICKUP • Ram 2500: best-in-class towing • Ram 3500: best-in-class maximum trailer weight • Availability of 6.7L Cummins turbo-diesel engine with best-in-class torque

+25

April 29, 2013

First mid-size SUV with 9-speed automatic transmission 2.4L Tiger Shark MultiAir engine delivering ~45% fuel efficiency improvement vs. Jeep Liberty

+12

+11

+5

(+20%)

(+49%)

(+15%)

(10) (-13%)

(17) (-78%)

454

Dodge Dart

Ram Pickup

+7 Other

(new)

2014 JEEP CHEROKEE REVEALED • Production launch at Q2-end • Further expanding volume base for Compact common architecture • Competing in largest SUV segment in NAFTA • Best-in-class capability – Trailhawk model • Competitive powertrain package

• •

Vehicles (000s)

SALES GROWTH

Dodge Dodge Journey Avenger

487

Jeep Chrysler Liberty T&C / Dodge Caravan

+8% SALES

+4%

Q1 ‘12

Q1 2013 Results Review

Q1’ 13

25


Business environment overview Fundamentals of leadership in Brazil

• •

More than 13mn vehicles produced in the course of 37-year presence in Brazil

Fiat as full-line player in Brazil with up-to-date, competitive, award-winning product line-up

  

• •

Strong brand image, perceived as a domestic player being part of Brazilian society Quick response to market needs in product developments Advertising actions (“Big Brother Brazil” currently on-air and merchandising campaign with Ronaldo Fenômeno)

Continuing to keep fresh product offerings with constant cadence of new intros (all-new models, refreshes, special series…)

 

Market leader for 11 years

Complete product offerings with 19 models & 67 versions Expanding towards higher segments thanks to Chrysler Group‟s branded products (Jeep and Dodge in particular)

Best distribution network in the country

More than 600 dealers

Highly productive company, cost competitiveness coupled with high quality

1 vehicle every 20 seconds out of Betim plant

FRESH, TOP-SELLING NAMEPLATES LAUNCHED AT THE HEART OF BRAZILIAN MARKET 2011 NOVO PALIO

2012 NEW PUNTO

April 29, 2013

Production capacity of 200-250k a year available starting late 2014 to expand product offerings in upper layer of certain segments

Q1 2013 Results Review

Full of technology an sportiveness, elected “Best Buy” national Sport

SIENA

Leveraged with Grand Siena, Siena the best-selling sedan in Brazil

NEW PALIO WEEKEND

Premium-priced, offering best-inclass technology in its category

NEW STRADA

49% segment share in Q1 „13

2013 NOVO UNO

New complex in Pernambuco proceeding apace

Strong success since first intro in market (1997), being completely redesigned for a new cycle

Launched in 2010, MY14 introduced in March 2013, adding College version

DODGE DURANGO

Increasing coverage of CUV segment

26


Business environment overview Focus on China operations CHINA SALES GROWTH

JEEP BRAND

IN

CHINA

Vehicles (000s)

2

1

23

1

8 Chrysler 300C

Dodge Journey

Jeep Compass/ Patriot

11

Fiat Viaggio

SALES +109%

• Q1 „12

• •

Q1 „13

Dodge Journey returned to China in February

 

Newly imported 7-seater high-end CUV Featuring class leading space, best-in-class rear seat entertainment system and best-in-class integrated child safety seat

Fiat Viaggio sales continued to gain momentum

Winner of 59 awards since its launch in September 2012, including “2012 Sedan of the Year” by China Mainstream Media Alliance

JV expanding further Fiat dealer network, exiting Q1 with 120 points of sale covering 80+ cities across China

April 29, 2013

Sales in China (~60% of total China sales) up 25% compared to Q1 2012, in one of fastest growing segments in the country Line-up enhanced by Asian premier of all-new Jeep Cherokee at Shanghai Auto Show in April

Featuring best-in-class capability, a segment-first 9-speed automatic transmission, cutting-edge sleek, revolutionary design with world-class craftsmanship

Debuted in Asia along with new 2014 Jeep Grand Cherokee and Jeep Wrangler Rubicon 10th Anniversary special edition

Complete Jeep line-up now to include Jeep Compass, Patriot, Wrangler, Cherokee and Grand Cherokee

Jeep dealer network continued to expand coverage across China, exiting Q1 with 150+ points of sale in ~90 cities

Q1 2013 Results Review

27


4

Business environment overview Successful Fiat branded models, a halo-car for Alfa Romeo 4C

A 2-seat compact supercar for brand global relaunch

Launched in Q4 2012 throughout Europe, good market reception

 

April 29, 2013

#1 in small MPV segment in March

Enlarging model offerings in 2013

Segment share of 17% (43% in Italy)

 

1.6L MultiJet II and RHD in March Trekking in Q2 7-seater in Q3

Global reach to expand, with export for NAFTA distribution starting Q2-end

• •

A-Segment leadership maintained in Q1

The most sold city-car in EU27+EFTA in Q1, again

15% segment share (45% in Italy)

The widest-range car offered in market

 

Panda Trekking & 4x4 represented ~15% of total Panda orders Alternative-fuel (CNG & LPG) powered versions accounted for ~25% of total nameplate orders

Q1 2013 Results Review

• • •

Targeting ~3,500 units per year worldwide (~1,000 in Europe) Very good initial acceptance for “Launch Edition” in EMEA (orders received for twice scheduled production)

Produced in Modena plant Market intro in 2013

 

September in EMEA Late year in U.S., marking brand‟s return to North American market

Extremely powerful model

 

Carbon fiber mono-coque

Sophisticated "Alfa TCT" twin dry clutch transmission

Brand-new 1750 turbo gas all-aluminum engine

Alfa DNA selector with brand-new race mode, launch control and 0-100 km/h in 4.5 secs 28


4

Business environment overview The luxury market “redefined”

• • •

World Premiere at Geneva Motor Show The finest expression of marque’s technical capabilities in both GT and F1 engineering

  

• •

 

Emissions reduced by 50% vs. Enzo

Top speed over 217mph (350+km/h) 0-62mph (0-100km/h) in less than 3 secs

Orders received 2x production run

Priced over €1mn, tax excluded

April 29, 2013

With production volumes inching in Q1, run-rate expected from Q2

Sporty and versatile engines produced in Maranello, tied up with 8speed transmission

Over 960hp equipped with V12 6.3L V12 800hp engine coupled with HY-KERS technology delivering 163hp

A limited edition supercar, just 499 units

Performance, technological innovation, style, driving emotion

Most powerful naturally-aspirated engine ever used on a Ferrari road car

Brand-new flagship sedan, launched Q1 ‘13

• • •

Innovative 3L Twin Turbo V6 (330-410hp), also available in AWD version

Add-on to Maserati line-up, available in market from Q3

A highly efficient yet powerful driving experience

New 3.8L twin turbo V8 530hp, raising brand‟s tradition to new heights

Very good initial market acceptance, particularly NAFTA & Asia, in line with FY target of 8+k units

Unveiled at Shanghai Motor Show High-end E-segment sedan

Innovative 3L V6 Twin Turbo engine (ranging 330-410hp), specifically designed for Maserati and built at Ferrari plant, also available with Q4 “on demand” AWD Brand‟s first-time diesel engine offering (3L 275hp) 8-speed ZF transmission

Targeting 5+k shipments in 2013

Maserati plant started working on 2-shift basis on April 29th to support increasing volumes for New Quattroporte and preparation for start of production of Ghibli Q1 2013 Results Review

29


Business environment overview

4

Market outlook (mn units) NAFTA

14.8

APAC

LATAM

~15.5

5.8 (1)

23.8

~6.1

EMEA

~25.0 EU27+EFTA

~1.3

1.3

1.6 FY '12

1.7

(1)

FY '13E

Expected growth of midsingle digit over prior year with cars estimated to be up ~8%, trucks up ~2%

Canada industry for 2013 projected at 1.7mn vehicles

FY '12

FY '13E

Q1 „13 annualized industry consistent with prior year‟s level

FY '12

FY '13E

LCVs

Restated due to reclassification of SUV into passenger car segment

FY '13E

U.S.: Q1 annualized volumes (15.6mn vehicles) supportive of unchanged Company outlook for FY 2013 for industry

~4.7

Passenger cars

~1.7 (1)

FY '12

4.5

Q1 market trend supportive of unchanged FY industry outlook of mid-single digit growth for the region

GDP growth of low/midsingle digit to drive Brazilian market up ~5%

Argentinian market performing well and in line with FY expectations for growth in line with GDP

~1.5 12.5

~12.0

FY '12

FY '13E

Passenger cars

LCVs ~0.1

0.12 1.4

Industry projected up ~5%

Improvement driven by strong growth in China and Australia offset by contraction in Japan as industry normalizes after strong recovery in 2012

Group targeting to double sales growth (incl. JVs) in 2013

 

Growth driven primarily by Jeep, Fiat, Dodge and Chrysler brands Group targeting significant growth in Fiat, Alfa Romeo and Fiat Professional brands in Australia

Passenger cars FY '12

FY '13E

In light of demand levels during Q1, market outlook for 2013 in EU27+EFTA pointing to a further contraction, albeit moderate, resulting in the 6th consecutive year of decline

~1.4

Market now seen down in the 3-5% range

Italy projected at ~1.3mn units

LCVs

Unchanged FY market outlook for the segment in EU27+EFTA (down ~5% vs. last year‟s levels)

Note: APAC reflects aggregate key markets where Group is competing (i.e. China, India, Australia, Japan, South Korea) April 29, 2013

Q1 2013 Results Review

30


4

Q1 ‟13 shouldered impact of aggressive product launch schedule for Chrysler Group Q1 2013 challenged by ongoing product changeovers in NAFTA

End of production of Jeep Liberty in 2012 to prepare for start of production in Q2 2013 of all-new 2014 Jeep Cherokee at Toledo plant (Ohio)

Ongoing launches of the new 2014 Jeep Grand Cherokee and 2013 Ram Heavy Duty pickup truck

Q1 revenue for Chrysler Group down 6% from €12.5bn a year ago

~50

~30

650+

574

Decline primarily attributable to lower shipments related to new vehicle launches as well as reduced international shipments due to continued economic weakness in Europe and import restrictions in Latin America

Chrysler Group trading profit of €593mn, down 27% vs. Q1 2012 on a like-for-like basis (1)

CHRYSLER GROUP (Q1 TO Q2E 2013 SHIPMENTS BRIDGE)

Decrease attributable to lower shipment volumes and industrial costs associated with key model changeovers, partly offset by favorable net pricing in North America

Key product launches and resulting shipment growth expected to position Chrysler Group for a strong performance in H2

April 29, 2013

Q1 2013

(1)

Grand Cherokee & Ram trucks

Other vehicles

Q2 2013E

Q1 2012: €816mn, restated for adoption of IAS 19 as amended

Q1 2013 Results Review

31


4

Business environment overview Group shipments unit volumes (excl. JVs) (Mass-market brands; units in millions)

(Mass-market brands; units in thousands)

4.2 0.1 1.0

1,019 25 215

519

260 Q1 ‟12

-

1017

APAC +28%

32

LATAM +7%

230

NAFTA -2%

510

EMEA -6%

2.1

1.0

245 Q1 „13

FY „12

4.3-4.5 ~0.2

APAC

~1.0

LATAM

~2.2

NAFTA

~1.0

EMEA

FY „13E

Note: Numbers may not add due to rounding

April 29, 2013

Q1 2013 Results Review

32


5

2013 guidance unchanged

April 29, 2013

Revenues in €88-92bn range

Trading profit in €4.0-€4.5bn range

Net profit in €1.2-€1.5bn range

Net industrial debt of ~€7.0bn

Q1 2013 Results Review

33


2013 Financial calendar

CONSOLIDATED AND

Q2 & H1 RESULTS

PARENT COMPANY FINANCIAL STATEMENTS FOR 2012

February

April

July

Q1 RESULTS

April 29, 2013

October

Q3 RESULTS

Q1 2013 Results Review

34


APPENDIX


Supplemental financial measures Fiat Group 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. Fiat Group management believes these supplemental financial measures provide comparable measures of its financial performance based on normalized operational factors, which then facilitate management‟s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other operational decisions. Fiat Group‟s supplemental financial measures are defined as follows:

Trading Profit (Loss) is computed starting with Net Revenues less operating costs (cost of sales, SG&A, R&D costs, other operating income and expenses)

Earnings Before Interest, Taxes (“EBIT”) is computed starting from Trading profit (loss) and then adding restructuring costs, other income/expenses that are unusual in the ordinary course of business (such as gains and losses on the disposal of investments) and the Result from investments

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is computed starting with 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

April 29, 2013

Q1 2013 Results Review

36


Chrysler Net income reconciliation (from IFRS to US GAAP)

Three Months ended Mar 31, 2013

EURO (mn)

USD (mn)

266

351

(214)

(282)

Pension/OPEB adjustments

105

137

Other

(31)

(40)

(140)

(185)

126

166

Chrysler Net Income – IFRS (1) Reconciling Items: Capitalization of development costs, net of amortization (2)

Chrysler Net Income - US GAAP (1) (2)

April 29, 2013

Including unusual items and restructuring Under IFRS, development costs for vehicle programs are capitalized as intangible assets if the development costs can be measured reliably and the economic feasibility of the product supports the view that the development expenditure will generate future economic benefits. Capitalized development costs include all direct and indirect costs that are directly attributable to the development process. These costs are subsequently amortized to expense on a straight-line basis from the start of production over the estimated production cycle. Under US GAAP, with the exception of certain software development costs, development costs are expensed as incurred in accordance with ASC 730, Research and Development Costs Q1 2013 Results Review

37


Chrysler Net debt reconciliation (from IFRS to US GAAP)

Mar 31, 2013

EURO (mn)

USD (mn)

Chrysler Net Debt - IFRS

1,364

1,746

Unamortized purchase accounting adjustments (1)

(510)

(653)

(401) 30 (371)

(514) 40 (474)

483

619

Classification and other differences: Accrued interest Other

Net Industrial Debt - US GAAP (1)

April 29, 2013

In connection with the transaction, all financial liabilities were re-measured to their fair value as of the date of consolidation. The unamortized balance primarily relates to the fair value adjustment on the VEBA Trust Note

Q1 2013 Results Review

38


Financial charges breakdown Q1 2013

Q1 2012

Avg. Outstanding (€bn)

Rate (%)

P&L (€mn)

Avg. Outstanding (€bn)

Rate (%)

P&L (€mn)

(11.9)

7.0%

(207)

(11.3)

7.2%

(205)

(14.2)

6.6%

(233)

(13.8)

6.9%

(239)

(26.1)

6.7%

(440)

(25.2)

7.0%

(444)

Industrial Cash & Net Intersegment Financial Receivables (2)

19.0

0.9%

44

19.2

1.3%

62

Net Industrial Debt

(7.1)

(396)

(5.9)

Capital Market Other Financial Debt

(1)

Gross Industrial Debt

(3)

IAS 19

(382)

(92)

(91)

Equity Swap

15

38

Others

30

3

(443)

(432)

(interest cost on pension & OPEB)

(4)

Net Financial Charges Note (1) (2) (3) (4)

Include sale of receivables, committed lines fees, Hedges Net of charges on financial intersegment sales of receivables and floor plan fees Excluding derivatives fair values Include FX gain/losses, interest cost capitalized (IAS23), bank fees and other financial charges

April 29, 2013

Q1 2013 Results Review

39


Detailed cash flow Fiat Group

Fiat ex Chrysler

(â‚Źmn) Q1 2013 Adj. Net Industrial (Debt)/Cash beginning of period

(1)

Q1 2013

Q1 2012

(1)

(6,545)

(5,529)

(5,048)

(2,449)

31

262

(235)

(276)

D&A

1,051

1,034

557

538

Change in Funds & Others

(125)

108

(116)

(161)

957

1,404

206

101

135

(236)

(167)

(1,068)

1,092

1,168

39

(967)

(1,568)

(1,581)

(653)

(618)

(476)

(413)

(614)

(1,585)

(26)

151

(74)

188

(502)

(262)

(688)

(1,397)

(1)

1

(1)

1

(57)

18

(4)

(1)

(560)

(243)

(693)

(1,397)

(7,105)

(5,772)

(5,741)

(3,846)

Net Income

Cash Flow from Op. Activities bef. Chg. in W.C. Change in Working Capital Cash Flow from Operating Activities Tangible & Intangible Capex Cash Flow from Operating Activities net of Capex

Change in Investments, Scope & Others Net Industrial Cash Flow Capital Increase / Share Repurchases / Dividends FX Translation Effect Change in Net Industrial Debt Net Industrial (Debt)/Cash end of period (1)

Q1 2012

Restated for adoption of IAS 19 as amended

Note: Numbers may not add due to rounding April 29, 2013

Q1 2013 Results Review

40


Fiat ex Chrysler Net debt breakdown (€bn)

Dec. 31, ‘12

*

Mar. 31, ‘13

Cons.

Ind.

Fin.

Cons.

Ind.

Fin.

17.5

14.1

3.4

Gross Debt*

18.3

14.7

3.6

(0.3)

(0.3)

-

Derivatives M-to-M, Net

(0.2)

(0.2)

-

(9.1)

(8.8)

(0.3)

Cash & Mktable Securities

(9.1)

(8.8)

(0.3)

8.1

5.0

3.1

Net Debt

9.0

5.7

3.3

Net of intersegment receivables

Note: Numbers may not add due to rounding April 29, 2013

Q1 2013 Results Review

41


Fiat ex Chrysler Gross debt (€bn) Outstanding Dec. 31, ‟12

Outstanding Mar. 31, ‟13

16.6 5.5 9.9 1.2

Cash Maturities Bank Debt Capital Market Other Debt

17.5 5.9 10.2 1.3

0.4

Asset-backed financing

0.5

0.0 0.0 0.4

ABS / Securitization Warehouse Facilities Sale of Receivables

0.0 0.0 0.5

0.4

Accruals & Other Adjustments

0.4

17.5

Gross Debt

18.3

(9.1)

Cash & Mktable Securities

(9.1)

(0.3)

Derivatives (Assets)/Liabilities

(0.2)

8.1

Net Debt

9.0

2.0

Undrawn committed credit lines

2.0

Note: Numbers may not add due to rounding April 29, 2013

Q1 2013 Results Review

42


Chrysler Gross debt (€bn) Outstanding Dec. 31, ‟12

Outstanding Mar. 31, ‟13

10.1 2.7 2.4 5.0

Cash Maturities Bank Debt Capital Market Other Debt

10.3 2.8 2.5 5.0

0.0

Asset-backed financing

0.0

0.0

ABS / Securitization

0.0

0.2

Accruals & Other Adjustments

0.4

10.3

Gross Debt

10.7

(8.8)

Cash & Mktable Securities

(9.3)

(0.0)

Derivatives (Assets)/Liabilities

(0.0)

1.5

Net Debt

1.4

1.0

Undrawn committed credit lines

1.0

Note: Numbers may not add due to rounding April 29, 2013

Q1 2013 Results Review

43


Debt maturity schedule (€bn)

Outstanding Mar. 31, ‘13 5.9 10.2 1.3 17.5 9.1 2.0 11.0

Fiat ex Chrysler

9M 2013

2014

2015

2016

2017

Beyond

Bank Debt

2.3

1.3

1.2

0.5

0.3

0.3

Capital Market

0.1

2.2

1.9

2.3

1.9

1.9

Other Debt

0.9

0.1

0.0

0.0

0.0

0.3

3.4

3.6

3.1

2.8

2.1

2.5

Total Cash Maturities Cash & Mktable Securities Undrawn committed credit lines Total Available Liquidity

3.7

Sale of Receivables (IFRS de-recognition compliant)

2.1

of which receivables sold to financial services JVs (FGA Capital)

Outstanding Mar. 31, ‘13

Chrysler

9M 2013

2014

2015

2016

2017

Beyond

2.8

Bank Debt

0.0

0.0

0.0

0.0

2.3

0.3

2.5

Capital Market

0.0

0.0

0.0

0.0

0.0

2.5

5.0

Other Debt

0.2

0.3

0.3

0.4

0.4

3.4

0.3

0.4

0.4

0.4

2.7

6.2

10.3

Total Cash Maturities

9.3 1.0 10.3

Cash & Mktable Securities Undrawn committed credit lines Total Available Liquidity

Note: Numbers may not add due to rounding; total cash maturities excluding accruals April 29, 2013

Q1 2013 Results Review

44


Contacts

GROUP INVESTOR RELATIONS TEAM

Marco Auriemma

 +39-011-006-3290

Timothy Krause

 +1-248-512-2923

Paolo Mosole

 +39-011-006-1064

Sara Nicola

 +39-011-006-2572

Maristella Borotto

 +39-011-006-2709

Vice President

fax: +39-011-006-3796

April 29, 2013

email:

investor.relations@fiatspa.com

websites:

www.fiatspa.com www.chryslergroupllc.com

Q1 2013 Results Review

45


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