At a news conference yesterday, following the special Fiat Group stockholders' meeting, a buoyant senior management reiterated that the Turinese firm was firmly on a bright path to the future. "The recent growth reflects a structural change at the company, it's not just a rebound," Fiat Group Chairman Luca di Montezemolo told the assembled reporters, stating that the growing debt and ageing model range that was stifling Fiat when the re-launch was initiated had both now been fully resolved. "In the next years, we are committed to consolidating the recovery and transforming Fiat into a big international group," added Montezemolo.

Meanwhile, Fiat Group and Automobiles CEO Sergio Marchionne, was in equally upbeat mood. He said the targeted 2.5-2.7 billion euro operating profit for the group is within reach. "I am rather relaxed on the objectives for this year," he said, pointing to the strong sales growth that Fiat Automobiles has already achieved in both its key domestic market and across Europe this year, saying that "a very good start on market share" had been achieved; which  can be added to the improvements at agricultural division CNH, which has new products at a time of rising produce prices, and at the trucks-to-buses unit Iveco, which he said had a good forward order book. The niche Maserati sportscar arm will also return to profit this year.

"Fiat continues to increase its profit, with manufacturing efficiencies more than offsetting higher raw material costs. This will continue in 2007," said Marchionne. Production worldwide by Fiat Group Automobiles by 2010 will rise to 2.2 million units, he added, as well as swiftly dismissing recent rumours that Fiat Group Automobiles could be floated off. He also said there were no plans for a Ferrari IPO. Fiat will become a 'protagonist' in the important C-segment market through the new Bravo model, continued Marchionne, who added that he had high hopes for the new 500 model which will combine all the iconic charm of its predecessor with new technology, while at the same time restating the production target of 120,000 units per year.

Group targeted debt levels will be revised this year with net industrial debt expected to fall to zero by the end of next year. The planned 750 million euro bond, shelved at the last minute earlier this year, will go ahead at an 'opportune' time, said the Fiat CEO, who stated that there was no urgency as available cash resources within the group were now very favourable. "The market continues to be nervous. When it is favourable, the aim is to pay less interest. We will wait for the right moment," he added. Current bonds will be repaid within their scheduled timescales.

The stockholders also approved a 1.4 billion euro share buyback scheme and gave the go-ahead to a 0.155 euro per share dividend, the first payment to be made for five years. Earnings per share (EPS) will rise to 2.66 euros per share by 2010, from 0.789 in 2006, said Marchionne, while the dividend will rise to 0.59 euros per share from the 0.155 that was announced yesterday. These figures are already stated projected targets, he added, and might change depending on net profits, but will stay within the outlined policy of paying out 25 percent of net profit in the form of a dividend.

Montezemolo said that Fiat will continue to seek targeted alliances with other carmakers and exchanges of experience. Marchionne also discussed his concerns with Nanjing Fiat, the Chinese 50-50 joint venture between Fiat and Nanjing Auto.
 

The Fiat CEO said he had "expressed our doubts" to Nanjing Auto after the firm launched production of two new sportscars last month under the MG brand name which it recently acquired from the liquidators of the now-defunct British MG Rover car company. Nanjing Fiat has seen its production rising last year after a difficult period, and it launched a well-received new model - the Fiat Perla - during last summer. Marchionne added yesterday that he hoped that agreement could still be reached with Nanjing Auto.

The Fiat Group issued a detailed statement yesterday in Turin after the meeting: "The Fiat S.p.A. Stockholders Meeting, which met today for the ordinary and extraordinary session," it read, continuing: "approved the 2006 Annual Report and the distribution to stockholders of a gross dividend of 0.155 euros per ordinary share, 0.31 euros per preference share and 0.93 euros per savings share (of which 0.31 euros pertaining to 2006 and 0.62 euros pertaining to the two preceding years, as required by the By-laws), which will be paid starting May 24, 2007, ex-dividend date May 21, 2007.

"The Stockholders Meeting also authorised the purchase and disposition of own shares," the statement continued, "also through the Group subsidiaries, of all three classes of stock for an amount which may not exceed 10% of the Company’s capital and an aggregate maximum amount of 1.4 billion euros. This authorisation will allow the necessary servicing of the stock option plans and will provide the Company with a strategic investment opportunity. Purchases of own shares will have to be made within the next eighteen months in accordance with the terms and procedures allowed by applicable law and regulations and the prices will be directly related to the reference price reported on the Stock Exchange on the preceding day, plus or minus 10%.

"The Stockholders Meeting then approved the incentive plan based on stock options – which had been resolved by the Board of Directors on November 3, 2006 and already disclosed to the market –, with a maximum of 20 million underlying Fiat ordinary shares (50% representing newly issued shares and 50% outstanding shares) offered at a strike price of 13.37 euros, equal to the arithmetical average of the official prices posted on the Borsa Italiana S.p.A.’s market in the thirty days preceding November 3, 2006.

"Finally, in its extraordinary session, the Stockholders Meeting approved certain amendments to the By-laws related to the Law on Investors Protection as modified by Legislative Decree no. 303 of December 29, 2006. In particular, provisions related to the vote list system for the election of directors were introduced, and the minimum equity interest required for submission of a list of candidates was determined in an amount equal to the equity interest applicable to the Company according to the new regulations, which may not, in any case, exceed 1% of the ordinary shares." the statement concluded.