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Fiat group
posts 11th consecutive quarterly year-over-year
improvement in operating performance (IFRS based), with
trading profit of 745 million nearly 75% higher than
2006 and net income of 454 million up 127%, on the back
of strong revenue growth (17.4% higher than 2006). All
sectors contributed to this improvement and all major
sectors posted top line growth in excess of 15%. Net
industrial debt up 0.5 billion to 1.4 billion, driven
mainly by seasonality. 2007 full year guidance moved up,
with trading profit now expected to range between 2.9
and 3 billion, net income between 1.8 and 1.9 billion
and net industrial debt at around 0.5 billion.
The Board of
Directors of Fiat S.p.A. met today in Maranell (Italy)
under the chairmanship of Luca Cordero di Montezemolo to
approve the consolidated results of the Group for the
third quarter and the first nine months of 2007.
Group
revenues rose 17.4% to 13.9 billion driven by:
Fiat Group Automobiles +17.6% at 6.5 billion on
higher sales volumes, up 18% to 542,600 units worldwide
(305,000 units, up 9.3%, in Western Europe), boosted by
the success of new cars and commercial vehicles models
and continued strength in the Brazilian market;
CNH +22% to 2.8 billion (+31% in US dollar terms)
driven by higher volume and better mix across all the
brands;
Iveco +23.2% at 2.6 billion (48,600 units delivered
worldwide, up 20.6%) with sharp improvements in all key
European countries as well as strong performances in
Eastern Europe (+25%) and Latin America (+34%).
Trading
profit rose to 745 million (+74.5%), the highest
recorded Q3 level, with all Sectors showing gains:
Fiat Group Automobiles more than tripled to 185
million (2.8% of revenues), driven by volumes and a
favourable product mix;
CNH trading profit grew 88 million to 225 million
(8.0% of sales), driven by favourable volume and mix;
Iveco improved by 34 million to 190 million, (7.4%
of revenues) thanks to higher volume and better pricing
on competitive repositioning of the product offering;
Components & Production Systems drove trading profit
up 45.8% to 121 million mainly on higher volumes and
efficiency gains at FPT.
Net
industrial debt rose by 552 million from the Q2 level
to 1,425 million, largely due to seasonal working
capital build; liquidity remained strong at 5.3
billion. Fiat Group signed five new targeted cooperation
agreements since July 2007.
Group results in the third quarter
Fiat Group had revenues of 13.9 billion in Q3 2007, up
17.4% from the same period of 2006, driven by
significant growth across all major industrial
businesses. With revenues of 7 billion, the Automobiles
businesses posted a 17.3% increase over Q3 2006. All
brand groupings contributed to this positive
performance: Fiat Group Automobiles had revenues of 6.5
billion, up 17.6% from Q3 2006 on higher volumes.
Revenues increased by 10.8% at Ferrari and by 33% at
Maserati. Agricultural and Construction Equipment
businesses (CNH) had revenues of 2.8 billion in Q3
2007, up 22% from the same period of 2006. In US dollar
terms, revenues rose by 31%, due to significantly higher
volumes and better mix across all the brands. Iveco had
revenues of 2.6 billion, a 23.2% growth over the same
period of 2006, due to higher sales volumes and improved
pricing. Revenues in the Components and Production
Systems businesses totalled 3.1 billion, a 14.5%
increase over Q3 2006. Sales increased 21.1% at FPT
Powertrain Technologies and 20.8% at Magneti Marelli.
Teksid revenues decreased by 26.5% in absolute terms,
due to the disposal of Meridian Technologies in Q1 2007,
but are stable on a like-for-like basis. Comau reported
a decrease in revenues of 11.1% in line with the
resizing efforts devoted to this business.
In Q3 2007
Group trading profit totalled 745 million, up 318
million (+74.5%) from Q3 2006. Trading margins rose to
5.4%. from 3.6%. With a trading profit of 247 million,
the Automobiles businesses reported an aggregate
increase of 164 million (134 million of which
attributable to Fiat Group Automobiles, whose trading
profit totalled 185 million, or 2.8% of revenues). The
Agricultural and Construction Equipment businesses (CNH)
trading profit rose by 88 million (up 64.2% in reported
terms and up 76.7% in US dollar terms) to 225 million,
or 8.0% of revenues (5.9% in Q3 2006). Iveco had a
trading profit of 190 million, an increase of 34
million (+21.8%), yielding a trading margin of 7.4%,
flat on 2006. Positive performances were also recorded
by the Components and Production Systems businesses,
with an aggregate increase of 38 million due to
improved results at FPT Powertrain Technologies and
Comau, which confirmed its return to profitability.
Magneti Marelli continued its positive performance, and
Teksid improved its trading profit on a comparable scope
of consolidation. Operating income totalled 745 million
in Q3 2007 (+ 318 million over Q3 2006), in line with
the trading profit performance. Gains of 128 million
realized on the disposal of investments (118 million of
which from the sale of the interest held in Mediobanca)
were offset by restructuring costs (mainly at CNH) and
other one-off expenses incurred mainly in connection
with the rationalization of some strategic suppliers.
Net
financial expenses totalled 163 million and include a
negative impact of 19 million arising from the
mark-to-market of stock option-related equity swaps. Q3
2006 (120 million) had benefited from a gain of 24
million on the same equity swap. Income taxes amounted
to 168 million with the Group tax rate at 27%, in line
with the Groups expected tax rate for the year. Net
income before minority interest was 454 million, 254
million higher than the 200 million recorded in Q3
2006. The Group net industrial cash flow (change in net
industrial debt, excluding capital increases, dividends,
and the impact of foreign currency translation) resulted
in an absorption of 0.4 billion, mainly as a result of
a seasonal working capital absorption (in line with Q3
2006) and high capital expenditure, only partly offset
by 0.2 billion cash-in related to the disposal of
Mediobanca stake. In the quarter, share repurchases
totalled 170 million. At September 30, 2007 the Groups
net industrial debt was 1.4 billion and its cash
position was 5.3 billion.
Group results in the first nine months
In the first nine months of 2007 the Fiat Group had
revenues of 42.7 billion, up 12.5% from the same period
of 2006, with all industrial businesses contributing to
this improvement. Iveco posted the highest rate of
improvement, with revenues up 22.9%. CNH revenues
increased by 10.1% in reported terms, but the increase
amounted to 18.9% in US dollar terms. Revenues rose
13.5% in the Automobiles businesses and 7.3% in the
Components and Production Systems businesses. The Group
had a trading profit of 2,286 million, up 877 million
(+62.2%) from the first nine months of 2006,
representing a trading margin of 5.4%, up from 3.7% in
the first nine months of 2006. The improvement is
attributable to the Automobile businesses and Fiat Group
Automobiles in particular, whose trading profit grew by
374 million to 570 million, generating a trading
margin of 2.9% (1.1% in the first nine months of 2006).
A significant contribution was also made by Iveco, with
a trading profit improvement of 45% to 564 million,
yielding a trading margin of 7.1% (6.0% in the same
period of 2006) and CNH, whose trading profit increased
by 39.3% to 762 million for a trading margin of 8.7%
(6.9% in the first nine months of 2006). The Components
and Production Systems businesses had an aggregate
trading profit of 350 million (up 80 million, or
29.6%), mainly due to improved results at FPT Powertrain
Technologies.
Operating
income totalled 2,286 million in the first nine months
of 2007. The 877 million increase from the same period
of 2006 (1,409 million) reflects improved trading
profit, with unusual items netting out to nil. In the
January-September 2007 period net financial expenses
totalled 331 million, versus 418 million in the
corresponding period of 2006. The 87 million decrease
mainly reflects lower net industrial debt of the Group
as well as an increase of 85 million in gains from two
stock option-related equity swaps, partly offset by the
43 million cost related to the early redemption of CNH
senior notes due in 2011. Income before taxes totalled
2,071 million in the first nine months of 2007, as
compared to 1,101 million in the same period last year.
The 970 million improvement is due to the increase of
877 million in operating income, lower net financial
expenses of 87 million and an increase of 6 million in
investment income. Income taxes totalled 614 million,
with a 29.6% tax rate, at the upper end of the Groups
expected tax rate for the year.
In the first
nine months of 2007, net income before minority interest
was 1,457 million, compared with 681 million in the
same period of 2006. Net industrial debt decreased from
1.8 billion at year end to 1.4 billion at September
30, 2007 reflecting the improved operating performance,
notwithstanding dividends of 0.3 billion, share
repurchase for 0.4 billion and 2.1 billion in capital
expenditure.
Automobiles
Third quarter
The Automobiles businesses posted revenues of 7.0
billion in Q3 2007, up 17.3% from Q3 2006, due to a
sharp increase in sales volumes. In particular, Fiat
Group Automobiles had revenues of 6.5 billion, up 17.6%
from the same period of last year. Fiat Group
Automobiles delivered a total of 542,600 units, up 18%
from Q3 2006. Approximately 304,800 units were delivered
in Western Europe, an increase of 9.3%. Due to the
success of the Punto, Panda, Bravo, Fiat 500 and light
commercial vehicles (Ducato and Scudo), deliveries
increased in all main countries: Germany (+22.1%, a good
turnaround in a market that remains sluggish), Italy
+8.7%, Great Britain +5.1%, Spain +3.4%, France +2.7%.
With respect to Q3 2006, volumes increased by 33.7% in
Brazil and by 34.1% in Poland.
In Q3 2007,
the Western European automobile market rose by 1.6% from
Q3 2006. Increases were reported in Italy (+6.0%),
France (+8.2%) and Great Britain (+2.0%), while Germany
(-5.6%) and Spain (-2.9%) continued to perform poorly.
Demand for automobiles rose 28.6% in Brazil and 22.1% in
Poland. Fiat Group Automobiles share of the automobile
market reached 30.9% in Italy (+0.2 percentage points
with respect to Q3 2006) and 7.4% in Western Europe
(+0.4 percentage points). In the key markets outside of
Western Europe, penetration improved in Brazil (share of
26.6%, +0.4 percentage point), where Fiat is the market
leader; market share in Poland stood at 10.2% (+0.3
percentage point).
A total of 88,400 light commercial vehicles were
delivered to the dealer network in Q3 2007, an increase
of 26.2% from Q3 2006. 50,700 units were delivered in
Western Europe for an increase of 16.8%; overall demand
increased by 12.4%. Fiat Professional (LCV) market share
stood at 11.8% in Western Europe, an improvement of 1.1
percentage points. In Italy, market share decreased by 2
percentage points to 43.4%, due to significant fleet
contracts signed in 2006 which come up for renewal every
four years. In Q3 2007 Fiat Group Automobiles had a
trading profit of 185 million, up 134 million from Q3
2006. The increase is mainly attributable to higher
volumes, a more favourable product mix following the
introduction of new models, increased absorption of
fixed production costs, net of higher marketing costs
for the launch of new models and increased spending in
network development costs.
The
highlight of the quarter was the launch of the new Fiat
500, an event that generated significant international
interest and was held in Turin 50 years to the day after
the introduction of its predecessor. Fiat 500, the first
car in the world under 3.6 meter which was awarded a
five star Euro NCAP safety rating in September, has
received over 90,000 orders to date. The market launch
of the Fiat Bravo equipped with the all-new 150
horsepower 1.4 T-Jet turbocharged engine occurred in
July. Lancia unveiled the New Musa at the International
Venice Film Festival. Sales of this car, heir to a model
that ranked as the best selling MPV in Italy in 2006 and
2007, began in October. Various other new products were
presented by all Group brands at the Frankfurt Motor
Show, including some of the most innovative cars in
terms of environment protection such as the Panda Aria
concept car and the Panda Panda Climbing, on sale from
October. The Grande Punto Abarth was also officially
presented in Frankfurt: this is Fiat Group Automobiles
first step in the relaunch of the legendary Scorpion
brand, which has become Fiat Group Automobiles fifth
brand. Abarth, scheduled to launch two models within
2008, is managed as an independent company and the
distribution of its products is entrusted to an
exclusive commercial organization. Fiat Professional,
the light commercial vehicles brand, presented the New
Fiorino: its Cargo version will be marketed starting
from the end of 2007, while its passenger transport
versions are due to hit the market in 2008.
First nine months
The Automobiles businesses closed the first nine months
of 2007 with revenues of 21.2 billion, an increase of
13.5% from the same period of 2006. Fiat Group
Automobiles posted revenues of 19.6 billion, up 13.2%
due to a sharp increase in volumes resulting from the
success of new models and the outstanding performance of
Brazilian operations. During the period, Fiat Group
Automobiles delivered a total of 1,662,400 units
(+13.8%), approximately 1,021,000 of which in Western
Europe, where volumes increased by 6.4% as a result of
the good performance of all models. Punto continues to
be one of the bestselling models in Europe, Panda
retained its leadership position in the A segment. These
positive performances were flanked by the contribution
of the Bravo in the C segment, above the expectations,
and of the Fiat 500. Fiat Group Automobiles recorded
improvements in all key European markets: Spain +17%,
France +7.8%, Great Britain +6.9%, Italy +6.4%, Germany
+1.1%. Strong increases in deliveries were also recorded
in Brazil (+31.8%) and Poland (+23.7%).
These
results were achieved in a Western European market that
remained substantially flat in the first nine months of
2007: the market grew in Italy (+6.6%), partly as a
result of government incentives for car park renewal,
and Great Britain (+2%), while it decreased in Germany
(-8%) and Spain (-2%). Market performance was positive
in Poland (+24.2%) and Brazil (+26.8%). Fiat Group
Automobiles achieved a 31.4% market share in Italy (+0.7
percentage point compared to the first nine months of
2006). This positive trend was also confirmed in Western
Europe, where market share stood at 8.1% (+0.5
percentage points), thereby enabling Fiat Group
Automobiles to reach the fifth position in the ranking
of manufacturers operating in Western Europe. In Brazil,
Fiats market share increased 0.8 percentage point to
25.9%, confirming the Group as market leader, while in
Poland it stood at 10.3% (-0.1 percentage points).
A total of
284,600 light commercial vehicles were delivered in the
first nine months of 2007, up 23.2% from the same period
of last year. In Western Europe, where demand rose by
7.3%, deliveries increased 15.7% to 176,100 units. Fiat
Professional (LCV) market share stood at 42.8% (-2.5
percentage point) in Italy and 11.7% (+0.6 percentage
point) in Western Europe. In 2006, deliveries in Italy
had benefited from significant fleet contracts that come
up for renewal every four years.
Fiat Group
Automobiles had a trading profit of 570 million, an
increase of 374 million from the first nine months of
2006, mainly driven by higher volumes and cost
efficiencies. Maserati had revenues of 141 million in
Q3 2007, up 33% from Q3 2006. The significant
improvement is largely attributable to the outstanding
performance of the new automatic version of the
Quattroporte and of the new Maserati GranTurismo, which
was presented at the Geneva Motor Show in March 2007 and
launched in July. Maserati delivered a total of 1,467
units, up 25.8% from Q3 2006. At the end of September,
the order backlog amounted to 2,606 units, of which
2,155 for the GranTurismo.
In Q3 2007
Maserati had a trading profit of 6 million, a sharp
improvement from the trading loss of 6 million reported
in Q3 2006. This result confirms the turnaround in
performance reported in Q2 and attributable to higher
volume and ongoing cost containment initiatives. The new
Quattroporte Sport GTS was presented in September at the
Frankfurt Motor Show. This new version developed to
further increase the dynamic and sporting features of
the model was particularly well received. In the first
nine months Maserati had revenues of 485 million, up
29.3% from the same period of 2006. Deliveries to the
sales network (5,171 units) increased by 23%. Sales of
the Quattroporte model grew significantly, posting a 66%
increase. In the January-September 2007 period, Maserati
had a trading profit of 6 million, a sharp improvement
from the 32 million trading loss recorded in the same
period last year.
Ferrari had
revenues of 368 million in Q3 2007. The 10.8% increase
from Q3 2006 is attributable to sales of the 599 GTB
Fiorano model and the F430 model, the Spider version in
particular. In the period, a total of 1,428 units were
delivered to the sales network (+8.8%); sales to end
customers were 1,535 units (+12%). Ferrari closed Q3
2007 with a trading profit of 56 million, up 47.4% from
Q3 2006. This positive performance is mainly
attributable to higher sales volumes and cost
efficiencies. The F430 Scuderia, a special series model
derived from the F430, was presented at the Frankfurt
Motor Show. This high-performance two-seater berlinetta
demonstrates how Ferrari's Formula 1 know-how is carried
across to its car production and is aimed specifically
at Ferrari's most passionate and sports-driving oriented
clients. In the first nine months of 2007 Ferrari had
revenues of 1,172 million, an increase of 12.9% from
the same period of last year. Deliveries to dealers
totalled 4,675 units (+15.1%); sales to end customers
were 4,899 units (+13%). Ferrari had a trading profit of
157 million, an improvement of 53.9% over the first
nine months of 2006. Ferrari just closed its Formula 1
season, winning both the constructors series and the
drivers championship for the 15th time.
Agricultural and Construction Equipment
Third
quarter
CNH Case
New Holland revenues in Q3 2007 amounted to 2.8
billion, an increase of 22%, which is all the more
significant as it was impacted by the weakness of the US
dollar which negatively influenced performance in
reported terms. In US dollar terms, revenues increased
by 31%. The improvement was driven by higher volume and
a better mix across all the brands. The global market
for agricultural equipment increased by approximately 3%
over Q3 2006. Demand increased by 1% in North America
for total tractors and combine harvesters. In Latin
America, the market increased significantly, in both
combine harvesters and tractors. In Western Europe, the
market increased for tractors while for combines was
unchanged. In the Rest of the World, the market was down
for tractor and combines. In this context, all of the
CNH brands achieved year-over-year market share gains.
Worldwide
CNH agricultural equipment deliveries to the dealer
network and retail unit volumes showed particular
strength in higher horsepower tractors and combines,
with increased agricultural industry demand throughout
the Americas and Western Europe. The global construction
equipment market grew by 12% with respect to Q3 2006.
Demand for both heavy and light equipment grew
significantly in all main geographic regions except
North America, where it declined by 10%. Worldwide
construction equipment CNH deliveries to the network and
retail unit sales were up, with sales outside of North
America showing continued strength, more than
compensating for weaker industry unit sales in North
America.
CNH closed
Q3 2007 with a trading profit of 225 million, an
increase of 88 million with respect to the 137 million
of Q3 2006 (+64.2%, +76.7% in U.S. dollar terms).
Trading margin went up from 5.9% to 8.0%. The increase
in volume, a more favourable mix and benefits deriving
from improved product quality were the primary
contributors to the improvement.
In the period, CNHs major product launches included:
New Holland Agricultural Equipment launched the T9000
series 4-wheel-drive tractors, the T8000 series row crop
tractors, the BR7000 series round balers and introduced
TOP SERVICE, an industry-leading customer support
program, to the U.S. market, expanding the program
implemented in western Canada and Europe earlier in the
year.
New Holland Construction Equipment introduced new
models of telehandlers, excavators and wheel loaders
with improved durability and reliability.
Case IH Agricultural Equipment began shipping its
Module Express TM 625 cotton picker/packager and
expanded its SERVICE MAX program from Europe to
include more North American customers.
Case Construction Equipment launched the 621E wheel
loader featuring greater horsepower with increased fuel
efficiency and better operator environment.
First nine months
In the first nine months of 2007, CNH had revenues of
8.8 billion. The 10.1% year-over-year increase was
impacted by the unfavourable translation effect of the
dollar/euro exchange rate; in U.S. dollar terms,
revenues increased by 18.9%. The improvement is due to
an increase in sales of higher horsepower tractors,
combines and construction equipment outside of North
America, as well as better mix and new products. CNH
closed the first nine months of 2007 with a trading
profit of 762 million (trading margin increased from
6.9% to 8.7%), up 215 million from the 547 million of
the first nine months of 2006. The increase in volume, a
more favourable mix, improved pricing and reduced
warranty costs driven by various quality improvement
initiatives were the primary contributors to the growth.
Trucks and commercial vehicles
Third quarter
In Q3 2007 Iveco had revenues of 2.6 billion (+23.2%)
as a result of higher sales volumes in both Western and
Eastern Europe and improved pricing. In Q3 2007 Iveco
delivered a total of 48,600 vehicles (including 3,200
with buy-back commitments), up 20.6% from Q3 2006. A
total of 32,400 units (+8.4%) were delivered
in Western Europe, with sharp improvements in key
European countries, especially for light and heavy
vehicles. Increases were reported in Italy (+25.3%),
Germany (+16.1%), France (+4.2%) and Great Britain
(+2.5%). In the rest of the world, deliveries increased
in Eastern Europe (+25%) and Latin America (+34%).
Western European demand for commercial vehicles (curb
weight ≥ 2.8 tons) recorded an overall increase of 17%
from Q3 2006, driven by growth in the light vehicle
segment (+25.2%). Fluctuations in demand for heavy
vehicles (+2.6%) and medium vehicles (-6.7%) were
negatively influenced by the high number of
registrations recorded in Q3 2006 (particularly in
September 2006) prior to the introduction of the new
emission regulations applicable to these vehicles.
Ivecos
share of the Western European market (10.5%) declined
slightly from Q3 2006 (-0.4 percentage point), due to a
drop in the light vehicle segment (-0.7 percentage
point), while both medium and heavy segments posted
increases of 2.0 and 1.2 percentage points,
respectively. Remarkable sales performances were
recorded by the new Daily and Stralis ranges, in light
and heavy vehicles. The success of the latter had a
positive impact on the Sectors share of the heavy
vehicle market in both Western and Eastern Europe and is
confirmed by the 23,000 orders received at the end of
September, six months after its launch. Iveco had a
trading profit of 190 million (7.4% of revenues), up
34 million from the 156 million in Q3 2006. The
increase is mainly attributable to the strong growth in
sales volumes and better pricing from the improvement in
the competitive repositioning of its products,
especially heavy vehicles, partially offset by higher
expenses for international dealer network development
and support to the projects in Asia and Latin America.
During the quarter, Iveco presented the new CNG
(compressed natural gas) powered Stralis. The new range
is equipped with CNG Cursor 8 engines, whose emission
levels are significantly lower than those required under
EU standards. At the beginning of October, the new Daily
4x4 made its debut. Two more accomplishments of note:
the All Blacks sponsorship was recognized as one of the
most effective sponsorship communication campaigns at
the fourth edition of the Press & Outdoor Key Award, and
the Iveco Stralis received an award for the most
comfortable cabin in its category.
First
nine months
In the
January-September 2007 period, Iveco had revenues of
7.9 billion, up 22.9% from the same period of 2006. A
total of 153,100 vehicles were delivered in the first
nine months of the year (including 10,100 with buy-back
commitments), an increase of 18% from the same period of
2006. In Western Europe, deliveries totalled 109,000
units (+10.3%) for a market share of 10.4%. The slight
decline with respect to the first nine months of 2006
(-0.3 percentage point) is due to a decrease in the
light vehicle segment (-0.3 percentage point), while
positive results were recorded in the medium and heavy
segments (+1.1 and +0.6 percentage points,
respectively). Iveco had a trading profit of 564
million (7.1% of revenues), an increase of 175 million
(+45%) compared to the first nine months of 2006 (389
million or 6.0% of revenues).
Components and Production Systems
FPT Powertrain Technologies had revenues of over 1.6
billion in Q3, up 21.1% from Q3 2006, reflecting an
increase in the sales of engines and transmissions for
both passenger vehicle (Passenger & Commercial Vehicles)
and industrial vehicles and applications (Industrial &
Marine). Sales to third parties accounted for 22% of
revenues (23% in Q3 2006). Revenues of the Passenger &
Commercial Vehicles product line totalled 904 million
(+18.9%), with 81% earmarked for Group customers, and
the remaining 19% mainly representing sales of diesel
engines to third parties. In Q3 2007, a total of 614,400
engines (+18.5%) and 497,000 transmissions (+27.7%) were
sold. Revenues of the Industrial & Marine product line
totalled 719 million, an increase of 23.8%. The Fiat
Group accounted for 73% of total sales (76% in Q3 2006).
In Q3 2007, deliveries of engines (112,800 units)
increased by 17.6%, and sales of transmissions (27,100
units) by 14.7%. A total of 66,500 axles were sold, for
an increase of 15.5% over Q3 2006.
In Q3 2007,
FPT Powertrain Technologies had a trading profit of 63
million, nearly double the 32 million recorded in Q3
2006. Higher activity volumes and efficiencies in
purchasing and manufacturing costs more than offset
higher R&D costs in the Industrial & Marine product
line, as well as higher SG&A costs related to
international business development. In September, FPT
Powertrain Technologies began production of the F5C
engine, a new powertrain targeting industrial and
agricultural applications.
In the first nine months of 2007, FPT Powertrain
Technologies had revenues of 5.2 billion (2.9 billion
from the P&CV product line and 2.3 billion from the I&M
product line), up 14.7% from the corresponding period in
2006. Sales to third parties accounted for 24% of
revenues. In the first nine months, Passenger &
Commercial Vehicles sold 1,924,400 engines (+11.2%) and
1,540,700 transmissions (+22.5%). The Industrial &
Marine product line delivered a total of 372,500
engines, up 12.7% from the corresponding period in 2006.
FPT had a trading profit of 184 million, a
year-over-year improvement of 66 million (+55.9%).
In Q3 2007
Magneti Marelli had revenues of 1.2 billion, up 20.8%
from Q3 2006. Excluding the impact of the consolidation
of Aftermarket operations, revenues grew 17.3%. This
improvement is attributable to higher sales to Fiat
Group Automobiles, as well as a sharp increase in sales
to third parties in Europe, Brazil and in the Nafta
area. These revenues yielded a trading profit of 44
million in Q3 2007, unchanged from Q3 2006. Higher sales
volumes and efficiency gains compensated price
pressures, increased raw material prices and new product
start-up costs. Q3 2007 saw the launch of new products
in various business units - Lighting (products earmarked
for third party customers), Engine Control (FIRE petrol
engines and Small Diesel engines for the Fiat 500) and
Electronic Systems (instrument clusters for third party
customers) - in addition to the increased production of
components for the Fiat 500. In the first nine months of
2007, Magneti Marelli had revenues of 3.7 billion, up
11.0% compared with the corresponding period in 2006.
Magneti Marelli had a trading profit of 145 million in
the first nine months of 2007, an increase of 9 million
compared with the corresponding period in 2006.
Teksid had
revenues of 164 million in Q3 2007, down 26.5% from Q3
2006, due to the sale of the Magnesium activities. On a
like-for-like basis revenues were unchanged,
notwithstanding a slight decrease in volumes (-1.8%):
higher sales on the Brazilian and European markets
nearly offset a decrease in the North American market.
In Q3 2007, Teksid had a trading profit of 13 million,
down from 15 million in Q3 2006, which included 3
million from divested activities. The improvement on a
comparable basis is due to efficiency gains, more than
offsetting the increase in raw materials and energy
costs. In the first nine months of 2007 Teksid had
revenues of 555 million, down 25.3% over the
corresponding period of 2006. On a like-for-like basis
the decrease amounted to 4.8%. Teksid closed the first
nine months of 2007 with a trading profit of 45
million, in line with the corresponding period of 2006.
On a comparable scope of operations, trading profit
increased by 14 million.
In Q3 2007,
Comau had revenues of 256 million, down 11.1% from Q3
2006. The decrease is attributable to the downsizing of
the Body-welding operations in Europe as well as to the
Powertrain business as a result of difficult trading
conditions for the sector. Exchange rate trends also
negatively influenced revenue performance. The order
intake of the period amounted to 220 million (+19.9%)
and benefited from the positive performance of
Engineering and Service activities in South America. In
Q3 2007, Comau trading profit was a substantial
break-even (1 million), compared with a trading loss of
8 million in Q3 2006. The improvement is the result of
the reshaping plan launched in the second half of 2006
and whose effects start to be visible. In the first nine
months of 2007 Comaus revenues amounted to 792
million, a decrease of 15.7% compared with the
corresponding period in 2006. Order intake for the
period totalled 909 million, virtually unchanged with
respect to the first nine months of 2006. The order
backlog at the end of September totalled 661 million,
up 14% from December 31, 2006. In the first nine months
of 2007 Comau had a trading loss of 24 million, against
a trading loss of 29 million in the corresponding
period of 2006, reflecting the positive results of Q2
and Q3.
Other Businesses
Itedi closed
Q3 2007 with revenues of 79 million, down 1.3% from Q3
2006. The decrease is attributable to lower advertising
revenues at Publikompass, whose customer portfolio
contracted. Itedi had a trading loss of 2 million,
partially reflecting the seasonality of the business.
The recovery due to overhead cost containment
initiatives was offset by the unfavourable effects of
lower advertising revenues. In the first nine months of
2007, Itedi achieved revenues for 284 million,
approximately in line with the corresponding period of
2006. Itedis trading profit in the first nine months
was 4 million, up 1 million from the corresponding
period in 2006. In Q3 2007, the trading loss of all
remaining activities, including Holding companies and
the impact of eliminations and consolidation
adjustments, increased by 6 million mainly due to the
expensing of stock option plans. In the first nine
months of 2007 trading loss increased by 61 million,
mainly due to the expensing of stock option plans, a
different scope of operations (disposal of Banca Unione
di Credito and other minor entities), as well as lower
activities on the High Speed Railway contract in Q1.
Significant Events since June 30, 2007
Following
upgrades by Fitch (to investment grade level with stable
outlook) and Standard & Poors earlier in the year, in
August Moodys also rewarded the speed with which the
Group was able to carry on its turnaround, raising its
rating on Fiats long-term debt from Ba2 to Ba1.
Fiat Group
Automobiles signed a Memorandum of Understanding with
Chery Automobiles, one of the major Chinese carmakers
and the countrys leading car exporter, for the
establishment of a 50-50 passenger car joint venture.
The Company, which will distribute Alfa Romeo, Fiat and
Chery cars, will be operational from 2009. Fiat Group
Automobiles signed a Letter of Intent with the Russian
company Severstal Auto for the creation of a commercial
and industrial joint venture in Russia. The joint
company will be responsible for the sale and marketing
of all Fiat branded vehicles (cars and light commercial
vehicles) in the Russian Federation, as well as the
manufacturing facility where the Fiat Linea will be
produced starting from the first quarter of 2008. The
Russian production site will become part of FGAs global
manufacturing footprint and the JV will be part of Fiat
Group Automobiles marketing and product strategy.
Magneti
Marelli entered into two agreements. In September it
signed a Memorandum of Understanding with Chery
Automobile Co. Ltd under which a joint venture will be
established in China for the production of hydraulic
components for the Selespeed transmission. The new
company will be operational by the spring of 2008 and
the components it will produce will be used by Chery and
other manufacturers. In October, Magneti Marelli signed
an agreement with Suzuki Motor Corporation and Maruti
Suzuki India Limited for the creation of a joint venture
in India for the production of electronic control units
for diesel engines, for Suzuki-Maruti and third party
customers. Start of production is scheduled for the end
of 2008 and this plant is expected to produce a total of
about 500,000 control units per year when fully
operational.
In
mid-October, the Fiat Group and JSC AUTOVAZ signed a
Memorandum of Understanding as the basis for the
establishment of cooperation initiatives aimed at
supporting the expansion of Autovaz in the area of
passenger cars. Joint teams will be set up by the two
Groups to determine the feasibility and specificity of
the nature of cooperation, which should encompass
engineering and technological processes, development,
manufacturing, product sourcing, engines and other
components. Fiat Groups involvement in the development
of the Fiat brand in Russia based on prior agreements
with other parties continues strong and is not affected
by this Memorandum of Understanding.
In light of the sustained low trading volumes of its
shares, on August 3, Fiat announced its intention to
proceed with the delisting of its American Depositary
Shares, from the New York Stock Exchange. The delisting
do not affect Fiats business strategy in the United
States nor its commitment to high standards of corporate
governance and financial reporting. The delisting became
effective as of August 23, 2007, and the deregistration
is currently expected to become effective in November
2007. Fiat maintained its American Depositary Receipt
facility as a Level 1 program. On September 20, Fiat
sold its 1.83% equity stake in Mediobanca S.p.A. to
Goldman Sachs International, for a total cash-in of 225
million, realizing a gain of 118 million. Fiat
continued the share buy-back program announced in April.
On September 30, 2007, the total number of ordinary
shares purchased from the beginning of the program
amounted to 19.127 million for a total invested amount
of 401 million.
Outlook
The Groups
results for the third quarter are in line with
expectations and confirm the positive trend of the first
part of the year. The Group therefore believes it can
continue on its growth and margin expansion path, as set
out in the 2007-2010 industrial plan. In view of the
results achieved in the first nine months, Fiat is
moving up its full year guidance:
Group trading profit between 2.9 and 3 billion (5+%
trading margin);
Net income between 1.8 billion and 1.9 billion;
Basic earnings per share between 1.40 and 1.50;
Net industrial debt of approximately 500 million
(excluding the impact of additional
share buy-backs). 2008 targets are confirmed.
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