FIAT GROUP FINANCIAL RESULTS 2001

Fiat SpA has released the results for the fiscal year 2001 and for the fourth quarter: The Fiat Group closed 2001 with overall operating and financial results in line with guidelines produced in December.
At 58 billion Euros, net revenues for the year were slightly higher than in 2000, as gains by FiatAvio and Toro Assicurazioni and the contribution provided by Business Solutions more than offset the declines by Fiat Auto and the components sectors.
In the fourth quarter, revenues were about the same as in the last three months of 2000, even though Fiat Auto, Teksid and Magneti Marelli experienced sales declines.
Operating income for 2001 totalled 318 million Euros, compared with 855 million Euros in 2000.
In the fourth quarter, the Group recorded an operating loss of 245 million Euros as against an operating income of 355 million Euros in the same period of the previous year, affected by lower sales volume at Fiat Auto, Iveco and the various components sectors.
CNH, FiatAvio and Toro Assicurazioni increased their contribution to the Group’s quarterly results.
As expected and previously announced, the Group reported a consolidated net loss, which amounted to 791 million Euros.
This performance is the combined result of a contraction in operating margins and restructuring charges.
The Group’s net financial position improved during the fourth quarter of 2001.
As expected, net debt declined substantially, falling from 7.5 billion Euros in September 2001 to 6 billion Euros at 31 December 2001.
This improvement was made possible by a reduction in working capital made possible by seasonal factors.
During the first six months of 2001, the Group’s performance was consistent with the annual profitability and debt reduction objectives it announced in April. But in the second half of the year, deteriorating economic conditions and consumer confidence meant the Group faced falling sales in a number of sectors and increasingly aggressive sales policies by competitors.
The Group adopted counter measures including cutting back production, trimming factory and sales network inventories at CNH and even more at Fiat Auto, reducing overheads.
The Next programme was launched by all Group Sectors to re-engineer core processes, which is expected to produce savings of 1.5 billion Euros by 2004.
An important development involving Fiat Auto was the launch of the Stilo, which emphasises the strategy of repositioning the brand at a higher level by offering cars with sophisticated technology. It has been well received in European markets.
The forecast for the international economy calls for a gradual recovery during 2002.
The combined impact of weak economic conditions and the cyclical nature of the principal markets means a high degree of uncertainty about the anticipated contraction of demand.
It is clear 2002 will be a difficult year and Fiat remains firmly committed to generating significantly higher full year operating income than in 2001.
The Group’s priority remains reducing indebtedness, which is expected to be halved by the end of 2002 thanks to the implementation of the new programmes.