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BORSA ITALIANA
EUR 12.33 +1.23 %
NYSE
USD 13.63 -3.88 %

FCA: 2018 Third Quarter Results

FCA reports record Adjusted EBIT at €2.0 billion and margin at 6.9%, including Magneti Marelli. NAFTA up 51% with margin at 10.2%, Adjusted Net Profit at €1.4 billion, up 51%. Net Profit down 38% to €0.6 billion, including €0.7 billion charge related to U.S. diesel emissions matters. Operating metrics guidance confirmed; Net industrial cash reflects production realignment to expected demand and accelerated discretionary pension contribution.

  • Worldwide combined shipments(2) of 1,160 thousand units, up 3%, mainly due to NAFTA and LATAM, partially offset by APAC and EMEA

  • Net revenues(1) of €28.8 billion, up 9% (up 11% at constant exchange rates, or CER), with higher shipments, positive pricing and mix

  • Adjusted EBIT(1),(3) of €1,995 million, up 13% (up 16% at CER), with margin up 20 bps to 6.9%

  • Adjusted net profit(1),(3) of €1,396 million, up 51% (up 54% at CER); Net profit of €564 million, down 38% (down 33% at CER) reflecting a €0.7 billion charge for estimated costs related to U.S. diesel emissions matters(*)

  • Net industrial debt(1) of €0.2 billion, after acceleration of €0.6 billion discretionary pension contribution, net of tax

  • Moody's raised FCA's outlook to positive from stable and affirmed its Corporate Family Rating at "Ba2"

  • Agreement announced to sell Magneti Marelli to CK Holdings Co., Ltd. The combined business will operate under the name Magneti Marelli CK Holdings. The agreement represents a transaction value of €6.2 billion

  • Transaction enables payment of an extraordinary dividend of €2 billion at closing, which is in addition to the commencement of an annual ordinary dividend in Spring 2019 of 20% of earnings as presented at 2018 Capital Markets Day. Both are subject to Board of Directors and shareholder approval

The following Group results(1) include Magneti Marelli for comparability with prior periods and previously provided guidance


FINANCIAL RESULTS(1)
(including Magneti Marelli)

Nine months ended September 30 Three months ended September 30
2018 2017 Change(€ million, except as otherwise noted)2018 2017 Change
3,6653,493172+5% Combined shipments (thousands of units)1,1601,12337+3%
3,5263,267259+8%Consolidated shipments (thousands of units)1,1251,05174+7%
84,79182,0582,733+3% Net revenues28,77126,4142,357+9%
5,2615,160101+2%Adjusted EBIT
1,9951,758237+13%
2,3392,706(367)(14)% Net profit564910(346)(38)%
3,4152,673742+28%Adjusted net profit1,396922474+51%
1.481.73(0.25) Diluted earnings per share (EPS) (€)0.360.58(0.22)
2.171.710.46 Adjusted diluted EPS(3) (€)0.890.590.30


At September 30, 2018At December 31, 2017Change At September 30, 2018At June 30, 2018Change
(189)(2,390)2,201 Net industrial cash/(debt)(189)456(645)
(15,426)(17,971)2,545Debt(15,426)(16,362)936
19,97520,377(402) Available liquidity19,97521,170(1,195)

ADJUSTED EBIT(1)

  • NAFTA record results of €1.9 billion, with record 10.2% margin on the back of new Jeep and Ram models

  • LATAM up 41% despite economic deterioration in Argentina and negative foreign exchange effects

  • EMEA decrease due to Worldwide Harmonized Light Vehicle Test Procedure (WLTP) transition and associated negative price impacts

  • APAC decreased due to lower China volumes and prior year benefit from Tianjin insurance recoveries

  • Maserati decreased due to lower China and Europe volumes

ADJUSTED NET PROFIT(1)

  • Adjusted net profit up 51%, due primarily to stronger operating performance, reduced net financial and tax expense

  • Net financial expenses of €278 million, down €43 million

  • Tax expense of €321 million, down €194 million, due to reduced U.S. tax rate and tax benefits recorded on tax positions finalized in the quarter, including the impact from an accelerated discretionary pension contribution

NET INDUSTRIAL CASH/(DEBT)

  • Change of €0.6 billion from Q2 2018 to Net industrial debt position of €0.2 billion primarily due to acceleration of €0.6 billion discretionary pension contribution, net of tax

  • Industrial free cash outflows of €0.2 billion (net of capital expenditures of €1.5 billion), primarily impacted by working capital seasonality

  • Available liquidity decreased €1.2 billion to €20.0 billion, reflecting repayment of notes at maturity and accelerated discretionary pension contribution

2018 GUIDANCE(4)

Operating metrics confirmed. Net industrial cash reflects production realignment to expected demand and accelerated discretionary pension contribution, net of tax

  • Net revenues €115 - €118 billion

  • Adjusted EBIT €7.5 - €8.0 billion

  • Adjusted net profit ~ €5.0 billion

  • Net industrial cash of €1.5 - €2.0 billion from ~ €3.0 billion

 

 

(*) This charge does not represent an agreed settlement amount nor an admission of liability, but represents an estimate of the provisions under applicable accounting guidelines based on progress of settlement discussions with counterparties.

(1) Refer to page 2 for highlights excluding Magneti Marelli in line with its presentation as a discontinued operation in the Interim Report for the three and nine months ended September 30, 2018;

(2) Combined shipments include all shipments by the Group's unconsolidated joint ventures, whereas consolidated shipments only include shipments from the Group's consolidated subsidiaries;

(3) Refer to page 6 for the reconciliations of Net profit to Adjusted EBIT, page 7 for the reconciliations of Net profit to Adjusted net profit and Diluted EPS to Adjusted diluted EPS and page 8 for the reconciliations of Debt to Net industrial cash/(debt) and cash flows from operating activities to Industrial free cash flows;

(4) Guidance is not provided on the most directly comparable IFRS financial statement line item for Adjusted EBIT and Adjusted net profit as the income or expense excluded from these non-GAAP financial measures in accordance with our policy are, by definition, not predictable and uncertain. Amounts include the results of Magneti Marelli and do not include any impacts from the announced sale of Magneti Marelli or U.S. diesel emissions matters.



  • FCA: 2018 Third Quarter Results