Fiat Group’s full year 2013 trading profit slipped EUR1bn year on year to EUR3.4bn after “a significant reduction in losses in the Europe, Middle East and Africa (EMEA) region, “promising initial results” from a new premium strategy and strong cash generation (of EUR1.7bn) in the fourth quarter,” the automaker said on Wednesday (29 January, 2014).
Including Chrysler, which Fiat took over completely earlier this month, group worldwide shipments were up 3% to 4.4m units, driven by growth in NAFTA and Asia-Pacific (APAC) regions which “more than offset moderate contractions in Latin America (LATAM) and EMEA”.
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Jeep set a global sales record for the second consecutive year of 732,000 vehicles.
But revenue rose just 3% – to EUR87bn – or by 7% adjusted for exchange rates, with increases in NAFTA and APAC offset by reductions in LATAM and EMEA. Luxury brands posted a strong annual increase with Maserati more than doubling over the prior year.
Fiat said the trading profit actually rose EUR0.1bn on a currency adjusted basis and included EUR0.3bn in higher R&D amortisation mainly due to new product launches in NAFTA [key among these was the Jeep Cherokee, delayed at the last minute for automatic transmission software fixes – ed].
The EMEA region saw losses reduced EUR233m to EUR470m, mainly due to improved product mix and cost efficiencies. APAC posted a 38% year over year increase to EUR358m. NAFTA was down 9% (-6% adjusted for exchange), due to higher costs related to product launches and the associated increase in R&D amortisation. LATAM decreased 41% (-33% exchange) due to input cost inflation, a less favourable production mix, lower volumes and a decrease in Venezuela profitability.
Both Ferrari and Maserati posted “significant” annual improvements with Maserati tripling to EUR171m.
Net profit was EUR1,951m versus EUR896m in 2012, including a EUR1.5bn positive impact from the recognition of net deferred tax assets related to Chrysler offset by EUR0.5bn in net one-off charges. Excluding those items, net profit was EUR943m (EUR1,140m).
Fourth quarter
Group revenues were EUR24bn for the period, up 10% with NAFTA up 17% to EUR13.3bn, LATAM off 23% to EUR2.2bn, (there were sales tax incentives in Brazil a year ago), APAC up 62% to EUR1.3bn and EMEA down 3% to EUR4.4bn.
The luxury brands increased revenues by 66% to EUR1.3bn, driven by Maserati.
Trading profit rose 5% to EUR931m with the NAFTA region up 12% to EUR620m due to new model launches, LATAM down EUR198m to EUR44m as a result of input cost rises, unfavourable mix and lower volumes. APAC increased 37% to EUR63m. In EMEA, losses were reduced by EUR70m (60%) to EUR50m, benefiting from improved product mix and efficiency.
Luxury brands trading profit increased 74% to EUR223m, driven by the strong performance of Maserati (up EUR110m to EUR123m).
Q4 2013, one-off expense of EUR483m related mainly to EUR390m in asset write-downs associated mostly with the rationalisation of architectures associated with the new product strategy particularly for the Alfa Romeo, Maserati and Fiat brands as well as charges related to asset impairments for the cast-iron business in Teksid. There was also a EUR56m write-off connected to the Chrysler VEBA deal.
Net profit was EUR1,296m versus EUR224m in Q4 2012.
Fiat, excluding Chrysler, reported a net loss excluding one-offs of EUR235m versus a EUR123m loss a year ago.
Group guidance for 2014:
- Revenues of about EUR93bn
- Trading profit in the EUR3.6 to EUR4.0bn range
- Net income in the EUR0.6 to EUR0.8bn range, with EPS to improve from EUR0.10 (ex-one-offs) to EUR0.44-EUR0.60 (guidance for net income takes into account increased deferred tax charge of EUR0.5bn due to the recognition of net deferred tax assets at year-end 2013 related to Chrysler)
