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EuroCargoTector
Iveco Group Consolidated Financial Statements
2001
DIRECTORS
Paolo CantarellaChairman
Giancarlo Boschetti Managing Director (*)
Michel de Lambert Managing Director (**)
Damien ClermontDirector
Bernhard KappDirector
Georg KruppDirector
Otto Graf LambsdorffDirector
Francesco Paolo MattioliDirector
Umberto QuadrinoDirector
Lucio RondelliDirector
Sir Hugh RossiDirector
Abdulla SaudiDirector
Giancarlo VezzaliniDirector
(*) to 31/12/2001
(**) from 1/01/2002
Foreword 2
Report on Operations 6
Markets and economic context 6
Activities of the Iveco Group in 2001 7
Business Unit Light 12
Business Unit Medium 14
Business Unit Heavy 16
Business Unit Engines 18
Specialties 20
Operations in the Strategic Areas 24
Operations in Other Countries 25
Financing and Service Activities 26
Customer Service 28
Information Technology 30
Human Resources 31
Events occurring after the close of the year 33
Consolidated Financial Statements 34
CONTENTS
99 00 010
100,000
200,000
300,000
400,000
500,000
ENGINES PRODUCTION
(UNITS)
99 00 010
60
120
180
240
RESEARCH ANDDEVELOPMENT EXPENSES(MILLION EUROS)
99 00 010
40,000
80,000
120,000
160,000
200,000
VEHICLES SOLD
(UNITS)
The launch of theStralis range powered
by the Cursor 10 and Cursor 13
and completed by the 540 Hp version isthe crowning moment
in the evolution ofIveco’s heavy on-road
vehicles begun in 1998with the launch of thefirst Cursor 8 engine.
1
99 00 010
150
300
450
600
OPERATING INCOME
(MILLION EUROS)
99 00 010
2,500
5,000
7,500
10,000
NET SALES
(MILLION EUROS)
99 00 010
1.5
3.0
4.5
6.0
7.5
OPERATING INCOME/NET SALES(%)
HIGHLIGHTS
1999 2001
Commercial data
Sales of trucks, buses and special vehicles (units) 149,903 164,776 160,397
Engines production (units) 404,917 457,745 413,222
Western European truck market share GVW >= 3.5 tonnes (%) 16.6 17.8 17.0
Financial data (million euros)
Net sales 7,386.2 8,610.7 8,650.1
Operating income 311.1 489.1 270.7
Net profit 162.7 146.2 (124.6)
Cash flow (net profit plus depreciation and amortization) 415.8 569.2 285.5
Tangible fixed assets as of December 31 2,305.2 2,278.9 2,286.7
Net financial position (indebtedness) as of December 31 (402.2) (222.6) (210.9)
Stockholders’ equity of the Group as of December 31 1,817.5 1,913.7 1,702.7
Ratios (%)
Operating income / Net sales 4.2 5.7 3.1
Net profit / Net sales 2.2 1.7 (1.4)
Cash flow / Net sales 5.6 6.6 3.3
Other data
Gross additions to tangible fixed assets (million euros) 359.5 655.8 718.3
of which: vehicles on operating leases (million euros) 60.7 306.1 348.3
Gross additions / Net sales (%) 4.9 7.6 8.3
Research and development expenses (million euros) 214.6 226.5 214.9
Research and development expenses / Net sales (%) 2.9 2.6 2.5
Number of employees as of December 31 36,217 35,852 35,340
2000
CASH FLOWGROSS ADDITIONSVEHICLES ON OPERATING LEASES(EURO MILLION)
99 00 010
150
300
450
600
750
In Western Europe, the expansionary trend that characterized the transportation industry and the
market for commercial vehicles in recent years came to an end in 2001. Overall, demand held at
about the same level as in the previous year, but conditions varied widely among the different
market segments. New registrations of light commercial vehicles increased by a further 4.0% to
an all-time high of 359,000 units, but demand for medium range vehicles fell by 5.6% to 87,400
units. In the heavy truck market segment, where the slowdown that started in the last quarter of
2000 continued through 2001, new vehicle registrations declined by 3.1% to 236,300 units.
With the exception of Poland, the Central European countries where Iveco operates enjoyed
buoyant demand for commercial vehicles. In Latin America, the crisis in Argentina brought to a
halt the expansionary trend that all markets in that region had enjoyed.
Overall, Iveco sold 160,400 vehicles, or 2.5% less than in 2000, including 128,400 in Western
Europe (-1.9%), 9,700 in Eastern Europe (+14%) and 22,300 in markets outside Europe (-12%).
Iveco’s share of the Western European market for vehicles with a GVW of 3.5 tons or more
decreased to 17.0% (17.8% in 2000), due mainly to a sales fall off in the light-vehicle segment,
where Iveco’s share fell to 19.0%, or 1.7 percentage points less than in 2000. However, there
were encouraging signs of a turnaround during the second half of the year ; with the specific
reference to the segment between 2.8 - 3.49 GVW, the units sold increased from 4,900 of 2000
to 6,340, equal to +30%.
On the other hand, Iveco increased its penetration of the medium vehicle market to 25.0% (+1
percentage point over 2000), owing in part to the successful introduction of the "EuroCargo
Tector" and to the good performances of the Daily medium, and held its share of the heavy truck
segment relatively steady at 11.0%, or just 0.2 percentage points less than in 2000.
In Latin America, sales of the different Iveco vehicles totaled more than 7,800 units (+26%). In
Brazil, sales of the Daily surged to 3,258 units (2,818 units in 2000), pushing Iveco’s share of the
local market to 25.5%, or 4 percentage points more than in 2000.
In Argentina, where demand was severely depressed by the country’s economic crisis, Iveco’s sales
fell by 30% (1,430 units, compared with 2,060 in 2000), but the overall market contracted by
more than 50%.
In China, Naveco, a 50% joint-venture with the Yueijin Group, produced and sold about 13,100
vehicles, or 25% less than in 2000. An increase in local competition and order postponements
caused by the upcoming introduction of a new light vehicle are the main reasons for this decline.
In Turkey, where demand was down sharply, Otoyol, a 27% affiliate, sold about 3,600 vehicles, or
about half the number sold in 2000.
In the bus market, Irisbus sold about 9,500 vehicles, or 3% less than in 2000. This modest
decrease was due mainly to delays in the awarding of contracts following calls for tenders by
public transportation departments, particularly in Italy and Spain.
In 2001, Iveco produced 413,300 diesel engines, or about 9% fewer than in 2000. This decrease
2
FOREWORD
Paolo CantarellaMichel de Lambert
3
is due to a reduction in the output of small and medium engines that mirrored declining sales of
Iveco vehicles in those segments and lower shipments to non-captive customers.
During the year, the Company continued to pursue its product innovation and development programs,
focusing primarily on repowering its line of medium vehicles with new "Tector" engines and designing
a new range of V-shaped engines for electric power generation and rail transport applications.
In addition, it proceeded with plans to expand its engine line. This included rounding out the family
of Cursor Heavy range engines, introducing new lines of Medium and Light range engines, and
developing a cab for a new Heavy road vehicle.
Irisbus continued to invest in product innovation, placing particular emphasis on the development
of the "Civis", a new mass transit vehicle with an electric or hybrid drive system.
Substantial resources were devoted to increasing the pool of rental vehicles. Of the total
investment of 348 million euros (306 million euros in 2000), about 302 million euros (277 million
euros in 2000) were allocated to the fleet operated by the Fraikin Group.
During the year, Iveco and the Changzhou Bus Company, a Chinese group, signed an agreement
establishing a 50% joint-venture that will manufacture and distribute urban and long-distance
busses. With a market share of 16.0%, CBC ranks third in the Chinese urban transit market. China
is the largest bus market in the world, with annual demand of over 50,000 units.
The finance companies of the Transolver Finance Group, which provide financing and leasing
services to support the sales of Iveco products, enjoyed strong growth in 2001.
The portfolio of financed vehicles grew from 85,000 units in 2000 to 99,100 units of financed
vehicles in 2001, for a total net value of 2,020 million euros a the end of 2001.
The biggest increases occurred in Italy, Germany and Great Britain. Transolver Finance provided
financing for a rising share (30.0%) of the vehicles sold by Iveco in Western Europe.
During the year, Transolver started finance companies in Great Britain, Switzerland and Brazil.
These new units, which are already producing gratifying results, expanded the Company’s reach
beyond Iveco’s four main markets : Italy, France, Germany and Spain.
The Company’s leasing operations, which are run by Fraikin and Transolver Service, increased their
park of leased vehicles to 37,000 units at December 31, 2001, for a gain of 9.7% compared with
the end of 2000. Some of the best improvements occurred in France, Great Britain and Spain.
During the year, Iveco continued to successfully integrate the operations of the Fraikin Group.
Fraikin, which retained its position as the unchallenged leader of the French market, brings to the
Company invaluable expertise in the contract hire of commercial vehicles and the management of
large fleets.
In 2001, Iveco continued to expand its portfolio of maintenance and repair services, signing up
11,900 new customers, with a total portfolio of 33,800 contracts at December 31, 2001.
In 2001, Iveco’s net revenues increased by 0.4% to 8,650 million euros, up from 8,611 million
euros in 2000.
4 I V E C O N V C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Operating income amounted to 271 million euros (489 million euros in 2000). The return on
sales was 3.1%, or 2.6 percentage points less than the 5.7% reported in 2000. This decline is the
combined result of lower unit sales for all products distributed by Iveco and, to a lesser extent,
modest across-the-board price decreases, coupled with a reduction in gains earned on
divestitures.
In 2001, Iveco laid out an important restructuring plan due to produce important operating
efficiencies. However, this plan required the Company to aside reserves for 105 million euros
related to extraordinary charges, which had a significant negative impact on the bottom line.
For the year as a whole, Iveco reported a consolidated net loss of 123 million euros (consolidated
net income of 147 million euros in 2000). In 2001, depreciation and amortization totaled 410
million euros (423 million euros in 2000) and research and development expenditures amounted
to 215 million euros (227 million euros in 2000).
The market outlook for 2002 is not encouraging, as demand is expected to show a significant
decline, especially in Western Europe.
Despite this environment, Iveco is committed to closing the year in the black and to reduce its
financial needs. A key prerequisite for achieving this goal and minimizing the negative impact of
unfavorable market conditions is the effort in implementing the Company’s restructuring program.
This restructuring effort, which must focus on achieving an optimum balance between quality and
cost, cannot be limited to just one year and has to be projected over a medium- to long-term
horizon.
Iveco can face the challenges of the market with confidence, particularly in view of the fact that
it has completed the capital investments needed to broaden its engine lines, which now
encompass power plants for every possible application, and not just in the automotive industry.
Another positive factor is the launch of the Stralis. The introduction of this new heavy on-road
vehicle marks the completion of a product investment program that started in 1996.
The Stralis offers a number of important innovations. Its aerodynamic design, modular interior
configurations that can accommodate different transport missions, highly innovative cab interior,
high-performance power train, and extensive use of electronic control units that interface with
each other to provide a wide range of diagnostic information place it at the top of the heavy
vehicle segment.
In 2002, the Company will complete the acquisition of the 50% interest in Irisbus held by
Renault, thereby gaining full control of this bus manufacturer.
The total integration of Irisbus into Iveco’s organization and the opportunities created by the
agreement with CBC in China will transform Iveco into one of the major players in the global bus
market.
Iveco is ready to face the challenges posed by the difficult economic conditions that are expected
to characterize the world economy in 2002 with the certainty that it will be able to capitalize on
I V E C O N V C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 5
the opportunities it has created by successfully implementing major product development and
capital investment programs.
We are confident that every person in our Company, at every level of the organization, will
continue to pursue these opportunities with unflagging determination.
At the end of 2001, Giancarlo Boschetti, who had been the Company’s CEO since 1991, was
asked to assume the post of Chief Executive Officer of Fiat Auto.
While at Iveco’s helm, Giancarlo Boschetti provided an invaluable contribution in helping the
Company consolidate its position and grow its businesses. It was precisely during this past decade
that Iveco strengthened its role as a global player and adopted an innovative organization based
on Business Units, which provided it with a more direct interface with its customers and enabled it
to focus its efforts on improving its products and services.
Iveco’s Chairman and new CEO are well aware of this contribution and, speaking on behalf of the
entire Board of Directors, thank Mr. Boschetti for these achievements.
April, 2002Michel de LambertManaging Director
Paolo CantarellaChairman
6 R E P O R T O N O P E R A T I O N S
REPORT ON OPERATIONS
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Western Europe 441.9 347.9 378.5 454.9 475.0 488.8 567.5 629.4 681,7 682.7
France 71.6 56.7 63.0 78.6 79.1 74.4 89.3 100.3 117.0 123.1
Germany 129.4 94.7 92.7 100.8 100.9 107.1 131.4 149.3 150.5 140.4
UK 58.1 62.7 78.3 92.7 93.8 96.1 108.5 105.6 113.5 118.6
Italy 63.6 47.2 46.8 61.2 69.6 63.1 68.1 85.1 94.8 94.5
Spain 39.4 22.7 26.1 35.0 36.7 45.5 52.6 65.8 72.4 72.8
Rest of Western Europe 79.8 63.9 71.6 86.7 94.8 102.6 117.6 123.5 133.6 133.2
COMMERCIAL VEHICLE DEMAND TREND IN WESTERN EUROPE GVW >=3.5 T (THOUSANDS OF UNITS)
(1999 data revised)
NEW REGISTRATIONS TREND IN WESTERN EUROPE(BY BUSINESS UNITS)
3.5-6.0 t GVW 6.1-15.9 t GVW >=16.0 t GVW Trend
Markets and economic context
2001 brought the most serious slowdown in the world
economy since 1982, although the intensity and timing
differed. All the world's main economic areas were
affected simultaneously.
The first signs of a slowdown in the U.S. economic
situation, induced by the deceleration of industrial
output and of employment, emerged in the early
months of 2001 and were aggravated by the events of
September 11th, bringing to an end an economic boom
that had lasted 10 years. However, just a few months
later, the first signs of a recovery are already
perceptible.
The Euro area was affected by the situation in America,
GDP growth faltered, and major countries recorded
balance of payments deficits. In the first half of 2001
the inflation rate was above 3%, but in the second half
of the year there was a widespread reduction in
interest rates, partly as an effect of falling oil prices.
During 2001 the Japanese economy entered its third
recession in 10 years, and GDP fell a further 0.5% on
2000.
In South America, Argentina reached financial collapse
in the final days of the year, following an economic
crisis lasting more than three years: the country had to
declare that it was unable to service its foreign debt.
The Brazilian economy was also sluggish as a result of
political instability, a strict monetary policy and the
energy crisis, but was only marginally affected by the
Argentine crisis.
The events in America had a significant influence on
economic results in the NAFTA area, the world's
largest market, where total demand for haulage
vehicles with GVW above 6 tonnes, plummeted to
409,000 units, 24% down on 2000, which was already
on the downturn.The contraction in the heavy class 8
92 93 94 95 96 97 98 99 00 01
units/1000 350
300
250
200
150
100
50
M A R K E T S A N D E C O N O M I C C O N T E X T 7
vehicle segment was particularly strong, to 179,000
units, while the market for medium class vehicles was
more stable, absorbing 230,000 units.
The global crisis impacted differently on the
commercial vehicle markets in the various Asian
countries; the worst hit countries were those, such as
Malaysia, Singapore and Taiwan, where development is
sustained by exports of technological products. On the
other hand, countries like South Korea, which have
succeeded in diversifying their manufacturing
structure, were less affected by the negative trend.
The commercial vehicle market in Japan continued the
contraction begun in 2000, and sales totalled 83,000
vehicles (down 1.9% on 2000) in the segment above 6
tonnes gross vehicle weight.
In the Eastern European countries of interest to Iveco,
we should mention the strong growth of the Russian
market for the third consecutive year. In 2001 this
growth was sustained primarily by domestic demand,
whereas in 2000 the growth in GDP had been fuelled
mainly by exports.
In Poland, 2001 was one of the worst years since the
end of Communism; the growth rate was the lowest in
the last ten years and unemployment reached record
levels. The main cause of this situation lay in a very
restrictive monetary policy, caused by a huge public
sector deficit.
After two consecutive financial crises in a short space
of time, Turkey was also hit by a strong economic
recession caused by very high inflation, but it avoided
financial collapse thanks to the promise of new loans
from the International Monetary Fund.
In 2001 demand for commercial vehicles in Western
Europe totalled 682,700 units, substantially in line with
2000, breaking the growth trend of the last seven
years.The market began to show signs of weakness in
the last part of the year.
Analysis by segment shows positive growth of +4%
over the previous year for light commercial vehicles
(gross vehicle weight from 3.5 to 6 tonnes) which
reached an all-time high of 359,000 registrations.
The situation in the medium vehicle segment (gross
vehicle weight from 6.1 to 15.9 tonnes) was less
positive, falling by 5.6% (87,400 registrations), while
the heavy segment (gross vehicle weight from 16
tonnes up) contracted by 3.1% on 2000 (236,300
registrations).
The stability of European demand (gross vehicle
weights above 3.5 tonnes) is the result of varying
trends on the different markets: from continued
growth in France (+5.2%) and the United Kingdom
(+4.5%), to substantial stability in Italy (-0.3%) and a fall
in Germany (-6.7%) justified by the momentary
recession in that country, while the Spanish market
was stable (+0.6%).
Activities of the Iveco Group in 2001
In 2001 Iveco sold a total of 160,400 vehicles on world
markets, 2.7% down on 2000 (164,800 units). This
breaks down into 154,060 units in segments above 3.5
tonnes GVW (159,900 in 2000), and the remaining
6,340 vehicles in the 2.8 to 3.49 tonnes segment
(4,900 in 2000).
If we include sales by associated licensees, which
totalled approximately 34,300 units (42,700 in 2000),
overall sales reached 194,700 units.
Iveco sold 128,400 vehicles in Western Europe, a
marginal decrease of approximately 1.9% on 2000 sales
(130,900 units).
Sales were particularly affected by the contraction of
the German market, where Iveco sales volumes fell by
12% on 2000, and by lower sales in Italy (-14%), the
result of aggressive marketing initiatives by the
competition, particularly in the light vehicle segments.
These falls were counterbalanced by a strong increase
in sales in the United Kingdom (+17.6%) due to the
positive effects of increased demand for light vehicles.
Iveco's share of the Western European market (for
vehicles with GVW over 3.5 tonnes) decreased from
17.8% in 2000 to 17% in 2001, mainly as a result of the
contraction in the light vehicle segment, where Iveco
8 R E P O R T O N O P E R A T I O N S
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Western Europe 19.4 20.1 19.8 19.1 20.0 18.4 17.0 16.6 17.8 17.0
France 18.1 18.7 18.6 17.4 18.9 18.6 17.1 16.7 19.3 18.6
Germany 11.5 13.5 13.5 11.4 13.2 12.3 11.2 10.8 11.0 9.8
UK 12.7 14.4 13.6 14.4 15.4 14.5 14.0 12.1 11.7 11.9
UK (GVW >=3.51t) 23.4 24.8 22.2 21.4 21.8 21.5 20.5 18.3 17.1 16.1
Italy 54.6 55.1 56.0 51.8 48.0 45.9 44.0 41.3 42.4 40.0
Spain 22.7 22.5 21.8 22.2 22.6 20.4 19.4 19.3 20.4 20.0
Rest of Western Europe 8.6 10.0 11.3 10.1 10.8 10.3 9.4 9.0 10.3 9.8
TREND OF IVECO'S MARKET SHARE IN WESTERN EUROPE (GVW >= 3.5T)
IVECO MARKET SHARE TREND IN WESTERN EUROPE(BY QUARTERS AND GVW SEGMENT)
I qtr II qtr III qtr IV qtr I qtr II qtr III qtr IV qtr2000 2001
m.s. %
6.1-15.9 t GVW>=3.5 t GVW 3.5-6.0 t GVW >=16.0 t GVW Trend
25
20
15
10
achieved a 19% share, down 1.7 percentage points on
2000, but there were significant signs of a recovery in
the second half of the year.
What is more, competition from new models was
particularly aggressive in Spain and Italy.
In 2001, Iveco's share of the medium vehicles market
reached 25%, up one percentage point on 2000.
Market share improved in the United Kingdom, Spain
and Germany in particular, thanks to the success of the
new EuroCargo Tector, while it was substantially stable
in the other European markets.
In the heavy vehicle segment, Iveco's share in 2001
remained stable at 11% (11.2% in 2000), with an
improvement in the second half, due partially to the
success of the new 480 Hp model, in spite of the effect
induced by the expectation for the new Stralis heavy
vehicle that was launched on the market early in 2002.
Iveco sales in Eastern Europe exceeded 9,700 units,
14% up on 2000 (8,500 units). Results were
particularly good in Romania, where sales increased by
7.9% on 2000 to 1,964 units, allowing Iveco to achieve
a market share of 34.3%.
In non-European markets, Iveco sold a total of 22,300
vehicles, down 12% from the 25,400 units sold in 2000.
In particular we should mention the good sales results
in Latin America, where Iveco passed the 7,800 mark
with its overall range, a 26% increase on 2000 (6,200
units). Light vehicle sales were particularly good in
Brazil (3,258 units compared to 2,818 in 2000), where
the Iveco Daily accounted for 25.5% of the market (up
3.8 percentage points on 2000). Sales also increased in
Venezuela (up 25% to 1,801 vehicles). This was offset
by a significant slowdown in sales in Argentina because
of the economic crisis besetting the country: in a
market which plummeted by more than 50%, Iveco
managed to curb the fall in sales to 30% (1,430 vehicles
registered in 2001 compared to 2,060 in 2000).
In China, the Naveco company, a 50-50 joint-venture
A C T I V I T I E S O F T H E I V E C O G R O U P I N 2 0 0 1 9
with the Yuejin group, manufactured and sold about
13,100 vehicles (17,500 vehicles in 2000). This 25%
reduction can be attributed primarily to fiercer local
competition, and to expectation prior to the launch of
a new light vehicle.
The Irisbus joint-venture sold about 9,500 units (9,800
in 2000).The modest 3% decrease in sales on 2000 was
due in part to delays in the awarding of public
transport tenders, particularly in Italy and Spain.
Diesel engine output in 2001 totalled 413,300 units,
down about 9% on 2000 (458,000 units).This decrease
is related to output of light and medium duty engines,
to a decrease in vehicle output by Iveco, and above all
to a drop in sales to third parties. During the year,
production of the new Tector engine for applications
on EuroCargo vehicles came on stream, and the range
of heavy Cursor engines was also completed. Sales to
external customers accounted for 61% of total
production, in line with the previous year.
Where India and Turkey are concerned, sales by
licensed affiliates decreased, reflecting demand trends
for commercial vehicles in the two countries:
- in India, Iveco manufactured and sold a total of
30,700 units through Ashok Leyland (in which it has a
15.28% share), approximately 3,800 less than the
previous year, because of the general economic
slowdown in the country, and the company's market
share decreased marginally;
- in Turkey, Otoyol (owned 27%) sold approximately
3,600 units, approximately half the sales in the previous
year, because of the marked contraction in the
domestic market.
The finance companies in the Transolver Finance
group, which manage financing and leasing activities for
Iveco products, expanded strongly in 2001.
The portfolio of vehicles financed grew during the year
from 85,000 to 99,000 units, with total loans of
approximately Euro 2,100 million granted.
Growth was particularly strong in Italy, Germany and
the United Kingdom. The percentage of Iveco vehicle
sales financed by Transolver Finance in Western Europe
increased to 29.8% (30.3% for light vehicles, 23.3% for
medium vehicles and 34.4% for heavy vehicles).
During the year, new finance companies were launched
10 R E P O R T O N O P E R A T I O N S
and operated successfully in the United Kingdom,
Switzerland and Brazil, joining the companies already
operating in four major Iveco markets (Italy, France,
Germany and Spain).
In the field of contract hire activities conducted by the
Fraikin and Transolver Service companies, the rental
vehicle fleet increased to 37,000 vehicles at year end
(up 9.7% on 2000). During the year there was a
marked growth of business in France (an increase of
1,100 units, or 4%) and in the United Kingdom (an
increase of 982 vehicles, or 23%), following the
integration of the fleets of large customers, as well as
a significant increase in Spain (825 units, an increase of
more than 50%), the result of the strong development
of long-term contract hires.
During 2001, the Fraikin group acquired 9,993 new
vehicles, while it sold 6,701.
The process to integrate the activities of the Fraikin
group with those of Iveco continued successfully; the
company confirmed its position as undisputed leader
of the French market, with unique expertise in the
field of long-term commercial vehicle contract hires
and the management of large fleets.
In 2001, Iveco also continued to develop its range of
maintenance and repair services: the portfolio of these
activities totalled 33,800 contracts at year-end, with
11,900 new contracts stipulated during the year.
Innovation and product development activities focused
primarily on the repowering of the medium range of
vehicles EuroCargo Tector and the development of the
new range of V-shaped engines for application in the
fields of power generation and rolling stock.
The investment programme to support the engine
development plan progressed in 2001; it regarded the new
families of light and medium diesel engines in particular,
the plant for light and medium duty crankshafts, and the
new cab for the new Stralis heavy vehicle.
Irisbus continued to invest in product innovation, focusing
in particular on the definition of a new mass transport
vehicle, the Civis, with electric or hybrid drive.
At the end of the year, an agreement was signed with
Renault to purchase the remaining 50% of the Irisbus
group; the operation will be completed in 2002 and
will give Iveco total control of the company.
A C T I V I T I E S O F T H E I V E C O G R O U P I N 2 0 0 1 11
Market Change2001 vs 2000
(thousands) (%)
By quarter
1st 181.0 3.3
2nd 183.5 2.7
3rd 163.1 0.7
4th 155.1 -6.6
682.7 0.1
By Business Unit
>=16.0 t GVW (heavy) 236.3 -3.1
6.1 to 15.9 t (medium) 87.4 -5.5
3.5 to 6.0 t (light) 359.0 4.0
682.7 0.1
By country
France 123.1 5.2
Germany 140.4 -6.7
UK 118.6 4.5
Italy 94.5 -0.3
Spain 72.8 0.6
Other European countries 133.2 -0.3
682.7 0.1
WESTERN EUROPE 2001DEMAND FOR COMMERCIAL VEHICLES (GVW >=3.5T)
WESTERN EUROPE 2001IVECO: REGISTRATIONS AND MARKET SHARES (GVW >= 3.5 T)
Iveco registrations Iveco shareUnits Change Value Change
(thousands) vs 2000 (%) (%) vs 2000 (%)
By quarter
1st 29.9 -6.7 16.5 -1.8
2nd 30.2 -1.1 16.5 -0.6
3rd 28.6 1.0 17.5 0.0
4th 27.4 -9.1 17.7 -0.5
116.2 -4.1 17.0 -0.8
By Business Unit
>=16.0 t GVW (heavy) 26.1 -4.6 11.0 -0.2
6.1 to 15.9t (medium) 21.9 -1.5 25.0 1.0
3.5 a 6.0t (light) 68.2 -4.7 19.0 -1.7
116.2 -4.1 17.0 -0.8
By country
France 22.9 1.6 18.6 -0.7
Germany 13.7 -17.3 9.8 -1.2
UK 14.1 6.1 11.9 0.2
Italy 37.8 -6.0 40.0 -2.4
Spain 14.6 -1.5 20.0 -0.4
Other European countries 13.1 -4.5 9.8 -0.5
116.2 -4.1 17.0 -0.8
Capital spending by Iveco during the year amounted to
approximately Euro 718 million (Euro 656 million in
2000). One area of significant investment was the
development of the contract hire for which Euro 348
million were earmarked (Euro 306 million in 2000),
approximately Euro 302 million of which (Euro 277
million in 2000) was invested in the fleet by the Fraikin
Group.
During the year an agreement was signed with the
Chinese group CBC for the creation of a new joint-
venture (to be 50-50 by the end of 2003), for the
manufacture and marketing of town and out-of-town
buses.
CBC is one of the leading manufacturers of passenger
transport vehicles in China, and leader in the urban
transport field.
12
BUSINESS UNIT LIGHT
R E P O R T O N O P E R A T I O N S
In 2001, first rate performances in terms
of sales enabled theDaily City Truck
to confirm its success in Western Europe.
In 2001, the European light commercial vehicle market
continued to expand satisfactorily, in spite of the
weaker economic climate.
In Western Europe the 2.8 to 6 tonne GVW segment
continued to grow, reaching a total of 666,000
registrations, a 2.6% increase on 2000.
The strongest growth was recorded in France, the United
Kingdom and Germany, which increased by 6.3%, 5.9%
and 4.3% respectively on the previous year. Market
growth was strongest in the 3.5 tonne GVW segment,
which recorded over 325,800 registrations (a 4.3%
increase on 2000); this performance confirmed that the
segment has overtaken the Light Commercial segment
(2.8 to 3.49 tonnes GVW), historically the largest.
In this context, Iveco's sales performance showed an
improvement on the previous year: approximately
78,300 vehicles were sold in Western Europe (77,800
in 2000), and 105,000 throughout the world (over
90,000 in 2000).
These results enabled the Daily City Truck to maintain
its joint lead (with the Mercedes Sprinter) of the 3.5
tonne GVW segment of the Western European market
with 18.9%, in spite of fierce competition from other
brands which launched aggressive commercial
initiatives, particularly in the final part of the year.
One outcome of this trend are the good results
achieved in Italy, France and Spain, where Iveco took
37.2%, 24.7% and 20.5% of the market respectively.
Its performance on the British and Portuguese markets
is also worthy of note because of the ground gained:
market share increased by 2.4% and 1.3% to 8.2% and
13% respectively.
Outside Western Europe, we should underline the
excellent market results achieved in Central and
B U S I N E S S U N I T L I G H T 13
WESTERN EUROPE2001 REGISTRATIONS IN ABC CURVE ON MARKET UNITSFROM 3.5 TO 6.0 T GVW (LIGHT)
Units Change Units Change Value Change(thousands) vs 2000 % (thousands) vs 2000 % (%) vs 2000 %
UK 67.0 7.4 6.2 19.4 9.2 0.9
Germany 60.7 2.2 5.7 -28.7 9.4 -4.1
France 66.2 10,9 16.4 4.4 24.8 -1.5
Italy 59.6 0,3 23.1 -6.3 38.8 -2.7
Spain 39.4 -1.8 7.9 -7.3 19.9 -1.2
Portugal 14.8 -2.8 2.1 22.2 14.1 2.9
Holland 9.8 -1.5 1.6 -18.8 16.1 -3.4
Belgium 10.4 13.4 1.0 -9.3 10.0 -2.5
Switzerland 8.2 10.4 1.9 -9.3 23.5 -5.1
Ireland 5.9 9.9 0.3 150.8 5.5 3.1
Austria 5.0 -6.2 0.8 -16.4 15.8 -1.9
Sweden 4.6 11.2 0.4 -15.2 7.6 -2.4
Denmark 2.3 -17.3 0.5 -27.3 20.8 -2.8
Finland 2.4 1.3 0.1 -37.7 4.0 -2.5
Norway 1.8 0.7 0.3 -19.9 15.7 -4.1
Luxembourg 1.0 22.5 0.1 45.2 6.4 1.0
Total 359.0 4.0 68.2 -4.7 19.0 -1.7
WESTERN EUROPEIVECO MARKET SHAREFROM 3.5 TO 6.0 T GVW (LIGHT)
97 98 99 00 01
24
18
12
6
0
Iveco shareMarket Iveco registrations
Eastern European countries, and in countries in the
Mediterranean basin, where sales increased by about
29%. In the segment for vehicles with GVW from 3.5
to 6 tonnes, we should underline the success obtained
in Romania and the Slovak Republic, where the Daily is
now absolute market leader, with 42% and 35% of the
respective markets.
Iveco's globalisation process, and more specifically its
manufacturing and marketing activities in South America,
achieved excellent results in 2001; market share was
boosted in the 3.5 to 6 tonne GVW segment in Brazil,
where the Daily leads the market with 33.2% (little more
than a year after the inauguration of the Brazilian plant of
Sete Lagoas), in Argentina, with 21.4%, and in Venezuela,
where it achieved 17.7%.
Product development activities in 2001 regarded the
market launch of the new 65C15 and the new version
of the Vendor, which extended the range.
14 R E P O R T O N O P E R A T I O N S
BUSINESS UNIT MEDIUM
The new EuroCargo Tector
range was gradually distributed on all
European markets in the course of 2001
and obtained highlyfavourable comment
from specialised pressand Iveco
customers alike.
Demand for commercial vehicles in the 6 to 16 tonne
GVW segment weakened in 2001, after reaching an all-
time high in 2000.
Competition on the market was heightened by the
introduction of a number of new models by other
manufacturers, but also by action taken by
manufacturers to comply with the acoustic and gassy
emissions standards that were enforced during the year.
In Western Europe, the market accounted for 87,400
vehicles, a 5.5% decrease on 2000.The most significant
variations were recorded on the German market,
where registrations were 5,000 lower than the
previous year (-14.5%).The Spanish, French and British
markets went against the trend, growing by 7.9%, 5.8%
and 0.6% respectively.
In this market context, Iveco succeeded in raising its
Western European market share to 25% (up 1% on
2000), maintaining its position of leader in Italy, Spain
and the United Kingdom. Iveco also recorded brilliant
results in the markets of Central and Eastern Europe,
taking the lead in Hungary, Romania and Slovenia.
Invoicing for the EuroCargo line was buoyant in 2001.
In general, and including Western and Central Europe and
the other business areas, a total of 28,330 units were
invoiced, a marginal fall from 2000 levels (28,814 units).
2001 was a very demanding year for the Business Unit,
particularly because of the normalisation of
manufacturing and logistic processes after the floods
that devastated Northern Italy in the Autumn of 2000,
and of the restructuring of the Brescia plant, which was
completed as part of the gradual phasing out of the
EuroCargo (to Euro2 standards) in favour of the new
Units Change Units Change Value Change(thousands) vs 2000 % (thousands) vs 2000 % (%) vs 2000 %
Germany 29.7 -14.5 5.3 -8.6 17.8 1.1
UK 18.7 0.6 5.5 4.7 29.3 1.2
France 10.8 5.8 2.6 3.8 23.6 -0.5
Italy 9.0 -4.4 5.1 -5.3 56.8 -0.5
Spain 7.1 7.9 1.9 12.9 26.4 1.2
Holland 2.2 -6.6 0.3 -24.5 11.4 -2.7
Portugal 1.8 -17.7 0.2 -7.1 12.2 1.4
Belgium 2.3 5.7 0.3 12.9 11.7 0.8
Austria 1.0 -19.9 0.1 -38.8 12.3 -3.8
Ireland 0.9 -26.7 0.2 -16.3 18.9 2.4
Norway 0.7 -14.2 0.1 2.7 15.5 2.6
Switzerland 0.9 6.9 0.1 -24.0 10.5 -4.3
Sweden 0.9 10.4 0.1 50.8 10.5 2.8
Denmark 0.6 7.0 0.1 39.8 24.3 5.7
Finland 0.6 3.9 0.1 35.1 8.9 2.0
Luxembourg 0.2 0.7 0.0 51.7 29.1 9.8
Total 87.4 -5.5 21.9 -1.5 25.0 1.0
B U S I N E S S U N I T M E D I U M 15
WESTERN EUROPE2001 REGISTRATIONS IN ABC CURVE ON MARKET UNITSFROM 6.1 TO 15.9 T GVW (MEDIUM)
WESTERN EUROPEIVECO MARKET SHAREFROM 6.1 TO 15.9 T GVW (MEDIUM)
97 98 99 00 01
32
24
16
8
0
Market Iveco registrations Iveco share
EuroCargo Tector, which respects the dictates of Euro
3 standards.
Iveco was able to meet its obligations related to this
legislation, guaranteeing suitable delivery levels to its
dealer network and its customers.
Distribution of the new EuroCargo Tector range was
gradually extended to all European markets during
2001, with extremely favourable reactions from both
the specialist press and our customers. The technical
features and performance of the new family of Tector
engines in particular were received enthusiastically, and
there are grounds for considering this result an
important starting point on which to build continued
success and to achieve new market share.
16
BUSINESS UNIT HEAVY
R E P O R T O N O P E R A T I O N S
During the year,recognition by
the Network and byour customers of the quality level
attained by Iveco'sheavy duty range
was reinforced.
In 2001, the Western European heavy vehicle market
contracted by 3% compared to 2000, with 236,335 vehicle
registrations.This still represents an excellent result, if we
remember that 2000 reached an all-time high with
243,920 registrations.Trends differed from one market to
another.The sharpest contraction was in Germany (11.3%
compared to 2000), while the other major markets were
relatively stable: registrations were unchanged in Italy,
there was a slight fall in France (-2.1%) and Benelux
(1.8%), and an increase in Spain (+2.5%) and the United
Kingdom (+1.3%).
The fall in registrations was particularly strong in the
last quarter and this leads us to expect that the
negative trend will continue into 2002.
The competitive pressure on selling prices that we had
already noted in 2000 was even stronger in 2001,
especially in the markets where registrations
contracted. This was also the result of the fierce
competitiveness in the transport sector, which forces
customers to try to achieve efficiency upstream of the
process, in other words when they buy their vehicles.
The high renewal rates of the vehicle fleet seen in
recent years also continue to exert considerable
pressure on prices of second-hand vehicles, the supply
of which exceeds the absorption capacity of the
European market.
In this market scenario, Iveco held its market share in
Western Europe stable at 11%. The result achieved in
Germany was particularly satisfactory, and market share
increased in spite of fierce competitive pressure, and
continues to grow. Good results were also achieved on
the Spanish market, where our market share bucked the
trend, increasing by 0.3 points to 18.4%.
In general, and in Italy in particular, the monthly market
share improved in the last quarter of 2001, when the
share was on the upswing and actually above that of
2000. The launch of a powerful product and the
normalisation of output after the floods late in 2000
Units Change Units Change Value Change(thousands) vs 2000 % (thousands) vs 2000 % (%) vs 2000 %
Germany 50.0 -11.3 2.7 -2.4 5.5 0.5
France 46.2 -2.1 3.9 -9.9 8.5 -0.8
UK 32.9 1.3 2.5 -15.0 7.5 -1.5
Italy 26.0 -0.1 9.6 -5.9 36.9 -2.3
Spain 26.3 2.5 4.8 4.0 18.4 0.3
Holland 13.7 -2.6 0.3 -15.5 2.2 -0.3
Belgium 8.7 1.7 0.3 -9.3 3.6 -0.4
Austria 7.0 -6.2 0.3 -28.9 4.8 -1.5
Portugal 4.5 -7.8 0.4 16.8 8.4 1.8
Sweden 4.3 -9.0 0.0 -72.0 0.2 -0.3
Denmark 3.8 -1.4 0.3 -3.9 7.7 -0.2
Switzerland 4.4 32.4 0.5 149.5 11.5 5.4
Ireland 2.8 -11.6 0.2 13.3 7.8 1.7
Norway 2.3 -7.5 0.0 20.0 1.6 0.4
Finland 2.4 -1.7 0.1 -5.7 3.4 -0.2
Luxembourg 1.1 -17.2 0.0 -46.6 4.3 -2.4
Total 236.3 -3.1 26.1 -4.6 11.0 -0.2
B U S I N E S S U N I T H E A V Y 17
WESTERN EUROPE2001 REGISTRATIONS IN ABC CURVE ON MARKET UNITS>= 16.0 T GVW (HEAVY)
WESTERN EUROPEIVECO MARKET SHARE>= 16.0 T GVW (HEAVY)
97 98 99 00 01
16
12
8
4
0
Market Iveco registrations Iveco share
both contributed to this improvement, particularly in
the Italian and Spanish markets, which are traditionally
interested in this segment of the range.
The Eastern European markets continued to grow,
except for Poland. The volumes sold by Iveco were
good, especially in the markets of the former USSR,
with strong growth in Lithuania, and noteworthy sales
in Romania, Bulgaria and the Slovak Republic. Iveco's
share of the Polish market remained stable.
Sales of heavy Iveco vehicles in the Middle East and
Africa were very satisfactory, increasing by 36% overall
on 2000. In the Middle East, performance was
particularly good in Saudi Arabia, but volumes increased
significantly in many African markets too. Recognition of
the quality level attained by Iveco heavy range vehicles
gained ground during the year. Both the Network and our
customers acclaimed their superb working efficiency
considered to be on a par with the very best competition
in terms of fuel consumption and, more generally, in terms
of productivity.Where product innovation is concerned,
the most important event in the first half was the
introduction of the new Cursor 13 engine on the heavy
road range, which means that the entire European on-
road and construction site range is now equipped with
the Cursor engine. This product, which forms part of
the high power output (480 Hp) segment, generated a
significant increase in orders from this demand area as
reflected in the share recorded in the second part of
2001, as mentioned earlier.
All the activities for the launch of the new Stralis
vehicle were concentrated in the second half of the
year: the completion of the technical definition, the
start of mass production at the end of October, pre-
sale initiatives for large customers, and preparation of
the market launch envisaged for early 2002.
During the start-up phase and timing decisions great
care was dedicated to product quality; only after a fleet
of 25 vehicles dedicated to the field test had covered a
total of more than 5 million kilometres and only after
the defects found during the test had been eliminated,
was it decided to hold the market launch at the end of
January 2002.
The pre-sale activities for large customers marked a
new departure from traditional market launches; the
marketing and product personnel put a great deal of
commitment into the organisation of special meetings
with each potential customer. This made it possible to
spread awareness of the new product even before the
official launch, and above all to collect a large number
of orders. By the official launch at the end of January,
contracts for about 2000 vehicles had already been
stipulated, representing almost one quarter of the
expected total annual volumes.
Good foundations were therefore laid for 2002, and
Iveco heavy vehicles have what it takes to be
competitive in all segments of the market in terms of
performance and quality, in spite of the expected
downturn in demand in Europe.
18
The slowdown of the economy in Western
countries in 2001 also had a negative effect on
the diesel engine market, particularly as regards
products destined to goods transport,
construction machinery and energy generation.
In spite of the resulting slowdown in its growth
trend, in 2001 the Business Unit Engines managed
to limit the effects of the fal l in volumes,
defending its manufacturing levels and its sales.
During the year, 413,200 new engines were built
(416,500 sold), a 9% reduction on the previous
year, while sales of Euro 1,630 million were
recorded, 1.8% up on the Euro 1,600 million
recorded in 2000.
39% of the units sold met Iveco's requirements
for its own vehicle output (38% in 2000); 35%
(33% in 2000) was supplied to other Fiat Group
companies (CNH, Hitachi, Sevel), and the
remaining 26% (29% in 2000) went to external
customers.
If we consider the various areas of application,
the automotive sector sold 333,000 units
(367,000 in 2001); this 9% reduction is
attributable primarily to the widespread fall in
BUSINESS UNIT ENGINES
R E P O R T O N O P E R A T I O N S
The NEF plant in Turin where
the 4- and 6-cylinderTector engine is produced.
B U S I N E S S U N I T E N G I N E S 19
demand for commercial vehicles, and was offset
by the more favourable product mix, which made
it possible to increase the value of sales.
In the power generation sector, 16,500 units
were sold (19,500 in 2000), a drop of 15% in
volume; this sector was conditioned by the
slowdown in demand for power generator units,
which began at the end of 2000, after years of
uninterrupted growth.
The fall in the agricultural mechanisation and
building sector was more limited, and 67,000
units were sold (approximately 70,000 in 2000)
with a 4% contraction.
The most significant events in the manufacturing
sector during the year, were:
- production of the 3,500,000th 8140 engine in
the Foggia plant.
This milestone crowned over twenty years of
success for this engine, which is now
manufactured not only in Italy, but also in China
and Brazil. The quality and performance of the
engine continue to drive the Iveco Daily, Fiat
Ducato and Renault light commercial vehicles;
- the radical transformation and extension of the
Foggia plant to produce the new F1 range of light
engines and the crankshafts for all Iveco's light
and medium duty Diesel engines;
- the start of construction of the new 2H Energy
plant in Fecamp (France) to assemble electric and
cogeneration units, with rated power outputs
above 500 KVA; the new plant will be operative
before the end of 2002.
Where product development is concerned, in
2001 manufacture of the following new engine
models got underway:
The light F1A engine (2.3 l itres and 110 Hp),
which wil l gradual ly be introduced on Fiat
Ducato and Iveco Dai ly l ight commercia l
vehicles during 2002;
The Cursor 13 (12.9 litres and 540 Hp) which
completes the new range of engines for heavy
Cursor applications, gradually introduced over
the previous three years; this new engine is now
being fitted on the Iveco heavy Stralis vehicle;
The new "Horizontal" version of the Cursor 8
engine (from 245 to 352 Hp) to power Irisbus
low-floor buses;
Industrial versions of the Cursor 8, 10 and 13
(from 330 to 480 Hp) to power CNH combine
harvesters and forage harvesting equipment.
Strategies to develop engine business resulted in
the signature of a contract to supply 336 20-litre,
760 Hp V8 engines to Ansaldo Breda.
These engines, complete with transmission,
cooling system and electric generator for
onboard auxiliary equipment, will equip 83 trains
to be supplied to the Danish Railways from 2003.
International developments by the Business Unit
Engines included the consolidation of industrial
ventures in Brazil to manufacture the 8140 engine
for the Fiat Ducato and Iveco Daily light vehicles
(approximately 10,000 units manufactured in
2001), and in India to build 8000 series engines
for CNH India.
The engine range
wil l be further
e x t e n d e d a n d
revamped during
2002. Work wil l
begin on new models
i n c l u d i n g :
- 3, 4, and 6 cylinder
engines, from 50 to
220 Hp for CNH
agricultural and
construction
machinery;
- the Cursor 8
engine for port
applications with
500 Hp maximum
power output;
- the 760 Hp V8
engine for ra i l
The Foggia enginesplant: manufacture of the 3,500,000thengine of the 8140series confirms themore than twentyyears of success of this engine.
ACTIVITIES OF THE DIVISIONS
20 R E P O R T O N O P E R A T I O N S
UNITS SOLD(%)
41%
20%
39%
Iveco
Fiat Group
Third Parties
ENGINE APPLICATIONS(%)
79.9%
11.6%
3.9%0.4%Automotive
Agricolture andConstructionEquipment
Industrial
Power Generation
Marine
4%
Irisbus
In a Western European market that accounted for
approximately 22,500 sales in 2001, Irisbus, the joint
venture created by Iveco and Renault, maintained second
place among bus makers, with 26.7% of the market.
Specifically, it consolidated its leadership in the French
market with 51.6%, and in the Italian and Spanish markets
where it achieved 45.1% and 26.2% respectively.
In 2001 Irisbus sold 9,517 vehicles; of these, 4,025
were long distance coaches, 3,923 town buses, and
1,569 minibuses and derived versions.
On the marketing front, Irisbus received important
orders during the year, winning public tenders for the
supply of town buses to the cities of Rome, Milan,
Turin, Madrid, Paris, Lille and Grenoble. It also won an
important tender to supply 300 methane driven buses
to the city of Athens, in preparation for the Olympic
games. The city of Lyons ordered the new Cristalis,
while the cities of Clermont Ferrand, Rouen and Las
Vegas chose the new Civis urban transport system.
The success of the EuroRider, MyWay, EuroClass,
Recreo, Iliade and Ares ranges in the long distance
coach market continued, the latter now also available
in a 15 metre version.
Activities linked to the development of new
maintenance and repair contracts were pursued in all
European markets. Measures to integrate the two
product ranges, from the design of new vehicles to
product quality, were intense, as were activities linked
to the application of the new Euro3 approved engines.
Important capital spending programmes got underway
regarding the implementation of the Civis project, an
innovative mass urban transport vehicle with
conventional, electric and hybrid drive, featuring low
emissions, excellent access, interior mobility, quiet
operation and outstanding comfort.
In January 2002, as established by the agreements
signed at the end of 2001 with Renault, Iveco acquired
propulsion and power generation. These are
extremely important models which will extend
the Iveco product range , increasing its
competit iveness and opportunit ies for
penetration in the free market and to non-Fiat
original equipment manufacturers.
21S P E C I A L T I E S
The new Civis transport system has been chosen bythe cities of Clermont Ferrand,Roven and Las Vegas.
a further 15% share in the company, thus gaining
control of Irisbus with 65% of the share capital.
Defence vehicles
In 2001, a total of 1,665 vehicles were manufactured
for the Italian Army and the export market, including:
569 model 40.10 WM, 28 model 90.17 WM and other
special vehicles, spare parts and various industrial
components.
The new generation tactical trucks designed to meet the
latest operational requirements of the armed forces, have
progressed from the study stage to the prototype stage.
Prototypes of the Light Multirole vehicle (LMV) are
currently being tested and evaluated by a number of
armies, including the Italian Army, while the Medium
Multirole vehicle (MMV) is undergoing homologation.
Production of the above vehicles is expected to start
next year, on the basis of contract deadlines.
During 2001, maintenance and repair activities were
performed for a significant portion of the Italian
Army's fleet of trucks.
Deliveries of the heavy and light armoured vehicles
manufactured by the Iveco Fiat – Oto Melara
Consortium under ongoing contracts continued
regularly: 33 Ariete tanks were invoiced to the Italian
Army out of a contract for 200 units, to be joined by a
further 12 units in 2002, and the final 15 Centauro
vehicles of a contract for 22 units were delivered to
the Spanish Army.
The industrialisation projects begun in 2000 were
completed and the assembly line for another two long-
term contracts for the Italian Army also got underway:
22 R E P O R T O N O P E R A T I O N S
In the course of 2001,Eurofire confirmed its
position as leadingmanufacturer of
fire-fighting vehicles in Europe and a world
leader for ladders.
the Puma light armoured vehicle (560 units, 180 of
which of the 4x4 version and 380 of the 6x6 version),
and the Dardo crawler troop carrier and fighter
vehicle (total of 200 units).
After homologation of the pre-production runs, both
products will progress to mass production during
2002.
In the field of light and heavy armoured vehicles, we
should mention the acquisition of an important second
contract with the Spanish army for the supply of a
further 62 Centauro vehicles to Spain, confirming the
customer's satisfaction with this product.
The U.S. Army has asked for the operational tests in
Washington State of 16 Centauro armoured vehicles
lent by the Italian Army to be extended from 2 to 3
years; at the same time the Iveco Fiat – Oto Melara
Consortium extended its global service contract to
maintain the efficiency of this fleet of armoured vehicles.
The order book of the Defence Vehicles Division
guaranteed work for the next 4 years, particularly in
the area of light and heavy armoured vehicles and
related parts.
Astra
Astra production is divided into three product lines:
heavy quarry and construction site vehicles, high
mobility heavy tactical military vehicles, and dump
trucks (12, 28 and 40 tonne rigids and 25 and 30 tonne
articulated vehicles).
2001 was a year of consolidation and development for
the division, with the launch of new products such as
the new Dumper range with Euro 3 engines.
A total of 1,602 vehicles were invoiced in 2001 (1,870
in 2000, a 14.3% decrease), and sales totalled Euro 187
S P E C I A L T I E S 23
million (Euro 214 million in 2000).
This contraction was due primarily to the lower sales
of military vehicles and the slowdown in demand for
articulated dump trucks from the U.S. market.
Astra maintained its share of the Italian market for
heavy construction vehicles at 17%, while exports
accounted for approximately 21% of sales,
consolidating the growth in exports in recent years. In
2001, the production of articulated dump trucks begun
in 2000 progressed successfully with the sale of 107
vehicles, 75 of which were distributed through the
Case New Holland international network.
The company's strongpoint continues to be the quality
and reliability of its products and its ability to meet
customers' requirements, with regard to both the
HD7/c civilian line and the SM military range
(marketed in 4x4, 6x6 and 8x8 versions).
Where the latter was concerned, a total of 85 vehicles
was successfully exported through the Iveco Defence
Division to the Spanish and Irish armies.
Manufacture of the new HD7/c civilian range was
begun in 2001; the vehicles are powered by the new
Iveco Cursor engines which meet Euro 3 emissions
standards, and they feature significantly higher
technological performance levels which the market has
clearly appreciated.
In December the company's fibreglass cab production
was outsourced to a technological partner, a leader in
the plastic processing field, to allow the company to
focus more consistently on its core business.
Fire-fighting vehicles
The Iveco Eurofire company heads up all Iveco's
production and marketing activities in the fire-fighting
field. In 2001 Eurofire confirmed its position as leader of
the European fire-fighting market and world leader of
the ladder market. Four companies co-exist in the
Eurofire group, all renowned for their top performance
and long, successful manufacturing tradition:
- Iveco Magirus Brandschutztechnik GmbH (Germany)
- Camiva SA (France)
- Iveco Mezzi Speciali (Italy)
- Lohr Magirus (Austria)
In 2001, sales totalled Euro 208.1 million, a 6% increase
on the previous year. A total of 1,235 units were sold,
including outfitted vehicles and outfits.
Orders received by all the sub-segments reflected a
consistent 20% increase on the previous year, to
underline the progress made by the Eurofire group in
the international fire-fighting market.
Significant projects and orders, particularly from the
export markets, reflect the growth of the export
sector which accounted for 50% of the total volumes
invoiced.
Renault VI's withdrawal from Eurofire made it possible
to speed up the process of integration, and the
achievement of structural synergies and efficiencies.
Particular importance was attributed to the
exploitation of potential synergies between design,
purchasing and manufacturing activities, to generate
greater efficiency, designed to reduce product costs
and speed up the definition of product development
programmes.
The start of industrialisation of the new range of
automatic ladders and pumps for fire-fighting applications,
both contributed to the achievement of ambitious cost
cutting targets.
Product development activities focused on the
completion of the airport range with new versions of
the Dragon range and the extension of the 6x6 Impact
range.
A special fire-fighting vehicle designed specifically for
tunnel rescues was studied using the most innovative
technologies.
The introduction of Euro 3 engines on the Iveco Chassis
range was studied as part of the general cost reduction
programme as a means of maximising efficiency.
For 2002, a significant level of orders is expected as
well as a significant growth in sales and good
profitability from sales.
24
Iveco's globalisation strategy is concentrated primarily in
four areas with a high growth potential: the Mercosur area,
China,Turkey and India. Some of these areas, such as China
and the Mercosur area, are already very important
markets, where Iveco has undertaken significant
investments, directly or through joint-ventures.
Brazil
In 2001, the Brazilian economy, which began the 1st quarter
with great optimism, became significantly weaker in the two
central quarters, affected by the worsening crisis in Argentina,
electricity rationing, and the slowdown of the world economy.
In spite of the negative influence of events abroad, GDP grew
by 1.5% in 2001. The surplus of US$ 2.6 billion and direct
investments worth US$ 23 billion made it possible to stabilise
the rate of the Real against the Dollar and to improve the
country's risk rate. The austerity applied to management of
public sector accounts also enabled the country to meet the
targets agreed with the IMF for 2001. Inflation stood at 7.7%,
marginally above the target of 6% set by the Government. In
the last part of the year economic activities began to recover
and this trend seems to be confirmed in 2002: a slowdown of
inflation, forecast at 5.5%, GDP growth of approximately 3%,
the suspension of electricity rationing, a reduction in interest
rates, better exploitation of installed industrial capacity, a
record harvest and a further improvement in public finances
(in line with the agreements with the IMF). In 2001 the
commercial vehicle market in Brazil maintained its positive
trend (4.2% the light range and 1.9% the heavy range), while
total volumes stabilised at 73,000 vehicle registrations.
In this context Iveco sold over 4,600 vehicles (15.2% up on
2000), with a significant improvement in the Daily range, built
in Sete Lagoas, 3,200 of which were sold (+15.6%),
consolidating its position as new leader in the 3.5 to 6 tonnes
GVW segment.
Argentina
In 2001, the Argentine economy recorded a strong
recession for the third consecutive year. GDP contracted
by 4% and the situation is expected to worsen in 2002.
The economic and financial crisis exploded at the end of
the year with the collapse of the Government, the formal
declaration of default on its foreign debt and the
substantial devaluation of the Peso by about 100%.
The Argentine commercial vehicle market continued to
feel the effects of the country's difficult economic
situation, and registrations in 2001 totalled 8,500 units,
50.6% down on the previous year (in December alone it
recorded a fall of over 80%). Iveco sales totalled 1,160
units (down 45.8%), while market share increased for all
the ranges, from 11.9% in 2000 to 16.8% in 2001.We must
underline the performance of the Daily range, which
climbed from 14% in 2000 to 21.4% in 2001.
Venezuela
In Venezuela, 2001 was, like 2000, a good year in terms of
economic growth, which increased by 2.7%. Carefully
controlled devaluation (approximately -9% against the U.S.
Dollar) and falling inflation (12.3% compared to 13.4% in
2000), helped to create a positive economic environment. In a
strongly growing market (+31.5% for a total of 9,600 units)
Iveco sold 1,800 vehicles, a 34% increase on 2000, for 18.7% of
the market (18.4% in 2000).To this we must add 240 vehicles
sold to countries in Central America and the Caribbean.
Turkey
The Turkish economy in 2001 suffered its worst crisis of
the last twenty years brought on by an 8% decline in Gross
National Product, devaluation of the local currency by
105% against the Euro, and inflation of 70%. In spite of this,
the International Monetary Fund, the World Bank and the
European Union showed their faith in the country with a
massive loan plan, linked to a series of structural reforms
which are now being implemented. The market for light
commercial vehicles with GVW above 3.5 tonnes
contracted in 2001 to 25,000 units, and the partners in the
Otoyol joint venture increased their market share to 9.7%,
selling 2,425 vehicles, 343 of which were imported. Exports
sales were buoyant, totalling 1,421 units. In 2001, Iveco
Otomotiv Ticaret A.S., a full-range dealership owned entirely
by Iveco, and a centre of excellence for technical service to
heavy vehicles, began operations.
China
Chinese Gross Domestic Product expanded in 2001 by
over 7% which, although marginally lower than in 2000, was
still one of the best performances in Asia, in line with the
average growth rate of recent years. This growth was
substantially sustained by the continuous flow of direct
foreign investments and by the Government's commitment
OPERATIONS IN THE STRATEGIC AREAS
R E P O R T O N O P E R A T I O N S
O P E R A T I O N S I N T H E S T R A T E G I C A R E A S 25
to invest in infrastructure. At the end of 2001 China finally
entered the WTO, and succeeded in its bid for the Olympic
Games of 2008. The country confirmed its substantial
solidity in the face of the economic troubles hindering the
development of other countries in the area. The
automotive market confirmed its growth of previous years,
and expanded by over 13 percentage points to 2,363,665
units. The commercial vehicle market expanded by more
than 5 points to 818,500 units.The heavy industrial vehicle
segment accounted for much of this growth, totalling
147,000 units and increasing by over 75 points on 2000;
this impressive market growth was sustained by the
expansion of demand in the sector of heavy transport and
public works. Medium duty vehicles, on the other hand,
remained stable at the previous year's levels (162,750
units), while the market for light vehicles contracted
marginally, primarily as a result of the fall in the demand for
vehicles in rural areas. The bus market grew by over 17%
to about 824,000 units. The best performance was in the
large bus (11,400 units, +48%) and medium bus (47,900
units, +34%) segments. In the light bus segment, where
Naveco (the 50-50 joint venture between Iveco and the
Yuejin Group) operates, the market grew by over 11%,
accounting for 276,000 vehicles. Sales by Naveco were
13,511 units (including 2,200 chassis cabs and vans), which
represents a downturn on the previous year, due to
increasingly aggressive competition both in terms of new
products and of cost cutting. The passenger transport
sector is also favouring larger vehicles (30 seats) than
those in the Daily range. CBC-Iveco, a new joint venture
set up in China in May 2001 (25.2% Iveco and 74.8% CBC
Group at the end of 2001), has sold 3,560 units since its
creation (2,833 complete buses and 727 CKD chassis kits),
with sales totalling Reinmimbi 645 million from May to
December. CBC-Iveco operates in the medium (7 to 10
metres) and large (over 10 metres) bus segments, and
market demand for town and out-of-town vehicles in
China in 2001 totalled 59,000 units, an increase of
approximately 36% on the previous year.The joint venture
controls a 10.4% share of the total market. Output of
gearboxes by Haveco (33% Iveco, 33% Yuejin Group, 33%
Hangzhou) increased significantly to 23,000 units (15,000
units in 2000), thanks in part to the acquisition of orders
for two family car programmes which will raise output to
60,000 gearboxes in 2002.
India
Indian market demand for commercial vehicles, regarded
as a leading indicator of economic activity, showed a
declining trend for year 2001 as for 2000. Overall, sales
dipped by 6.2% to around 144,900 vehicles in 2001
(154,400 vehicles in 2000). The demand slowdown was
particularly significant in the light commercial vehicle
segment (GVW from 3.5 to 7.5 tonnes).This segment saw a
decline of 10.5% in 2001 and was reduced to 56,000 vehicles
from 62,200 units in 2000. The market for medium and
heavy weight commercial vehicles (GVW above 7.5
tonnes), which is of particular interest to Iveco business,
was also affected slightly by this economic slowdown.This
segment fell by 3.3% in 2001, a decrease in sales from
92,000 vehicles in 2000 to approximately 89,000 vehicles
in 2001. Ashok Leyland Ltd, Iveco's Indian partner company,
also recorded a fall in overall sales to 30,700 units in 2001
(34,500 in 2000). Fierce competition from the market leader
Tata Engineering (Telco), to grab the reduced market, also saw
a 3% dip in Ashok Leyland's market share to 34% in the
medium and heavy vehicle segment.
OPERATIONS IN OTHER COUNTRIES
In 2001, Iveco sold 1,061 vehicles in Australia, where the
market totalled 18,100 units, taking 5.9% of the market
(4.8% in 2000). The recovery was particularly significant in
the heavy vehicle segment (GVW above 15.5 tonnes),where
Iveco achieved 13.9% of the market (11.8% in 2000).
In South Africa, Iveco sold over 600 vehicles in 2001, in line
with forecasts. During the year the new Daily was launched,
taking its place in a market segment where Iveco increased
its share from 6% in 2000 to 9% in 2001, and immediately
winning an important public tender for 104 ambulances, 80
of which were invoiced during the year.Where exports are
concerned, sales were stable in spite of a sluggish market,
and there are signs of a recovery during 2002.
Where medium and heavy vehicles are concerned, in 2002
the new electronic engines will be introduced and the new
6x4 range for on-road applications will also be launched.
And finally, Ethiopia was hit by a serious economic crisis in
2001. In this context, and in spite of a fall in sales to 122
units (200 fewer units considering direct sales as well),
Amce maintained its market share.
26
Financial services (Transolver Finance)
The Transolver Finance group of companies manage
both financing activities for the distribution network,
and financing and leasing activities for end customers
on the major markets.
In 2001, Transolver Finance considerably expanded its
activities in all the markets in which it is present with
its own operating structure: France, Germany, Italy,
Spain, Switzerland and the United Kingdom. A
Transolver organisation also finances sales in Brazil.
The portfolio of financing and leasing contracts for end
customers amounted to 99,091 units at December 31,
2001 (86,000 units at the end of the previous year) for
a total value of approximately Euro 2,100 million.
During 2001, 43,225 new financing and leasing
contracts were stipulated, up 30% on 2000.
A total of 34,441 contracts were stipulated for new
Iveco vehicles, a 24.8% increase on the previous year,
bringing the level of vehicles financed to 30% of the
total of Iveco sales.
A further 8,784 contracts provided financing for
second-hand vehicles, buses, trailers and semitrailers.
There were also significant increases in this sector of
activity over the previous year.
The highest percentage of Iveco vehicle sales financed
was recorded in Germany, where over 42% of sales
were financed by the local Transolver Finance company.
In France this percentage was about 29% on average, with a
particularly good performance in the heavy vehicle segment.
In Italy and Spain there was a significant increase in the
volumes financed compared to the previous year (an
increase of 30%).
The first full year of operations of the Transolver
companies in the United Kingdom and Switzerland
achieved satisfactory levels.
In Brazil the system set up to finance local sales became
fully operative during the year, and stipulated 1,588
contracts, a 28% increase on 2000 (1,245 contracts).
In January 2002 the companies in the Transolver
Finance group changed their name to Iveco Finance.
Rental services (Fraikin and Transolver Service)
In 2001, there was significant growth in business
volumes and in the fleet of commercial vehicles
managed by Fraikin and Transolver Service in Europe.
More generally, on the major markets, the acquisition
of new long-term rental contracts was very much in
line with the previous year, with 6,681 new contracts
and 2,831 renewed contracts.
By the end of 2001, the fleet of vehicles rented by
Transolver Service and Fraikin had reached about
37,000 units, a 9.7% increase on 2000, due in part to
the implementation of important long-term rental and
fleet management contracts signed at the end of 2000
with 3 large operators in the food and postal sectors
(Agrigel, La Poste and Geodis).
On December 31, 2001, the fleet was made up of:
28,669 vehicles in France, 5,173 in the United
FINANCING AND SERVICE ACTIVITIES
1999 2000 2001
Retail 12,907 12,720 14,301
Leasing 8,672 14,372 20,140
Contract Hire 984 8,732 9,512
Total 22,563 35,824 43,953
NEW CONTRACTS BY PRODUCT (*)
(*) renewals included
R E P O R T O N O P E R A T I O N S
99 00 01
20,000
16,000
12,000
8,000
4,000
0
Con
trac
ts (
unit)
NEW CONTRACTS BY PRODUCT
F I N A N C I N G A N D S E R V I C E A C T I V I T I E S 27
Kingdom, 1,290 in Spain, 1,184 in the Benelux, 383 in
Italy, 150 in Germany and 120 in Portugal.
Without considering the important French fleet, which
expanded by a further 4% on 2000, the remainder of
the European fleet amounts to 8,305 vehicles, a 35%
increase (6,132 vehicles at the end of 2000), thus
underpinning the development of Iveco's services
activities on all European markets, reflecting the
deregulation and maturity of these markets.
During the year there was significant growth in the
United Kingdom (+23%), a huge increase in Spain (over
50%) as a result of the strong growth of the long-term
rental concept, and the acquisition of the new
important contracts mentioned above.
Transolver Service also launched its rental activities in
Germany together with the Iveco network, but it had
to limit its development in Italy because the existing
law making it impossible to rent vehicles with a gross
vehicle weight above 6 tonnes remains in place.
On the other hand, acquisitions of new short-term
rental contracts, where Fraikin France is the most
important supplier, contracted significantly, the sign of
an economic slowdown noted in the second half of
the year.
For its part, LEV, the Fraikin subsidiary that leads the
French market for short-term rentals of vehicle
accessories (telescopic accessories, mechanical booms,
lifts, etc.), with a fleet of 1,517 units, had to face fierce
competition from new operators in a developing market,
and this translated into a significant fall in prices.
1999 2000 2001
Light 12,401 19,396 25,524
Medium 3,687 7,359 8,181
Heavy 6,475 9,069 10,248
Total 22,563 35,824 43,953
NEW CONTRACTS BY RANGE (*)
1999 2000 2001
Italy 8,271 9,749 12,514
France 4,912 12,286 14,285
Germany 5,610 7,703 6,343
Spain 2,858 3,409 4,672
UK 912 2,251 3,306
Other — 426 2,833
Total 22,563 35,824 43,953
NEW CONTRACTS BY COUNTRY (*)
(*) renewals included
(*) renewals included
99 00 01
27,500
22,000
16,500
11,000
5,500
0
99 00 01
15,000
12,000
9,000
6,000
3,000
0
Con
trac
ts (
unit)
NEW CONTRACTS BY RANGE
Con
trac
ts (
unit)
NEW CONTRACTS BY COUNTRY
28 R E P O R T O N O P E R A T I O N S
CUSTOMER SERVICE
In 2001, the main trends in the market for after-sales
service to Iveco vehicles were: increased attention to
vehicle productivity on the part of the customer and
shorter average ownership times, the stability of the
fleet on the road, and technological improvements on
the latest generations of vehicles which allow the
customer to spend less on maintenance.
As a result, in 2001 the mix of spare parts sales focused
increasingly on maintenance and repair work, which
caused heightened competitive tension on these
products.
In collaboration with its dealer network, Iveco anticipated
this market trend by developing a range of products that
was more suited to the customer's new expectations:
maintenance contracts, specialist service, extension of the
range towards "Full Service", e-Service, etc.
In 2001, the extension of Iveco's collaboration with
Hays Logistics made it possible to reach the set targets
in terms of the level of service to customers and of
efficiency related to distribution costs; what is more, the
transfer of the Madrid distribution centre to a new site
in Azuqueca de Henares will bring a significant reduction
in warehouse overheads.
This collaboration with Hays has also led to a drastic
redesign of the spare parts distribution system which
will involve all aspects of the logistic chain, from
suppliers to plants, the five spare parts distribution
centres and dealers, right down to the vehicle repair
workshops.
The goal of this project is to anticipate the new
distribution scenarios that will develop in Europe and to
achieve efficiency in terms of global logistic costs.
In the context of the Ramses project, which is intended
to strengthen Iveco's partnership with its network and
to develop parts sales and services to end customers,
the commercial and logistic integration of nearly all the
dealers was concluded in 2001.
On the Italian and Spanish markets, nearly all sales by
local dealers (respectively 83% and 97%) were
managed by this integrated system, while 54% of sales
by Germany dealers and 15% of those in the Benelux
were also included in the system.
The Ramses system also regards the issue of all-
inclusive service offers at set prices and the
management of promotional packages, allowing the
customer to access the promotional catalogue via the
Internet and to book maintenance appointments at any
participating Iveco workshop.
In 2001, approximately 70 promotional ventures were
launched through the system in all European markets,
with the participation of over 2000 service centres.
What is more, instruments were distributed and
perfected to support decision-making processes in the
commercial area of the Business Unit.
This made it possible to increase the margin on more
high tech and replacement products by 8.5%, and to
increase the effectiveness of the Iveco commercial
resources in the field, in order to create greater
efficiency between the partnership and the network,
and to boost its share of the Customer Service market.
Technical activities primarily regarded the evolution of
diagnostic instruments.
From a technological viewpoint we should underline the
improved diagnostic capabilities of the instruments and
the use of teleprogramming on electronic control units,
both made possible by the collaboration of Eltrac, our
traditional supplier in this field.
In January 2001 the operative launch of the Customer
Support Centre in Turin was completed; its goal is to
increase the network's capacity for repairs and, more in
general, to improve after-sales services by close
contacts with customers.
This pole of excellence can boast the very best
professional skills in the field of diagnosis, technical
training and workshop methods.
The main activities performed at the Centre include:
- Technical training: technical and service training for the
whole network, adopting the latest technologies (Virtual
Simulator);
- Diagnostics: two divisions which interface respectively
with the engineering, design and development
structures, and with the BU Customer Service, to
29R E P O R T O N O P E R A T I O N S
meet a growing demand for technologically advanced
diagnostic instruments for the electronic control units
on Iveco vehicles;
- Client Centre: the multifunctional centre in Turin
which acts as a single operational centre for Iveco Non-
stop Assistance services.
The new technical training centre for the French service
network was inaugurated in Trappes at the end of June.
30 R E P O R T O N O P E R A T I O N S
Early in 2001, activities to modify central and outlying
systems were completed to allow the Euro to be used
in all internal management processes and for the
exchange of information with dealers and suppliers.
In the field of infrastructure, procedures to design the
communications network for interaction between Iveco
premises and those of its partners got underway. It will be
introduced in Europe during 2002 and will subsequently
be extended to the rest of the world.
The policies for the security of information were also
defined; a methodology was developed to define the
protection plan which will be applied in full in 2002,
and projects to develop the safety and control
infrastructure were also defined and launched.
In view of the fact that the main I.T. systems to
support company processes are now functionally and
technologically dated, and therefore costly,
preliminary inquiries were begun related to the
introduction of ERP and CRM software products in
the company, and they will be implemented in the
coming years.
Other management and computer systems were also
developed and implemented, and we should mention:
PRP (Product Representation Process)
The various functions in the Product Definition,
Technology and Commercial areas were consolidated.
In addition to this, the commercial function was
launched on the Benelux market and will be extended
to other European markets during 2002.
NEXT Programme
Important activities were performed regarding Lean
Production. In the context of the "Programme Stability"
Project, as part of the extended value chain, the
processing logics related to the sourcing of bought out
materials were reviewed.
And to rationalise the use of information regarding
product structure, the question of the "Reduction of
Product Complexity" was analysed.
INCAS (Iveco New Cost Accounting System)
Following a review of the process of Industrial
Accounting Control, which saw the introduction of ABC
(Activity Based Costing) in its Core processes, the new
INCAS system of Industrial Accounting was introduced,
based on Business Intelligence instruments.
REMOS (REMarketing Operational System)
The second-hand vehicle management system was
completed, with new functions regarding the logistic
process to manage vehicles becoming available at the
Hildesheim second-hand centre (Germany).The system will
be extended to the other European markets during 2002.
RAMSES
The Customer Service support system (RAMSES) was
consolidated with introduction of new functions making
it possible to determine the market's potential for
absorption (Potential) and the different attribution of
sales targets to dealers (European Commercial System),
and to monitor the level of the service supplied to the
end customer (Commercial Monitoring). The system
was implemented in the major European markets, a
process that will be concluded in 2002.
HRMS
During 2001 the HRMS system to support the
processes of human resources development and
management incorporated the assessment functions
known as Management Review, Management by
Objectives, Assessment of Work results and the
Assessment Programme for new graduates.
e-BUSINESS
In the field of e-business, in 2001 Iveco developed and
launched the "Human resources portal", the "Iveco.com
Corporate Portal", the "Marketplace of Second-hand
vehicles" and five "professional communities". And the
launch of the new Stralis heavy vehicle was also
supported by the Internet.
INFORMATION TECHNOLOGY
31
2001 saw both the implementation of the new method
to develop professional skills, and a particular
commitment on the training front, sustained by the
activities of the Change Management Platform. This
initiative, in which the company has invested the energy
and enthusiasm of a group of ten Professionals occupied
full time (Change Agents), was launched with the aim of
supporting the cultural change with which Iveco is
tackling the growing demands for product quality and
operating profitability. The most significant activities of
the Platform included the first stage of the Q3200
training programme in the last quarter of the year; it
addressed the questions of the improvement and re-
engineering of processes, and involved over 2,300
Professionals. The Q320000 programme is destined to
affect the company's entire workforce. Still on the topic
of training, the "Iveco: Building a Leading Company"
programme involved 300 managers and focused on the
acquisition of a clearer, more extensive vision of the
company's strategies and priorities.
Besides training activities, several initiatives reflected
the growing attention that Iveco pays to its personnel
and, in particular to specific groups of the company's
workforce. One significant example is that of young
graduates, in favour of whom several initiatives were
launched, including assessment and guidance related to
their professional development, backed up by
personalised feedback (the Feedback Intensive
Programme), and a dedicated convention, the 2001
edition of which focused on projects to re-engineer
some of the company's key processes (Graduates
Convention).
As part of activities organised by the Fiat Group to
obtain feedback regarding the internal climate, the
People Satisfaction Survey 2001 monitored the level of
satisfaction on the job (ISL) and the level of
identification with the company (ILA) of over 3,000
Professionals. In the majority of cases, the results of the
survey confirmed the effectiveness of improvement
measures that emerged from the 2000 edition. Analysis
of 2001 data revealed a significant improvement on the
results of 2000, which were already good (+5.9% for ISL,
+2.8% for ILA), laying the foundations for further action,
the goal being to encourage a spiral of continuous
improvement.
A huge organisational and methodological effort
accompanied the Next programme promoted by the Fiat
Group to re-engineer company processes.Where Iveco is
concerned, Next was combined with the existing Cost
Quality Plan, applying the Business Process Re-engineering
method (BPR) to the company's core activities, with the
dual aim of cutting the operating costs of the Iveco
"system" and raising the quality of its products.
2001 was also a year of intense development in the field
of I.T. systems, starting with those dedicated to human
resources, like the Human Resources Management
System and Data Warehouse, thanks to which line
managers are gradually being involved directly and
systematically in the evaluation and auditing of
personnel working for Iveco.The purpose of this project
is to make fully operative an organisational model based
on the principle of "self service", thanks to which line
managers really manage their own resources. In parallel
with these systems, the new Iveco Intranet system,
known as the e-Portal, was launched in 2001, thanks to
which a considerable mass of information is now shared
and accessible by all users of the company network.The
e-Portal also provides access to company applications
and is a significant step towards the development of a
computer support shared by the whole of Iveco.
In the area of collective management, the use of
instruments designed to increase the flexibility of labour
continued in 2001. During the year, use of these
instruments was mainly positive, except for the final
part of the year when there was a turnaround caused by
a contraction in demand.
In Italy in particular, tried and tested forms of flexibility for
new employees (part-time, weekends) were combined
with extensive recourse to forms of temporary work
(with peaks of over 1,000 workers in the various
manufacturing centres in the first half of the year).
There was significant turnover among the workforce. If
on one hand outsourcing operations continued at a
slower rate than the previous year (about 260 people in
HUMAN RESOURCES
R E P O R T O N O P E R A T I O N S
32 R E P O R T O N O P E R A T I O N S
Europe), the number of personnel leaving the company
remained high, and involved over 3,100 employees.
More than 3,000 people were taken on during the year
at various levels; of these 1,158 were hired under short-
term contracts, while changes to the consolidation
perimeter due to acquisitions accounted for another
160 people. As a whole, the total number of Iveco
employees stabilised at 35,340 (down 512 on the
previous year).
Where labour costs are concerned, the increase in
inflation rates in Italy and Germany, and particularly
Spain, proved to be higher than expected. This made it
difficult to put a brake on wage increases which grew by
an average of 3% over the year for Europe as a whole.
R E P O R T O N O P E R A T I O N S 33
In January 2002, the Iveco Group acquired a further 15%
of the share capital of the Irisbus Holding, raising its
stake to 65%, under the terms of the agreement reached
with Renault at the end of 2001, which will enable Iveco
to acquire full control of Irisbus by the end of the year.
Also in January, as part of the agreement with a Chinese
partner, Iveco Spa paid the second instalment of $10
million into the joint venture CBC-Iveco Ltd. in the
form of a capital increase.
The complete incorporation of Irisbus into the Iveco
organisation and the new business opportunities arising
from the agreement with CBC in China, will enable
Iveco to become the most important manufacturer in
the world bus market.
In order to strengthen the dealer network in Spain,
and to control the Barcelona area in particular, on
January 15, Iveco Pegaso acquired control of Zona
Franca Alari Sepauto S.A. from a third party.
As for new products, the launch of the Stralis range
powered by Cursor 10 and Cursor 13 engines rounded
off by the 540 Hp version, crowns the development
process concerning Iveco heavy on-road vehicles that
began in 1998 and introduces equally essential novelties
in terms of operating economy, and reduction in costs
of maintenance, operating flexibility, comfort and safety.
Market prospects for 2002 are not good, in fact a
significant downturn of demand is expected, particularly
in Western Europe.
In spite of this scenario, the company remains
committed to guaranteeing positive levels of profitability
and to reducing its financial requirements, and as a
result the enormous effort that will go into the
restructuring plan in order to limit the impact of this
negative trend, will be of fundamental importance.
EVENTS OCCURRING AFTER THE CLOSE OF THE YEAR
34 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
CONSOLIDATED FINANCIAL STATEMENTS
Analysis of operating results and financial position 35
Consolidated balance sheets 40
Consolidated statements of operations 44
Consolidated statements of cash flow 46
Notes to the consolidated financial statements 47
Report of the indipendent auditors 78
Ten-year highlights 79
The companies in the Iveco Group 80
CONTENTS
35C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
In 2001, the consolidation perimeter of the Iveco Group was modified by the line-by-line consolidation of the
following:
- Iveco Otomotive Ticaret A.S.: Turkish dealer owned 100% by Iveco Spa which provides after-sales service for
Iveco heavy vehicles and sales activities as part of the Otoyol network;
- Transolver Lease GmbH and Transolver Finance E.F.C. SA (the latter was consolidated on a proportional basis
of 50% in 2000);
- Transolver Services GmbH;
- Mediterranea de Camiones SL: a former Iveco Pegaso dealer and now a marketing company based in Valencia
(Spain);
and by the line-by-line consolidation of Irisbus Australia Pty Ltd. in the Irisbus Holding.
The operating results for the year are summarised in the brief Income Statement and the Notes that follow:
ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
Summary of the consolidated Income Statement (Euro million)
2001 2000 % Change
Revenues from sales 7,627.6 7,819.7 (2.5)
Revenues from sales of services 1,022.5 791.4 29.2
Net revenues 8,650.1 8,611.0 0.5
Other revenues 531.1 648.3 (18.1)
Value of production 9,181.2 9,259.3 (0.8)
Cost of materials 4,995.2 5,130.2 (2.6)
Cost of services 1,367.1 1,220.8 12.0
Cost of labour 1,336.9 1,359.0 (1.6)
Other expense 1,211.3 1,060.1 14.3
Cost of production 8,910.5 8,770.2 1.6
Operating profit 270.7 489.2 (44.7)
Financial income and expense (145.5) (144.5) 0.7
Adjustments to financial assets (3.0) (6.4) (54.1)
Extraordinary income and expense (233.9) (61.4) n.s.
Income tax (11.2) (130.2) (91.4)
Minority interest (1.7) (0.3) 427.4
Net profit (124.6) 146.3 (185.2)
36 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Total net revenues for 2001 came to Euro 8,650 million, more or less in line with the previous year. This item
takes in revenues from sales of vehicles and spare parts amounting to Euro 7,627.6 million, down Euro 192 million,
or 2.5% compared to the year before, offset by an increase of 29.2%, or Euro 231.1 million with respect to 2000
in the item “revenues from services and financial and leasing activities” which shows a total of Euro 1,022.5
million. Like-on-like, total net revenues are in line with 2000.
The “other income and revenues item” shows a total figure for the year of Euro 531 million compared to Euro
648 million of the year before. In detail, variations are due to the item “Change in work in progress, semi-finished
and finished products inventories” which varies from Euro –3.9 million to Euro –35.6 million for the current year,
to “internal production” of vehicles destined for intercompany sale to leasing companies which shows a total
amount of Euro 270 million with an increase of 30% compared to 2000 and the item “other income and revenues”
for a total amount of Euro 297 million.Total costs of production came to Euro 8,911 million, an increase of 1.6%
over the year before. More specifically, the costs of raw materials, supplies and merchandise show a fall of 2.6%
on the year before, consistently with the decline in sales, with a percentage of production costs on sales of 58%;
a fall of 1.6% was also recorded in the labour cost item and an 8.3% decline in the item other charges. Research
and development costs incurred during the year were entirely charged to the Statement of Operations and
amounted to Euro 215 million. A sharp rise in the item “Expenses in financial services companies” of 93% was
recorded compared to the previous year, the total being Euro 83 million compared to Euro 43 million in 2000.
This change is due to an increase in the turnover of the finance companies.
The Operating profit amounted to Euro 271 million (Euro 489 million in 2000) and represented operating
profitability of 3.2% of net revenues, lower than in 2000 (5.7% of net revenues).
This contraction was determined primarily by the combined effect of:
- the fall in sales volumes of all the products marketed and, to a lesser degree, a marginal reduction in prices for
the vehicle ranges;
- and the lesser impact of income from the disposal of assets compared to the previous year, which included the
significant profit from the sale of the Urbanitas real estate company.
Net financial expense amounted to Euro 145.5 million (Euro 144.5 million in 2000); if we ignore the positive effect
of the Euro 11.9 million tax credit on dividends (Euro 11.7 million of which related to dividends which Iveco Spa
received from Astra), a phenomenon that was absent the previous year, net financial expense came to Euro 157.4
million, an increase of Euro 12.9 million on 2000, primarily the result of a higher level of indebtedness during the
second half of the year, the dramatic increase in interest rates which impacted on the indebtedness of American
companies (mainly in Argentina and Brazil) and consequently on financial expense, and the emergence of
commercial and financial exchange rate differences payable related to the Sterling and Dollar exchange to the
Euro (albeit to a lesser degree than in 2000, thanks to more efficient hedging of exchange rate risks).
Income from non-consolidated investments was negative for Euro 3 million (negative for Euro 6 million in 2000),
and was influenced by the alignment of a number of affiliated investments to their equity values.
During the year, the balance between extraordinary income and expense was negative for Euro 234 million, a
deterioration of approximately Euro 173 million on the previous year. The cause of this deterioration is to be
found in the important restructuring plan that affected Iveco's activities in Argentina during the year and, more
generally, in the implementation of important operating efficiencies, and as a result Euro 105 million was allocated
to cover extraordinary expense. This item includes extraordinary expense related to changes in the accounting
of certain expenses related to personnel, and to extraordinary costs met to limit production losses due to the
interruption in supplies of essential components caused by the floods that hit Northern Italy in the second half
of October 2000, the effects of which continued into 2001, as we mentioned earlier.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 37
Income tax amounted to Euro 11.2 million; this breaks down into Euro 29.6 million for IRAP (on a par with 2000),
Euro 30.8 million for other taxes and Euro 49.2 million for deferred tax credits. The net balance resulting from
the sum of other taxes and deferred taxes is positive for Euro 18.4 million as a result of the reduction in current
taxes due to the pre-tax loss.
Financial trends during the year are described briefly in the Balance sheet and Notes that follow:
Net tangible fixed assets increased by Euro 8 million, from Euro 2,279 million to Euro 2,287 million, primarily as
a result of:
- new capital spending totalling Euro 718 million (Euro 656 million in 2000), of which Euro 370 million for
industrial investments (Euro 350 million in 2000), primarily related to the completion of the plant to produce light
vehicles in Brazil, a new plant to produce shafts for light and medium duty engines, the restyling of the new Stralis
heavy vehicle and the development of new engine families (the new F1A engine for light vehicles), and Euro 348
million (Euro 306 million in 2000) to expand the contract hire vehicle fleet;
- depreciation of Euro 344 million (Euro 364 million in 2000), of which Euro 132 million (Euro 159 million in 2000)
related to Contract Hire vehicles;
- the negative effect (Euro 12 million) of the conversion of investments in companies with currencies of account
other than the Euro, at year-end exchange rates;
- disposals and other changes totalling Euro 355 million (Euro 320 million in 2000), deriving primarily from
Summary of the consolidated Balance sheet (Euro million)
31/12/2001 31/12/2000 % Change
Fixed assets
Tangible fixed assets 2,286.7 2,278.9 0.3
of which vehicles under operating lease 397.5 449.0 (11.5)
Assets under financial lease 770.0 568.0 35.6
Other fixed assets 671.8 714.2 (5.9)
Current assets
Inventories 1,530.1 1,555.1 (1.6)
Trade receivables 1,009.1 1,129.8 (10.7)
Financial receivables 2,816.9 1,860.2 51.4
Cash and cash equivalents, securities and bonds 405.3 246.5 64.4
Other assets 515.0 456.8 12.7
Total assets 10,004.9 8,809.4 13.6
Stockholders' equity 1,768.4 1,983.8 (10.9)
Liabilities
Reserves for risks and charges 880.9 812.4 8.4
Trade payables 2,239.2 2,266.0 (1.2)
Financial payables 4,129.0 2,766.9 49.2
Other liabilities 987.4 980.2 0.7
Total liabilities and stockholders' equity 10,004.9 8,809.4 13.6
38 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
structured leasing operations on the Fraikin fleet for Euro 267 million (Euro 200 million in 2000).
Other fixed assets amounted to Euro 672 million (Euro 714 million in 2000), decreasing by Euro 42 million; this
change is primarily the effect of the disposal of the investment in Fidis Spa in January, the alignment of investments
in associated companies to their equity value, and capital spending during the year.
Working capital decreased by Euro 143 million, from Euro 125 million to Euro (18) million, as result of the Euro
121 million decrease in trade receivables due to increased discount and securitisation operations undertaken
during the year and to measures taken to reduce overdue accounts, and of the Euro 25 million decrease in
inventories; current liabilities (trade payables and other net payables) gave rise to a hedge of Euro 83 million.
Shareholders' equity decreased from Euro 1,984 million at 31 December 2000 to Euro 1,768 at 31 December
2001; the shareholders' equity pertaining to Iveco totalled Euro 1,703 million (down Euro 211 million), primarily
as a result of the extraordinary expense and charged to the year.
This decrease in Shareholders' equity was primarily the result of the loss for the year (Euro 125 million), dividends
paid (Euro 64 million) and exchange rate differences from the conversion of financial statements in currencies
other than the Euro (loss of Euro 21 million).
The net financial position at 31/12/2001 revealed net indebtedness of Euro 211 million (Euro 223 million in 2000),
an improvement of Euro 12 million during the year.
The following table illustrates the main financial flows that produced this change:
Summary of Cash Flow (Euro million)
Net Financial Position at 31/12/2000 (223)
Cash flow generated/absorbed by operating activities
Net profit plus depreciation and amortisation 284
Net income from non-consolidated investments 3
Net change in provisions 75
Change in current assets and liabilities 143
505
Cash flow generated/absorbed by investment activities
Investment in tangible fixed assets and vehicles under operating lease (718)
Investment in intangible fixed assets (65)
Disposal of tangible fixed assets and vehicles under operating lease 355
(428)
Changes in consolidation area (1)
Dividends paid (64)
Net Financial position at 31/12/2001 (211)
39C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
The net financial position showed a marginal improvement on 2000 due to the joint effect of cash flow (net
income plus amortisation and depreciation) generated during the year, amounting to Euro 284 million, and to
efforts to reduce operating capital (Euro 143 million).
Funds generated by the year's operations (Euro 505 million) exceeded the cash absorbed by investment activities
(Euro 428 million, net of disposals), the demand generated by the changes to the consolidation area (Euro 1
million), and payment of the dividend to shareholders (Euro 64 million).
The structure of the net financial position at 31 December 2001 is illustrated in the following table, and compared
with that at 31 December 2000:
Structure of the net financial position (Euro million)
31/12/2001 31/12/2000 Change
Liquid assets and marketable securities 405.3 246.5 158.8
Short and medium/long-term financial receivables 2,867.6 1,887.2 980.4
Assets granted in leasing 770.0 568.0 202.0
Accrued income and prepaid expenses 15.1 6.0 9.1
Total financial assets 4,057.9 2,707.6 1,350.3
Short-term financial payables 2,511.9 1,523.5 988.3
Medium/long-term financial payables 1,616.5 1,334.8 281.7
Accrued expenses and deferred income 140.5 71.8 68.6
Total financial payables 4,268.8 2,930.2 1,338.6
Net Financial position (210.9) (222.6) 11.6
Analysis of the financial position reveals a higher percentage of financial receivables against the total invested,
which increased by Euro 980 million on 2000, primarily as a result of the increase in sales financing activities by
Transolver finance companies.
Assets granted in leasing at 31 December 2001 represented a net value of Euro 770 million, having increased by
Euro 202 million; this was the result of new loans granted for Euro 466 million, net of amortisation and
depreciation for Euro 193 million and reimbursements for Euro 71 million.
The increase in financial indebtedness, related partly to the refinancing of increased investment in financial assets
(hedged by medium-term indebtedness with rate structures consistent with the assets financed) and partly to the
increased indebtedness arising from the greater funding requirements and the worsening financial situation in
Latin America, but also to the effects of the crisis in Argentina.
40 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
ASSETS
(THOUSAND EUROS)
CONSOLIDATED BALANCE SHEETS AS AT DECEMBER 31, 2001 AND 2000
Notes December 31, 2001 December 31, 2000Amounts due from stockholders’for shares subscribed but not called — —
Fixed assetsIntangible fixed assets 1Start-up and expansion costs 23,023 32,680 Research, development and advertising expenses — — Industrial patents and intellectual property rights 9,516 11,167 Concessions, licenses, trademarks and similar rights 47,750 50,491Goodwill 17,633 19,515 Intangible assets in progress and advances 24,847 22,013 Other intangible assets 24,624 3,753Differences on consolidation 341,256 354,299 Total 488,649 493,918
Property, plant and equipment 2Land and buildings 651,568 701,390Plant and machinery 674,558 645,874 Industrial and commercial equipment 200,019 209,262Other assets 471,949 533,775 Construction in progress and advances 288,607 188,601Total 2,286,701 2,278,902
Financial fixed assets 3Investments in:
Unconsolidated subsidiaries 18,803 24,740 Associated companies 69,812 57,963 Other companies 38,596 105,805
Total Investments 127,211 188,508
Receivables from:Unconsolidated subsidiaries:
Due within one year Total Receivables from unconsolidated subsidiaries — —Associated companies:
Due beyond one year Total Receivables from associated companies — —Parent companies:
Due beyond one year 2,953 908Total Receivables from parent companies 2,953 908Others:
Due within one year 40,019 12,348Due beyond one year 7,719 13,753
Total Receivables from others 47,738 26,101Total Receivables 50,691 27,009Other securities 5,227 4,719Treasury stock — —Assets leased 769,987 568,000 Total 953,116 788,236 Total fixed assets 3,728,466 3,561,056
Current assetsInventories 4Raw materials and supplies 367,004 391,644 Work in progress and semifinished products 204,804 207,360 Contract work in progress 5,910 1,787 Finished goods and merchandise 946,880 949,713 Advances to suppliers 5,454 4,577 Total 1,530,052 1,555,081
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 41
ASSETS
(THOUSAND EUROS)
Notes December 31, 2001 December 31, 2000Receivables 5Trade receivables:
Due within one year 1,003,357 1,126,655Due beyond one year 5,702 3,179
Total Trade receivables 1,009,059 1,129,834Receivables from unconsolidated companies:
Due within one year 1,713 — Due beyond one year
Total Receivables from unconsolidated companies 1,713 —Receivables from associated companies:
Due within one year 8,319 12Due beyond one year
Total Receivables from associated companies 8,319 12 Receivables from parent companies:
Due within one year — 61 Due beyond one year
Total Receivables from parent companies — 61 Other receivables:
Due within one year 360,335 287,965 Due beyond one year 112,972 133,062
Total Other receivables 473,307 421,026 Total 1,492,398 1,550,933
Financial assets not held as fixed assets 6Investments in
Other companies — —Total Investments — — Other securities 49,696 9,853 Financial receivables
Receivables from unconsolidated subsidiaries:Due within one year 2,455 448 Due beyond one year — —
Total Financial receivables from unconsolidated subsidiaries 2,455 448Receivables from associated companies:
Due within one year 28,932 29,879 Due beyond one year
Total Financial receivables from associated companies 28,932 29,879 Receivables from parent companies:
Due within one year 33,284 44,551 Due beyond one year 689 —
Total Financial receivables from parent companies 33,973 44,551 Receivables from others:
Due within one year 1,772,768 1,254,494Due beyond one year 978,738 530,782
Total financial receivables from others 2,751,505 1,785,276 Total financial receivables 2,816,866 1,860,154 Total 2,866,562 1,870,007Cash 7Bank and post office accounts 351,310 233,265 Checks 774 814 Cash on hand 3,491 2,526 Total 355,575 236,605Total current assets 6,244,587 5,212,627
Accrued income and prepaid expenses 8Other accrued income and prepaid expenses 31,863 35,739 Total accrued income and prepaid expenses 31,863 35,739
Total assets 10,004,916 8,809,422
42 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
LIABILITIES AND STOCKHOLDERS’ EQUITY
(THOUSAND EUROS)
Notes December 31, 2001 December 31, 2000Stockholders’ equity 9Stockholders’ equity of the GroupCapital stock 1,179,440 1,179,440 Additional paid-in capital 13,067 13,067 Legal reserve — —Treasury stock valuation reserve — —Retained earnings and other reserves 634,735 574,941Net result (124,578) 146,257 Total 1,702,664 1,913,705Minority interest 65,777 70,123 Total stockholders’ equity 1,768,441 1,983,828
Reserves for risks and charges 10Reserve for pensions and similar obligations 149,293 158,332 Income tax reserves 175,955 196,912 Other reserves 555,633 457,186 Consolidation reserve for future risks and charges — —Insurance policy liabilities and accruals — —Total reserves for risks and charges 880,881 812,430
Reserve for employee severance indemnities 11 213,349 225,431
Payables 12Bonds :
Due within one year — 3,632 Due beyond one year — —
Total bonds — 3,632 Convertible bonds — —Borrowings from banks :
Due within one year 831,945 356,653 Due beyond one year 458,403 85,516
Total borrowings from banks 1,290,348 442,169 Other financial payables :
Due within one year 1,678,311 1,082,787Due beyond one year 1,149,551 1,238,345
Total other financial payables 2,827,862 2,321,132Advances :
Due within one year 58,264 40,283Due beyond one year 82 63
Total advances 58,347 40,346 Trade payables :
Due within one year 2,192,889 2,238,827 Due beyond one year 19,827 27,179
Total trade payables 2,212,717 2,266,006Notes payable :
Due within one year 19,490 17,406 Due beyond one year 36 242
Total notes payable 19,526 17,648 Payables to unconsolidated subsidiaries :
Due within one year 2,449 141 Due beyond one year
Total payables to unconsolidated subsidiaries 2,449 141 Payables to associated companies :
Due within one year 11,648 4,016 Total payables to associated companies 11,648 4,016 Payables to parent companies :
Due within one year 5,356 7,166Total payables to parent companies 5,356 7,166
43
LIABILITIES AND STOCKHOLDERS’ EQUITY
(THOUSAND EUROS)
MEMORANDUM ACCOUNTS 14
(THOUSAND EUROS)
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Notes December 31, 2001 December 31, 2000Taxes payable :
Due within one year 155,361 145,519 Due beyond one year 9,193 8,015
Total taxes payable 164,554 153,534 Social security payable :
Due within one year 55,532 56,531 Due beyond one year 1,324 1,110
Total social security payable 56,856 57,641 Other payables :
Due within one year 119,479 157,178 Due beyond one year 6,212 7,076
Total other payables 125,691 164,254 Total payables 6,775,353 5,477,685Accrued expenses and deferred incomeOther accrued expenses and deferred income 13 366,892 310,048 Total accrued expenses and deferred income 366,892 310,048 Total liabilities and stockholders’ equity 10,004,916 8,809,422
December 31, 2001 December 31, 2000Guarantees grantedUnsecured guaranteesSuretyships :
On behalf of unconsolidated subsidiaries — —On behalf of associated companies — —On behalf of others 226,288 220,095
Total suretyships 226,288 220,095 Guarantees of notes:
On behalf of others 107,879 19,022 Total guarantees of notes 107,879 19,022 Other unsecured guarantees:
On behalf of unconsolidated subsidiaries — —On behalf of associated companies — —On behalf of others 571,681 660,504
Total other unsecured guarantees 571,681 660,504 Total 905,848 899,621 Secured guarantees:
On behalf of unconsolidated subsidiaries — —On behalf of associated companies — — On behalf of others 86,923 108,036
Total 86,923 108,036 Total guarantees granted 992,772 1,007,657 CommitmentsCommitments related to off-balance-sheet instruments 772,270 428,933 Commitments to purchase property, plant and equipment 333,835 412,665 Commitments for contracts in progress 13,616 12,896 Commitments for buy back 653,628 610,428 Other Commitments 28,281 62,074Total Commitments 1,801,630 1,526,996Third-Party assets held by the Group 112,995 113,351 Group assets held by third parties 848,802 349,860 Other memorandum accounts 37,368 43,810 Total memorandum accounts 3,793,567 3,041,674
44 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
CONSOLIDATED STATEMENTS OF OPERATIONS(THOUSAND EUROS)
Notes December 31, 2001 December 31, 2000Value of production 15Revenues from sales and services 8,646,349 8,610,682Change in work in progress, semi-finished and finished products inventories (35,599) (3,929)Change in contract work in progress 3,741 333Additions to internally produced fixed assets 269,541 207,402 Other income and revenues:
Revenue grants 5,352 6,074Other 291,789 438,748
Total other income and revenues 297,141 444,822Total value of production 9,181,174 9,259,310
Costs of production 16Raw materials, supplies and merchandise 4,995,237 5,130,204Services 1,367,070 1,220,803Leases and rentals 174,872 97,017 Personnel:
Salaries and wages 1,000,225 1,016,045Social security contributions 253,369 268,169 Employees severance indemnities 33,064 40,239 Employees pensions and similar obligations 23,706 16,555 Other costs 26,561 18,018
Total personnel costs 1,336,925 1,359,026 Amortization, depreciation and writedowns:
Amortization of intangible fixed assets 66,213 58,534 Depreciation of property, plant and equipment 343,829 364,369 Writedown of fixed assets — 850 Writedown of receivables among current assets and liquid funds 48,946 26,745
Total amortization, depreciation and writedowns 458,988 450,498Change in raw materials, suppliesand merchandise inventories (21,393) (23,080)Provisions for risks 305,626 264,029Other provisions 349 209 Other charges 209,862 228,723Expenses of financial services companies 82,970 42,723Insurance claims and other costsTotal costs of production 8,910,506 8,770,152Difference between the value and costs of production 270,668 489,158Financial income and expenses 17Investment income:
Unconsolidated subsidiaries 11,746 —Associated companies — —Other companies 225 109
Total investment income 11,971 109Other financial income
From long-term receivables:From others 651 383From securities held as fixed assets other than equity investments 261 25 From securities held as current assets other than equity investments 193 637 Other income from:Unconsolidated subsidiaries 33 —Associated companies — — Others 158,789 199,485 Total other income 158,822 199,485
Total other financial income 159,927 200,530
45C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(THOUSAND EUROS)
Notes December 31, 2001 December 31, 2000Interest and other financial expenses
Unconsolidated subsidiaries 8 4Associated companies 44 12Parent companies 268 39Others 317,050 345,054
Total interest and other financial expenses 317,369 345,109Total financial income and expenses (145,471) (144,470)Adjustments to financial assets 18Revaluations of:
Equity investments 5,249 7,981Financial fixed assets other than equity investments — —Securities among current assets other than equity investments — —
Total revaluations 5,249 7,981 Writedowns:
Equity investments 8,197 14,362Financial fixed assets other than equity investments 2 9Securities among current assets other than equity investments — — Financial receivables — 35
Total writedowns 8,199 14,406 Total adjustments to financial assets (2,950) (6,425) Extraordinary income and expenses 19Income:
Gains on disposals 339 464Other income 2,692 26,973
Total income 3,031 27,437 Expenses:
Losses on disposals 1,252 4,693 Taxes relating to prior years 551 1,269Other expenses 235,108 82,890
Total expenses 236,912 88,852 Total extraordinary income and expenses (233,880) (61,415)Result before taxes (111,634) 276,848Income taxes 20 11,186 130,250 Result before minority interest (122,820) 146,598 Minority interest 1,758 341 Net result (124,578) 146,257
46 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
CONSOLIDATED STATEMENTS OF CASH FLOW(THOUSAND EUROS)
2001 2000
A) Cash at January 1 1,051,710 812,834B) Cash flows provided (used) by operating activities:
Net income before minority interest (122,820) 146,598
Amortization and depreciation 410,042 423,753
Change in reserve for employee severance indemnities (21,121) (25,961)
Net change in restructuring provision 31,070 (7,998)
Net change in other provisions 67,377 (2,952)
Result from non-consolidated investments 3,073 23,416
Change in current assets and liabilities:
Trade receivables 110,816 232,614
Inventories 25,029 (50,416)
Accounts payable (53,290) 34,760
Other 8,122 71,854
Reserve for income taxes and other reserves (20,957) 37,341
Changes in the scope of consolidation (566) (56,930)
Total 436,775 826,079
C) Total cash flows provided (used) by investing activities:
Investment in:
Fixed assets (718,271) (655,777)
Intangible assets and deferred charges (58,107) (76,819)
Proceeds from the sale of fixed assets 333,057 331,569
Change in financial receivables (835,932) (854,060)
Other (including effects of acquisitions and other changesin the composition of the scope of consolidation) (165,796) (142,552)
Total (1,445,048) (1,397,639)
D)Total cash flows provided (used) by financing activities:
Changes in long-term borrowings 284,094 914,174
Changes in short-term borrowings 1,067,183 (39,639)
Dividends paid (64,100) (64,100)
Total 1,287,176 810,435
E) Total change in cash 278,904 238,875
F) Cash at December 31 1,330,614 1,051,709
The detail of cash is as follows:
(thousand euros)
Cash on hand 355,575 236,605
Temporary investment of liquidity 925,343 805,251
Securities 49,696 9,853
Total 1,330,614 1,051,709
47C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Form and Content of the Consolidated Financial Statements
The 2001 consolidated financial statements have been prepared in accordance with the rules introduced by the
Italian Legislative Decree No. 127 dated April 9, 1991, which fulfilled the Fourth and Seventh EC Directives.
The subsequent events described in the Report of Operations are an integral part of the notes to the
consolidated financial statements.
The consolidated financial statements include the financial statements of Iveco NV, the parent company, and of
all subsidiaries that constitute the Iveco Group, in which Iveco NV holds directly or indirectly more than 50% of
the voting capital or has de facto control. Also included are joint ventures in which the parent company holds
control directly or indirectly with other partners, consolidated using the proportional method.
Main changes from the previous year are summarized below:
Consolidation Line by Line in Iveco Group of:
- Iveco Otomotive Ticaret A.S.
- Transolver Lease GmbH
- Transolver Services GmbH
- Mediterranea de Camiones SL
- Transolver Finance E.F.C. SA (this Company was consolidated in 2000 with a proportional method 50%)
Consolidation Line by Line in Irisbus Holding of:
- Irisbus Australia Pty Ltd.
Principles of consolidation and significant accounting policies
The consolidated financial statements have been prepared from the statutory financial statements of the Group’s
single companies or subconsolidated financial statements of certain subsidiaries approved by the Boards of
Directors and adjusted, where necessary, by the Directors of the companies to conform with Fiat Group
accounting principles and to eliminate tax-driven adjustments. The Fiat Group’s accounting policy respects the
requirements set forth by Legislative Decree No. 127 of April 9, 1991, interpreted and supplemented by the Italian
accounting principles issued by the National Boards of Dottori Commercialisti and of Ragionieri and, where there
are none and not at variance, by those laid down by the International Accounting Standards Committee (I.A.S.C.).
In order to obtain a true and correct representation of the financial position and results of operations of the
Group, taking into account their functional integration, the financial subsidiaries have been consolidated on a line-
by-line basis. As a result, adjustments to the balance sheet and statement of operations format have been made
in applying Article 32 of Legislative Decree No. 127/91, which provides for changes to be made to obtain a more
clear, true and correct representation of the financial position and results of operations.
Principles of consolidation
Assets, liabilities, revenues and expenses, of subsidiaries consolidated on a line-by-line basis are included in the
consolidated financial statements, regardless of the percentage of ownership. Carrying values of investments are
eliminated against the subsidiaries’ related stockholders’ equity. The portion of stockholders’ equity and results
of operations attributed to minority interests are disclosed separately.
In accordance with Legislative Decree No. 127, differences arising from the elimination of investments against the
related stockholders’ equity of the investments at the date of acquisition are allocated, where applicable, to assets
and liabilities of the company being consolidated. The residual value, if positive, is capitalized as an asset
“Differences on consolidation”, and is amortized on the straight-line method over the estimated period of
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001
48 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
recoverability. Negative residual amounts are recorded as a component of stockholders’ equity “Consolidation
reserve” (or as a liability “Consolidation reserve for future risks and charges”, when due to a forecast of
unfavorable economic results).
Unrealized intercompany profits, losses, and related tax effects are eliminated, together with all intercompany
receivables, payables, revenues and expenses arising on transactions between consolidated companies which have
not been realized with third parties.
The gross margin on intercompany sales is eliminated, with the exception of plant and equipment produced and
sold at prices in line with market conditions, in which case such eliminations would be effectively irrelevant and
not cost-beneficial. Also subject to elimination are guarantees, commitments and risks relating to companies
included in the area of consolidation.
The balance sheets of foreign subsidiaries are translated into Euro by applying the exchange rates in effect at year
end.The statements of operations of foreign subsidiaries are translated using the average exchange rates, except
for those subsidiaries operating in high-inflation countries (cumulative inflation in excess of 100% in three years),
in which case accounting principles for high inflation accounting are used.
Exchange differences resulting from the translation of opening stockholders’ equity at current exchange rates and
at the exchange rates used at the end of the previous year, as well as differences between net income expressed at
average exchange rates and that expressed at current exchange rates, are reflected in the stockholders’ equity
caption “Foreign exchange translation differences”. Such reserves relating to investments in subsidiaries or
associated companies are included in the statement of operations upon the sale of the investments to third parties.
Accounting principles
Balance sheet
Fixed assets
Intangible fixed assets
Intangible assets and deferred charges expected to benefit future periods are recorded at cost, adjusted by
amortization calculated on a straight-line basis over the period to be benefited. In particular, goodwill and
differences on consolidation are amortized over a period of not more than 20 years, taking into account their
expected period of recovery.The costs of researching and developing new products and/or processes are mainly
Major exchange rates versus Euro
2001 2000
Average End Average End
US Dollar per unit 0.896 0.881 0.924 0.930
Pound Sterling per unit 0.622 0.609 0.610 0.624
German Mark per unit 1.956 1.956 1.956 1.956
French Franc per unit 6.560 6.560 6.560 6.560
Italian Lira per unit 1,936.270 1,936.270 1,936.270 1,936.270
Spanish Peseta per unit 166.386 166.386 166.386 166,386
Netherlands Guilder per unit 2.204 2.204 2.204 2.204
Brasilian Real per unit 2.107 2.045 1.690 1.819
Argentine Peso per unit 0.895 1.472 0.924 0.929
Australian Dollar per unit 1.731 1.728 1.589 1.677
Swedish Krona per unit 9.252 9.301 8.446 8.831
49C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
included in the results of operations in the period in which such costs are incurred.
Goodwill represents the contractual amount paid for goodwill resulting from the acquisition of a company or investment.
Property, plant and equipment
Property, plant and equipment are recorded at purchase or construction cost. These values are adjusted where
specific laws of the country in which the assets are located allow or require revaluation, in order to reflect, even
if only partially, changes in the purchasing power of the currency. Cost also includes internal and external financing
expenses incurred up to the time the tangible assets are ready for use.
Depreciation is provided on a straight-line basis with rates that reflect the estimated useful life of the related
assets. Ordinary repairs and maintenance expenses related to property, plant and equipment are charged to the
statement of operations in the year in which they are incurred, while maintenance expenses which increase the
value of property, plant and equipment are capitalized.
Capital investment grants related to investments in property, plant and equipment are recorded as deferred
income when collection becomes certain and credited to income over the useful life of the related asset.
Financial fixed assets
Financial fixed assets include investments in unconsolidated subsidiaries, financial receivables held for investment
purposes and other securities.
Companies in which Iveco NV directly or indirectly holds from 20% to 50% of the voting capital are valued in
accordance with the equity method or recorded at cost when it approximates the value of stockholders’ equity,
when it would not have been practicable to obtain the necessary information for their consolidation on a timely
basis without disproportionate expense or because their activities are not significant.
Less significant investments in which Iveco NV directly or indirectly holds less than 20% of the voting capital are
valued at cost, corresponding to the cost of acquisition increased by direct charges or any amounts paid for the
value of additional shares purchased. In cases of permanent impairment, a valuation allowance is provided as a
direct reduction of the corresponding asset.
Financial receivables are recorded at estimated realizable value.
Securities are recorded at cost, including additional direct charges. In cases of permanent impairment, a valuation
allowance is provided as a direct reduction of the securities.
The investment in equipment leased is recorded at cost.The related depreciation is generally calculated based on
the life of the lease and the related risk in managing such contracts.
Current assets
Inventories are valued at the lower of cost or market, cost being determined on a First In First Out (FIFO) basis.
The valuation of inventories includes the direct costs of materials and labor and variable and fixed indirect costs.
Work in progress on long-term contracts is valued based on the stage of completion and is recorded gross of
advance payments received from customers. Eventual losses on such contracts are fully recorded when they
become known. Provision is made for obsolete and slow-moving raw materials, finished goods, spare parts and
other supplies based on their expected future use and realizable value.
Receivables are recorded at estimated realizable value. Unearned interest included in the nominal value of
receivables has been deferred to future periods. Receivables denominated in foreign currency are translated at the
exchange rate in effect at year end. Resulting exchange gains and losses are included in the statement of operations.
50 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Reserves for risks and charges and employee severance indemnities
The reserve for risks and charges include provisions to cover losses or liabilities likely to be incurred but
uncertain as to the amount or as the date on which they will arise.
The reserve for pensions and similar obligations include provisions for long-service or other bonuses payable to
employees and former employees under contractual agreements or by law, determined on an actuarial basis
where applicable. In particular, pension funds are accounted for in accordance with IAS 19. Starting from 2001, in
order to improve the presentation of the effects deriving from actuarial gains or losses relating to Pension Plans,
the Group shifts to the "corridor" approach, allowed by IAS 19, from the "immediate recognition" methodology
applied in previous years.
The reserve for employee severance indemnities includes the liability for severance indemnities for Italian
companies accrued at year end for each employee and determined in accordance with labour legislation. In
particular, the liability includes a portion of the employee’s annual salary and is indexed for inflation in accordance
with Italian rules.
Restructuring reserves include the costs to carry out corporate reorganization and restructuring plans and are
provided in the year the Management formally decides to commence such plans, to the extent that such costs can
be reasonably estimated.
Payables
Payables are recorded at face value; the portion of interest included in the nominal amount is deferred until future
periods in which it is paid.Accounts payable denominated in foreign currency are translated at the exchange rate
in effect at year end. Resulting exchange gains and losses are included in the statement of operations.
Taxes payable includes the tax charge for the current year recorded in the statement of operations.
Accruals and deferrals
Accruals and deferrals are determined using the accrual method based on the income and expense to which they relate.
Memorandum accounts
Off-balance sheet financial instruments
Financial instruments used to hedge exchange and interest rate fluctuations and, in general, changes in the assets
and liabilities, are presented in Note 14. Off-balance sheet financial instruments are recorded at inception in the
memorandum accounts at their nominal contract value. Instead, financial instruments used for trading purposes
are valued at year-end market value and the difference compared to the nominal contract value is recorded in
the statement of operations under Financial income and expenses.
Statement of Operations
Revenue recognition
Revenues from sales of products are recognized at the moment title passes to the customer, which is generally at the
time of shipment. Revenues from long-term contracts are recognized using the percentage of completion method.
51
Revenues also include amounts received from financing leases, net of depreciation, and income from company
assets on operating leases.
Costs
Costs are recognized on an accrual basis.
Research and development costs are mainly charged to the statement of operations in the period in which they
are incurred. Research-related revenue grants provided by the Government or the EU are credited to the
statement of operations when collection becomes certain. The caption Leases and rental relate rental and,
according to the Italian regulations, the operating leases costs, included those carried out by Fraikin Group's
companies following the securitization of the fleet.
Advertising and promotion expenses are charged to the statement of operations in the period in which they are
incurred. Estimated product warranty costs are charged to the statement of operations at the time of sale
(accrual method).
Financial income and expenses
Income and expenses resulting from off-balance sheet financial instruments, as well as year-end exchange
differences, are included as financial income and expenses in the statement of operations in accordance with the
following policies.
Gains and losses relating to off-balance sheet financial instruments not designated as hedges are determined
based on the fair market value of such instruments and are included in the statement of operations.
For foreign exchange instruments designated as hedges, the premium or discount, representing the difference
between the spot exchange rate at the inception of the contract and the forward exchange rate, is included in
the statement of operations in accordance with the accrual method. Differences between the value of such
instruments using the exchange rates at inception and those at year-end are also included in the statement of
operations and offset the exchange effects of the items being hedged.
Costs relating to the factoring of receivables and notes of any type (with recourse, without recourse, securitization)
and nature (trade, financial, other) are charged to the statement of operations on an accrual basis.
Income taxes
Income taxes currently payable are provided for on the basis of reasonable estimates of the liability for the year,
in accordance with the existing legislation of the countries in which the Group operates.
Deferred tax liabilities or deferred tax assets are determined for the most significant consolidation transactions
and all the temporary differences between the consolidated assets and liabilities and the corresponding amounts
for purposes of taxation shown on the statutory financial statements of the consolidated companies.
In particular, deferred tax assets have only been recorded if there is a reasonable certainty of their future
recovery. Deferred tax liabilities, instead, are not recorded if it is unlikely that a future liability will arise.
Deferred tax assets and liabilities are offset if they refer to the same company. The balance from offsetting the
amounts is recorded in Other receivables in current assets, if a deferred tax asset, and in the Deferred tax
reserve, if a deferred tax liability.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
52
2. Property, plant and equipment
(thousand euros) Net of Addi- Depre- Change in Reclassifi- Foreign Disposals Net of Accumulateddepreciation tions ciation the area of cations exchange and depreciation depreciation12/31/2000 consolidation effects other 12/31/2001 12/31/2001
Land and buildings 701,392 35,230 30,379 — (12,994) (15,483) (26,198) 651,568 463,606
Plant and machinery 645,874 67,644 98,013 29 85,156 1,402 (27,533) 674,558 1,203,656
Industrialand commercialequipment 209,262 48,418 58,851 — 8,281 677 (7,768) 200,019 579,791
Other assets 84,655 38,071 25,060 97 (2,555) (175) (20,535) 74,499 300,386
Vehicles onoperating leases 449,119 348,328 131,525 93 959 1,493 (271,018) 397,450 472,201
Constructionin progressand advances 188,600 180,580 — — (78,847) (148) (1,578) 288,607 —
Total property,plant and equipment 2,278,902 718,271 343,829 219 — (12,233) (354,629) 2,286,702 3,019,639
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros) Net of Additions Amortization Disposals, Net ofamortization reclassifications amortization
12/31/2000 and other 12/31/2001
Start-up and expansion costs 32,680 231 5,921 (3,967) 23,023
Research, developmentand advertising expenses — — — — —
Industrial patentsand intellectual property rights 11,167 227 2,009 131 9,516
Concessions, licenses, trademarksand similar rights 50,491 12,059 28,709 13,908 47,749
Goodwill 19,515 1,259 3,077 (63) 17,634
Intangible assets in progressand advances 22,013 17,901 — (15,068) 24,846
Other intangible assets 3,753 26,429 6,630 1,072 24,624
Differences on consolidation 354,299 6,839 19,868 (15) 341,255
Total intangible fixed assets 493,918 64,945 66,214 (4,002) 488,649
The decrease in 'Start-up and expansion costs' (9.7 million euros) is due to the amortization for 5.9 million euros
and to the difference in exchange rates of 4.0 million euros in Iveco Fiat Brasil Ltda and Iveco Latin America Ltda.
Increase during the year in the item ‘Concessions, licenses, trademarks and similar rights’ mainly concerns the
acquisition of the license IBM Catia for CAD and CAE, and the reclassification from 'Intangible assets in progress
and advances' for the software programmes to be used in Iveco processes.
The addition in 'Intangible assets in progress and advances' of 17.9 million euros concerns in particular an
acquisition in Iveco S.p.A. of software programs that refer to: PRP release 3, Oracle HRMS; Incas.
The increase in 'Other intangible assets' is mainly due to the capitalisation of know-how for the development and
industrialisation of the new model Stralis for an amount of 23.4 million euros.
COMPOSITION, PRINCIPAL CHANGES AND OTHER INFORMATION
Fixed assets
1. Intangible fixed assets
53C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
A limited part of the tangible fixed assets were revalued in past year as described in the accounting policies.The
residual net book value of these revaluations at December 31, 2001 after depreciation and disposals amounted
to 101.6 million euros (112.0 million euros at 2000 year end). A fixed assets revaluation booked in Iveco
Venezuela S.A. and Iveco Otomotive Ticaret AS, which operate in hyperinflationary economy, has been reported
in the item ‘Others’ for a total amount of 5.9 million euros.
Reclassifications primarily refer to a reduction in construction in progress and advances for the purchase of
property, plant and equipment existing at the end of the prior year which were reclassified at the time they were
effectively acquired and put into operation.
Foreign exchange effects for a negative amount of 12.2 million euros is principally due to the exchange effect in
Iveco Fiat Brasil Ltda, Iveco Latin America Ltda and Iveco Argentina SA.
Caption “Vehicles under operating leases” refers to value of assets of Fraikin Group and Transolver companies
under operating leases contracts.The additions in this item for an amount of 348.3 million euros is mainly due to
the renewal of the Fraikin fleet for an equivalent of 292.0 million euros.
Disposals of 271.0 million euros in the item ‘Vehicles under operating leases’ (227,4 million euros in 2000) is
mainly due to the securitization of a part of Fraikin Group fleet starting from 2000 year, through which the
invested capital has been reduced versus the development of innovative structured leasing operations. Future
lease payments under non cancellable Fraikin’s lease agreements are as follows (in million euros):
- year 2002: 93.9
- year 2003: 93.9
- year 2004: 93.9
- year 2005: 66.6
- year 2006: 38.1
The increase in 'Construction in progress and advances' is essentially due to the significant investments made by
the italian companies.
The depreciation rates % are not changed compared to the previous year.
Weighted average
Land and buildings 2.9% - 4.1%
Plant and machinery 5.2% - 17.7%
Industrial and commercial equipment 16.7% - 18.8%
Other assets 11.1% - 24.0%
54 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
3. Financial fixed assets
Investments
The movement in investments is as follows:
12/31/2000 Other Translation Dividends Share in result 12/31/2001movements differences received & valuation
adjustments
Unconsolidated subsidiaries 24,740 (5,920) 1,196 — (1,213) 18,803
Associated companies 57,963 14,823 675 (519) (3,130) 69,812
Other companies 105,805 (67,270) (1) (1,209) 1,270 38,595
Total investments 188,508 (58,367) 1,870 (1,728) (3,073) 127,210
On January 2001 the Iveco Group sold the investment in Fidis to Fiat Group and this movement is shown in the
column "Other movements" in the line "Other companies" for an amount of 67.3 million euros. In the same
column in the line "Associated companies" it is shown the increase mainly due to the acquisition of CBC-Iveco
Ltd for an amount of 14.5 million euros.
Investments are stated net of provisions for permanent impairment where considered necessary.
The detail of the share in results and dividends received is as follows:
(thousand euros) Dividends Sharereceived in result
Otoyol Sanayi — (2,064)
Otoyol Pazarlama 519 (539)
Iveco Motorsich — (571)
Iveco Ukraine — (642)
Ashok Leyland — (1,298)
Ennore Foundries — (32)
Haveco — 789
Iveco Uralaz — 3,048
Elasis 1,209 1,270
E.E.A. — (3,034)
Total 1,728 (3,073)
The investments by type of consolidation method, are analysed as follows:
(thousand euros)
(thousand euros) 12/31/2001 12/31/2000
Investments accounted for using the equity method 63,337 126,228
Investments valued at cost 63,875 62,280
Total investments 127,211 188,508
55C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros)
% Amount % Amount
Unconsolidated subsidiaries :
Fias 80.— 82 80.— 82
Financière Pegaso France 100.— 169 100.— 169
F. Pegaso S.A. 100.— 1,278 100.— 1,278
Finomina — — 60.— 32
Iveco Ukraine 65.909 11,517 58.— 11,393
Iveco Otomotive Ticaret — — 99.973 3,418
Iveco Motorsich 55.556 4,765 55.556 4,913
Transolver Service GmbH — — 100.— 750
Transolver Lease GmbH — — 100.— 775
V.I.O. — — 100.— 945
Transolver Finance AG 100.— 993 100.— 985
Total 18,803 24,740
At 12/31/2000At 12/31/2001
(thousand euros)
% Amount % Amount
Associated companies:
AFIN Leasing AG 40.— 1,600 — —
Atlas Vehicules Ind. SA. 48.985 853 — —
Auto Distribution Illiberis 49.— 1.208 49.— 1,208
CBC - Iveco Ltd 50.— 11,468 — —
C.R.F. 20.— 5,032 20.— 2,582
C.S.S.T. 30.— 155 30.— 155
E.E.A. 33.333 4,966 33.333 8,000
Elettronica Trasporti 50.— 66 50.— 66
Fiat OM Carrelli 25.— 5,171 25.— 5,171
SADI Brasil Ltda (ex Gesco Fortrade) 20.— 10 10.— 11
Haveco 33.333 9,908 33.333 8,727
Iveco Uralaz 33.333 4,462 33.333 1,131
Machen 30.— 9,312 30.— 10,642
Otoyol Pazarlama 27.— 961 27.— 1,823
Otoyol Sanayi 27.— 14,641 27.— 16,706
Vehiculos Industriales — — 20.— 1,170
Zona Franca Motor — — 20.— 571
Total 69,812 57,963
At 12/31/2000At 12/31/2001
As allowed by law, the above companies have not been consolidated either because it would not have been
practicable to obtain the necessary information for their consolidation in time or because their activities are
not significant.
Investments in associated companies are as follows:
The detail of the unconsolidated investments is as follows:
56
At 12/31/2000
Receivables
(thousand euros)
Due within Due beyond Total Due within Due beyond Totalone year one year one year one year
Parent companies 2,953 — 2,953 — 908 908
Unconsolidated subsidiaries — — — — — —
Others 40,019 7,719 47,738 12,348 13,753 26,101
Total receivables 42,972 7,719 50,691 12,348 14,661 27,009
At 12/31/2000At 12/31/2001
At 12/31/2000
Other securities mainly include marketable Government securities and bonds.
Assets leased consist of vehicles sold by the Iveco Sector under financial leases (Transolver companies).
Assets leased do not include vehicles on operating leases, which are included under property, plant and
equipment.
The increase of the leasing portfolio is essentially due to the growth of Iveco Finance Italy and Germany that have
reached a mature phase after the priors year launch.
Assets leased
(thousand euros) Value at Additions Depreciation Foreign Disposals Net of Accumulated12/31/2000 exchange and other depreciation depreciation
effects 12/31/2001 12/31/2001
Assets leased 568,000 456,222 192,521 — (71,414) 769,987 435,558
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
At 12/31/2001
Other Securities
(thousand euros)
Bonds held as permanent investments 5,227 4,719
Investments in other companies are as follows:
(thousand euros)
Other companies:
Fidis — 68,315
Truck & Bus Company 32,503 32,503
Elasis 2,640 2,578
Others 3,453 2,409
Total 38,595 105,805
At 12/31/2001
57
4. Current assets
Movements in the inventory allowance accounts during the year were as follows:
Net inventories of 1,530 million euros at December 31, 2001 show a decrease of 25.0 million euros compared
to the prior year (1,555 million euros at December 31, 2000), the decrease is split as follows:
- gross inventories decrease of 8.3 million euros.
- allowance for inventory writedowns increase of 16.7 million euros.
Inventories
(thousand euros)
Gross Allowance Net Gross Allowance Net
Raw materials and supplies 387,975 (20,971) 367,004 411,120 (19,475) 391,645
Work in progressand semifinished products 208,493 (3,689) 204,804 210,597 (3,237) 207,360
Contract work in progress 5,910 — 5,910 1,787 — 1,787
Finished goodsand merchandise 860,164 (104,614) 755,550 850,537 (95,799) 754,738
Used stock 239,587 (48,257) 191,330 237,303 (42,329) 194,974
Advances to suppliers 5,454 — 5,454 4,577 — 4,577
Total inventories 1,707,584 (177,532) 1,530,052 1,715,921 (160,840) 1,555,081
At 12/31/2000At 12/31/2001
(thousand euros) At Increase Foreign Change in the At 12/31/2000 (Decrease) exchange area of 12/31/2001
effect consolidation
Allowance forinventories writedown 160,840 16,622 (910) 981 177,532
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
58 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
5. Receivables
An analysis of receivables by due date is as follows:
(thousand euros)
Due Due Total Due Due Totalwithin beyond within beyond
one year one year one year one year
Third parties 835,212 5,702 840,913 956,790 3,179 959,969
Unconsolidated subsidiaries — — — — — —
Other companies 168,145 — 168,145 169,865 — 169,865
Total trade receivables 1,003,357 5,702 1,009,059 1,126,655 3,179 1,129,834
Other receivables from:
Employees 10,089 1,433 11,522 13,480 1,683 15,163
Tax authorities 210,920 108,911 319,831 156,027 124,996 281,023
Social security contributions 2,675 23 2,698 2,056 — 2,056
Others:Third parties 123,500 2,605 126,105 108,646 5,709 114,355
Others: Unconsolidated subsidiaries 1,713 — 1,713 — — —
Others:Associated companies 8,319 — 8,319 12 — 12
Others: Parent companies — — — 61 — 61
Others: Other companies 13,151 — 13,151 7,756 674 8,430
Total other receivables 370,368 112,972 483,339 288,038 133,062 421,100
Total receivables 1,373,725 118,673 1,492,398 1,414,693 136,241 1,550,934
At 12/31/2000At 12/31/2001
59C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros) At Accruals Decrease and Change in At12/31/2000 other the area of 12/31/2001
changes consolidation
Allowance for doubtful accounts 115,106 41,613 (23,429) — 133,291
(thousand euros)
Trade Other Total Trade Other Total
Third parties 840,914 — 840,914 959,969 — 959,969
Unconsolidated subsidiaries — — — — — —
Other companies 168,145 — 168,145 169,865 — 169,865
Total trade receivables 1,009,059 — 1,009,059 1,129,834 — 1,129,834
Other receivables from:
Employees — 11,522 11,522 — 15,163 15,163
Tax authorities — 319,831 319,831 — 281,023 281,023
Social security contributions — 2,698 2,698 — 2,056 2,056
Others:Third parties — 126,105 126,105 — 114,355 114,355
Others: Unconsolidated subsidiaries — 1,713 1,713 — — —
Others:Associated companies — 8,319 8,319 — 12 12
Others: Parent companies — — — — 61 61
Others: Other companies — 13,151 13,151 — 8,430 8,430
Total other receivables — 483,339 483,339 — 421,100 421,100
Total receivables 1,009,059 483,339 1,492,398 1,129,834 421,100 1,550.934
Receivables are shown net of allowances for doubtful accounts of 133.3 million euros at December 31, 2001
(115.1 million euros at December 31, 2000).
Movements in these allowance accounts during the year were as follows:
Receivables from tax authorities principally refer to the Italian tax authorities for VAT and income taxes.
They also include the tax credit regarding the advance payments of income tax maturing on employee severance
indemnities paid by the Italian companies according to the Italian law: the related interest income receivable
referring to the current year is recorded in Financial income and expenses. Furthermore, they include the net
balance of deferred tax assets of 183.4 million euros (152.8 million euros at December 31, 2000), accounted for
according to the accounting principle was previously described.Additional information on these assets is provided
in reserve for risks and charges under Deferred income tax reserve.
The decrease in trade receivables is mainly due to the higher level of securitization programs implemented and
to the reduction of overdue accounts.
At 12/31/2000At 12/31/2001
An analysis of receivables by nature is as follows:
60 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros)
Due Due Total Due Due Totalwithin beyond within beyond
one year one year one year one year
Third parties
Unconsolidated subsidiaries 2,455 — 2,455 448 — 448
Associated companies 28,932 — 28,932 29,879 — 29,879
Parent companies 33,284 689 33,973 44,551 — 44,551
Other companies 1,772,768 978,738 2,751,505 1,254,494 530,782 1,785,276
Total financial receivables 1,837,439 979,427 2,816,866 1,329,372 530,782 1,860,154
At 12/31/2000At 12/31/2001
Financial receivables amount to 2,816.9 million euros at December 31, 2001 (1,860.2 million euros at December
31, 2000) and show an increase of 956.7 million euros mainly related to higher level of activity of Transolver
financial companies, and to the temporary investments of liquidity on the Group Central Treasury. They are
shown net of an allowance for doubtful accounts of 22.7 million euros (16.4 million euros at December 31, 2000).
Movements in these allowance accounts during the year were as follows:
6. Financial assets not held as fixed assets
Securities
The caption includes an amount of 49,696 million euros (9,853 million euros as of December 31, 2000) of
marketable securities held as temporary investment of liquidity in Irisbus Group.
Financial Receivables
(thousand euros) At Increase Decrease and At12/31/2000 other 12/31/2001
changes
Allowance for doubtful accounts 16,366 7,416 (1,047) 22,735
The increase in item “Bank and post office account” is due to a grater level of cash in Iveco UK companies.
Cash recorded in the financial statements at December 31, 2001 and 2000 is in line with the fair value of the
respective periods.
7. Cash
(thousand euros) At 12/31/2001 At 12/31/2000
Bank and post office accounts 351,310 233,265
Checks 774 814
Cash on hand 3,491 2,526
Total cash and cash equivalent 355,575 236,605
61C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
9. Stockholders’ equity
(thousand euros) Paid-up Share Accumulated Accumulated Totaland premium translation results and other
called-up reserve differences reserves, net incomecapital for the year
Balance at January 1, 2000 1,179,440 13,067 (235,569) 860,570 1,817,508
Translation differences — — 17,055 — 17,055
Other movements — — — (3,015) (3,015)
Result of the year — — — 146,257 146,257
Dividend paid — — — (64,100) (64,100)
Balance at December 31, 2000 1,179,440 13,067 (218,514) 939,712 1,913,705
Translation differences — — (20,941) — (20,941)
Other movements — — — (1,422) (1,422)
Result of the year — — — (124,578) (124,578)
Dividend paid — — — (64,100) (64,100)
Balance at December 31, 2001 1,179,440 13,067 (239,455) 749,612 1,702,664
Share capital
At December 31, 2001 the authorized share capital amounted to 100,000,000 shares of Euro 46 (Euro in units)
of which 25,640,000 were issued and fully paid up.
Accumulated translation differences
They represent the cumulative difference arising on the translation of the equity of the consolidated companies
whose financial statements were prepared in foreign currencies.
Accumulated results and other reserves
Other reserves include surpluses arising on the tangible fixed asset revaluations recorded in past years
particularly in Italy under specific local laws and practices. The residual net book value of these surpluses is
disclosed in note 2. Under Italian law the surplus can be utilized to cover losses but in case of distribution it may
attract the taxation from which it was exempt on constitution.
8. Accrued income and prepaid expenses
(thousand euros) At 12/31/2001 At 12/31/2000
Commercial accrued income
Accrued interest and commissions 1,258 5,307
Other 8,564 5,569
Total commercial accrued income 9,822 10,876
Commercial prepaid expenses
Interest 745 2,153
Other 6,222 16,721
Total commercial prepaid expenses 6,967 18,874
Financial accrued income 2,527 4,608
Financial prepaid expenses 12,547 1,381
Total accrued income and prepaid expenses 31,863 35,739
62 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros) Net equity Net profit Net equity Net profitAt 12/31/2001 2001 At 12/31/2000 2000
Statutory financial statements Iveco NV 2,110,184 (163,057) 2,307,207 124,211
Different valuation methodon tangible fixed assets (407,520) 38,479 (393,502) 22,046
Consolidated financial statements Iveco NV 1,702,664 (124,578) 1,913,705 146,257
The minority interest in stockholders' equity refers to the following companies consolidated on a line-by-line basis:
Dividend
The Shareholders decided on December 4, 2001 to distribute an amount of Euro 2.50 (Euro in units) per share as
interim dividend for the year 2001.This dividend amounting to 64.1 million euros, was paid on December 21, 2001.
Distributable results
The amount of accumulated net profit which is available for distribution is established in the official accounts of
Iveco NV, a copy of which is filed at the Amsterdam Chamber of Commerce.
The reconciliation to Stockholders' equity and net income of the parent company Iveco NV is as follows:
2001 2000% held by % held byminority minority
shareholders shareholders
Companies:
Amce, Ethiopia 30.00 30.00
Componentes Mecanicos, Spain 40.61 40.61
Iveco Eurofire (Holding), Germany — 15.00
Lohr Magirus,Austria 5.00 19.25
Iveco Fiat Brasil, Brasil 50.00 50.00
Transolver Finance EFC, Spain 50.00 —
Transolver Services, France 90.00 90.00
Ikarusbus, Hungary 23.47 23.47
Rhein Main, Germany 35.00 35.00
Minority interest
(thousand euros) 2001 2000
Balance at January 1 70,123 139,093
Changes during the year:
Change in consolidation area 4,835 (89,812)
Result of the year 1,758 341
Translation differences (2,737) (1,262)
Capital increase — 23,668
Dividends paid (1,678) (1,075)
Other movements (6,524) (830)
Balance at December 31 65,777 70,123
During the year 2001 Iveco Group has acquired the further 15% in Iveco Eurofire (Holding) from third parties.
63C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
The increase of the item "Other reserves" is mainly due to restructuring reserves that include the costs for
reorganisation and restructuring plans.
As indicated in the accounting principles, starting from 2001, in order to improve the presentation of the effect
deriving from the actuarial gains or losses relating to Pension Plans, the Group shifts to the corridor approach,
allowed by IAS 19, from the "immediate recognition" methodology applied in previous years.
The above change produced a net positive impact on the result of the year and on the shareholder's equity as of
December 31, 2001 of 20 million euros, including the effect of the restatement of the previous year financial
statements, accounted for in the caption Extraordinary expenses, as requested by the Italian GAAP.
Income tax reserves
The Deferred income tax reserve at December 31, 2001 includes deferred tax liabilities, net of deferred tax
assets, which have been offset where possible, in reference to the individual companies in consolidation. The
Deferred income tax reserve, net of Deferred tax assets recorded under Other receivables from others, is
composed as follows:
10. Reserves for risks and charges
(thousand euros) At 12/31/2001 At 12/31/2000 Change
Reserve for pension and similar obligations 149,293 158,332 (9,039)
Income tax reserves
Current income tax reserve 10,169 12,474 (2,305)
Deferred income tax reserve 165,785 184,438 (18,652)
Total income tax reserves 175,955 196,912 (20,957)
Other reserves
Warranty reserve 165,596 164,043 1,552
Restructuring reserves 55,115 24,045 31,070
Buy back reserve 86,352 80,121 6,231
Various liabilities and risk reserves 248,571 188,977 59,594
Total other reserves 555,633 457,186 98,448
Total reserves for risks and charges 880,881 812,430 68,451
(thousand euros) At 12/31/2001 At 12/31/2000 Change
Deferred income tax reserve 165,785 184,438 (18,653)
Deferred tax assets (183,430) (152,767) (30,663)
Total (17,645) 31,671 49,316
Deferred tax assets are included in Other receivables from tax authorities (see note 5).
64 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
The Deferred income tax reserve, net of Deferred tax assets recorded under Other receivables from others, can
be analyzed as follows:
The item 'Other' mainly includes the warranty reserve and other taxed provisions.
The Deferred tax reserve includes 100 million euros (94 million euros at December 31, 2000) of tax benefits
connected to tax loss carryforwards.
Other reserves
The various liabilities and risk reserves amount to 248.6 million euros at December 31, 2001 (189.0 million euros
at December 31, 2000) and represent the amounts set aside by individual companies of the Group principally in
connection with contractual and commercial risks and disputes.
(thousand euros) At 12/31/2001 At 12/31/2000
Deferred tax liabilities for:
Accelerated depreciation 228.703 223,885
Deferred tax on gains 21.326 11,444
Capital investment grants 1.061 1,659
Other 60.871 58,581
Total deferred tax liabilities 311.961 295,569
Deferred tax assets for:
Reserves for risks and taxed charges 87.238 64,044
Inventories 25.915 23,974
Taxed allowance for doubtful accounts 35.754 16,344
Pension funds 4.672 3,765
Other 90.646 98,847
Total deferred tax assets 244.225 206,974
Theoretical tax benefit connectedto tax loss carryforwards 156.263 216,800
Adjustments for assets whose recoverability is uncertain(mainly tax loss carryforwards) (70.882) (159,876)
Total deferred income tax reserve, net of Deferred tax assets (17.645) 31,671
65C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
11. Reserve for employee severance indemnities
12. Payables
Payables may be analyzed by due date as follows:
(thousand euros) At Increase Decrease Change in the At 12/31/2000 and other area of 12/31/2001
changes consolidation
Reserve for employeeseverance indemnities 225,431 33,064 (45,146) — 213,349
The reserve for employee severance indemnities amounts to 213.3 million euros at December 31, 2001 (225.4
million euros at December 31, 2000) and reflects the severance indemnities accrued in favour of employees at
year-end by the companies in conformity with existing laws.
(thousand euros)
Due within Due beyond Of which Total Due within Due beyond Of which Totalone year one year due beyond one year one year due beyond
five years five years
Bonds — — — — 3,632 — — 3,632
Borrowings from banks 831,945 458,403 27,081 1,290,348 356,653 85,516 42,831 442,169
Other financial payables 1,678,311 1,149,551 372,125 2,827,862 1,082,787 1,238,345 25,783 2,321,132
Advances 58,264 82 — 58,347 40,283 63 — 40,346
Trade payables 2,192,889 19,827 — 2,212,717 2,238,827 27,179 — 2,266,006
Notes payable 19,490 36 — 19,526 17,406 242 — 17,648
Payables to unconsolidatedsubsidiaries 2,449 — — 2,449 141 — — 141
Payables to associatedcompanies 11,648 — — 11,648 4,016 — — 4,016
Payables to parentcompanies 5,356 — — 5,356 7,166 — — 7,166
Taxes payable 155,361 9,193 — 164,554 145,519 8,015 — 153,534
Social security payable 55,532 1,324 — 56,856 56,531 1,110 — 57,641
Other payables 119,479 6,212 — 125,691 157,178 7,076 — 164,254
Total payables 5,130,724 1,644,629 399,206 6,775,353 4,110,139 1,367,546 68,614 5,477,685
At 12/31/2000At 12/31/2001
66 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros)
Trade Financial Other Total Trade Financial Other Total
Bonds — — — — — 3,632 — 3,632
Borrowings from banks — 1,290,348 — 1,290,348 — 442,169 — 442,169
Other financial payables — 2,827,862 — 2,827,862 — 2,321,132 — 2,321,132
Advances — — 58,347 58,347 — — 40,346 40,346
Trade payables 2,212,717 — — 2,212,717 2,266,006 — — 2,266,006
Notes payable 11,204 8,321 — 19,525 10,329 7,319 — 17,648
Payables to unconsolidated
subsidiaries — 2,449 — 2,449 — 141 — 141
Payables to associated
companies 9,883 — 1,765 11,648 3,020 — 996 4,016
Payables to parent
companies 5,356 — — 5,356 36 — 7,130 7,166
Taxes payable — — 164,554 164,554 — — 153,534 153,534
Social security payable — — 56,856 56,856 — — 57,641 57,641
Other payables — — 125,691 125,691 — — 164,254 164,254
Total payables 2,239,160 4,128,980 407,213 6,775,353 2,279,391 2,774,393 423,901 5,477,685
At 12/31/2000At 12/31/2001
The increase in Payables (1,297.7 million euros) compared to December 31, 2000 is mainly due to the increase
in Financial payables of 1,354.6 million euros as a result of refinancing of the portfolio of the Transolver financial
companies.
The portion of medium and long-term financial payables due beyond one year amounts to 1,608.0 million euros
at December 31, 2001 (981.0 million euros at December 31, 2000).
The scheduled maturities are:
(thousand euros) 2003 2004 2005 2006 beyond 2006
Medium and long-term debtdue beyond one year 718,972 225,806 175,184 88,787 399,206
Payables may be analyzed by nature as follows:
67C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(thousand euros) Less than From 5% From 7.5% From 10% Greater Total
5% to 7.5% to 10% to 12.5% than 12.5%
Total 2001 mediumand long-term debt 1,005 436 104 22 50 1,618
Interest rates of medium and long-term debt, including the instalments expiring within the next year, at
December 31, 2001 are as follows:
Financial accrued expenses include interest expenses on financial payables and financial deferred income includes
deferred interest income.
13. Accrued expenses and deferred income
(thousand euros) At 12/31/2001 At 12/31/2000
Commercial accrued expenses
Accrued interest and commissions 27,270 27,102
Other 163,628 159,340
Total commercial accrued expenses 190,898 186,442
Commercial deferred income
Interest 1,902 2,426
Other 33,629 49,356
Total commercial deferred income 35,531 51,782
Financial accrued expenses 48,154 34,669
Financial deferred income 92,309 37,155
Total accrued expenses and deferred income 366,892 310,048
68 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
At December 31, 2001 Guarantees granted by the Iveco Group totaled 993 million euros (1,008 million euros
at December 31, 2000).
Other guarantees include commitments for receivables and bills discounted with recourse in the amount of
410.7 million euros (459.1 million euros at December 31, 2000). The volume of receivables discounted with
recourse in 2001 was 2,004.3 million euros (2,323.2 million euros in 2000).
Although not included in the memorandum accounts, receivables and bills discounted by the Group without
recourse having due dates beyond December 31, 2001 amounted to 1,183.0 million euros (in 2000, 1,273.4 million
euros with due dates beyond December 31, 2000).
14. Memorandum accounts
(thousand euros) At 12/31/2001 At 12/31/2000
Guarantees granted
Unsecured guarantees
Suretyships:
On behalf of unconsolidated subsidiaries
On behalf of associated companies
On behalf of others 226,288 220,095
Total suretyships 226,288 220,095
Guarantees of notes:
On behalf of others 107,879 19,022
Total guarantees of notes 107,879 19,022
Other unsecured guarantees:
On behalf of unconsolidated subsidiaries
On behalf of associated companies 50
On behalf of others 571,631 660,504
Total other unsecured guarantees 571,681 660,504
Total 905,848 899,621
Secured guarantees
On behalf of unconsolidated subsidiaries
On behalf of associated companies
On behalf of others 86,923 108,036
Total secured guarantees 86,923 108,036
Total guarantees granted 992,772 1,007,657
69C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Commitments
Commitments amounted to 1,802 million euros as December 31, 2001 (1,527 million euros at December 31, 2000)
and the increase is principally due to commitments to "Off-balance sheet instruments-interest rate risk group"
of Fraikin group.
Commitments for buy back for the amount of 654 million euros as December 31, 2001 (610 million euros at
December 31, 2000) represent the repurchase value stipulated in the contract for vehicles sold under this kind
of sales scheme.
There are also some commitments for contracts to hedge foreign exchange risks of 363.4 million euros (428.9
million euros at December 31, 2000).
Such transactions, reflecting the notional principal amount, should not be subject to risks owing to non-fulfillment
by the counterparties insofar as the contracts are mainly entered into with Fiat Group's financial companies and
with several primary financial institutions. The contracts outstanding at December 31, 2001 will expire during
2002. The consolidated statement of operations includes the effects both of the contracts that expired in 2001
and the accruals for the contracts expiring after December 31, 2001 as stated in the accounting principles.
The Iveco Group’s financial policy attaches particular importance to the management and control of financial risks
in that they can significantly impact profits. The Group has adopted a series of guidelines regarding the
management of exchange rate and interest rate exposure.
The Group’s policy allows off-balance sheet financial instruments to be used only for managing exchange and
interest rate risks connected to monetary flows and assets and liabilities, and not for speculative purposes.
In 2001, foreign exchange risk management followed the aforementioned policy and maintained the character of
selectivity. The reduction in exchange exposure, substantially originating from the positive balance between
exports and imports, was based on the expected trend in exchange rates and the need to hedge the exchange
levels of reference without completely foregoing the benefits deriving from a favorable trend in the rates.
Also this year, the management of exchange risks was again based principally on a combination of currency options.
Finally, the European Union issued Directive 2000/53/CE relative to end-of-life-vehicles. This Directive, among
other things, provides that, in the future, vehicles manufacturers will have to bear all, or a significant part of the
cost arising from the collection, treatment and recovery of end-of-life vehicles. The above Directive should be
introduced into the national legislation of the individual member states by April 2002 and would become
applicable for all vehicles placed on the market starting from July 2002; beginning January 2007, instead, all vehicles
on the market will be covered, even those placed before July 2002.The Group is still evaluating the effect would
could arise national laws introducing this Directive, but in the absence of certain or reliable elements as to the
quantification of future expenses that will eventually be borne by the Group, no provision has been set aside in
the consolidated financial statements at December 31, 2001.
70 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
15.Value of Production
Revenues from sales and services and change in contract work in progress
Revenues from sales and services and change in contract work in progress amounted to 8,650.1 million euros in
2001 compared to 8,611.0 million euros in 2000.They include revenues from sales and services of 8,646.3 million
euros (8,610.7 million euros in 2000) and the change in contract work in progress of 3.7 million euros (0.3
million euros in 2000).
Capital gains from the sale of fixed assets of 40.8 million euros (156.4 million euros in 2000) of which 16.4
million euros are due to disposals regarding land & building of Iveco Mezzi Speciali and 8.1 million euros due
to the renewal of "vehicles under operating leases" in Fraikin group. Other income includes sundry income and
income which cannot be classified as revenues from sales and services.
The caption includes royalties, refunds of customs and export duties, miscellaneous cost recoveries.
Other income and revenues
(thousand euros) At 12/31/2001 At 12/31/2000
Revenue grants 5,352 6,074
Capital gains 40,761 156,368
Investment grants 1,245 3,225
Other income 249,782 279,155
Total other income and revenues 297,141 444,822
Net revenues by area of destination may be analyzed as follows:
(thousand euros) At 12/31/2001 At 12/31/2000
Italy 2,687,741 2,752,549
Europe (excluding Italy) 5,090,773 4,862,229
Mercosur and Central and South America 277,150 283,608
North America 3,638 10,400
Other areas 590,789 702,229
Total revenues from sales and servicesand change in contract work in progress 8,650,091 8,611,015
71C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
16. Cost of Production
The costs of production amount to 8,910.5 million euros (8,770.2 million euros in 2000), an increase of 1.1% compared
to 2000.The main components of this item and the changes that occurred during the year can be described as follows:
Raw materials, supplies and merchandise
Raw materials, supplies and merchandise amount to 4,995.2 million euros (5,130.2 million euros in 2000), a
decrease of 2.6% compared to 2000.The total is equal to 57.8% of revenues (59.6% in 2000).
Services
Services amount to 1,367.1 million euros (1,221 million euros in 2000), an increase of 12.0% compared to 2000.
This amount is equal to 15.8% of revenues (14.2% in 2000). Services include advertising costs, outside information
technology and telecommunication service costs, maintenance costs and transportation costs.
Leases and rental
The caption includes rental costs for 174,9 million euros (97,0 million euros in 2000) and, according to the Italian
regulations, the operating leases costs, included those carried out by Fraikin’s companies following the
securitization of the fleet, of 55,6 million euros.
Personnel
Personnel costs consist of the following:
Personnel costs, which amount to 1,336.9 million euros in 2001, are equal to 15.5% of revenues (15.8% in 2000).
The decrease is principally due to a reduction in the average number of employees (-363 units) in 2001
compared to 2000.
An analysis of the average number of employees by category is provided as follows:
Companies Companies Total Companies Companies Totalconsolidated on consolidated by consolidated on consolidated by
a line-by-line proportional a line-by-line proportionalbasis method basis method
Average number of employees
Managers 354 39 393 410 32 442
White-collar 9,677 1,793 11,470 9,653 1,615 11,268
Blue-collar 20,344 3,557 23,901 21,004 3,413 24,417
Total 30,375 5,389 35,764 31,067 5,060 36,127
Number of emloyeesas of 12/31/2001 29,934 5,406 35,340 30,466 5,386 35,852
At 12/31/2000At 12/31/2001
(thousand euros) At 12/31/2001 At 12/31/2000
Salaries and wages 1,000,225 1,016,045
Social security contributions 253,369 268,169
Employees severance indemnities 33,064 40,239
Employees pension and similar obligations 23,706 16,555
Other costs 26,561 18,018
Total personnel costs 1,336,926 1,359,026
72 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Provisions for risks
Provisions for risks of 305.6 million euros in 2001 (264.0 million euros in 2000) mainly relate to other reserves
connected to industrial risks.
Further details on such caption are shown in the Balance Sheet section.
Dividends were mainly received from minority investment valued at costs.
Tax credit on dividends is related to the dividends paid to Iveco Spa by Astra, Elasis and Cemat.
Other financial income - expenses
The following analyses of “Other financial income” and “Interest and other financial expenses” present the
amounts shown in the related captions on the statement of operations and also the amounts of income and
expenses of the Group’s financial companies presented in the captions on the statement of operations under
“Revenues from sales and services” and “Interest and other expenses of Financial Services Companies”, respectively.
The last line in the table shows “other financial income” and “interest and other financial expenses” as shown
on the statement of operations, excluding the financial activities. Customer interest and lease income increase is
due to the higher level of business of financial activities in 2001.
The increase in financial expenses is due to the higher average indebtedness especially related to Latin America
indebtedness (in particular for Brazil and Argentina).
Other operating costs
(thousand euros) At 12/31/2001 At 12/31/2000
Loss on sale of fixed assets 32,691 3,368
Indirect and other taxes 54,132 56,856
Sundry expenses 123,039 168,499
Total other operating costs 209,862 228,723
17. Financial income and expenses
Investment income
(thousand euros) At 12/31/2001 At 12/31/2000
Dividends 70 109
Tax credit on dividends 11,901 —
Gain on sale of investments classified within current assets — —
Total investment income 11,971 109
73C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Interest and other financial expenses
(thousand euros) At 12/31/2001 At 12/31/2000
Interest and other financial expenses:
Unconsolidated subsidiaries 8 4
Associated companies 44 12
Parent companies 268 39
Others:
Bond interest 72 23
Bank interest 10,668 13,173
Interest on trade and other payables 27,267 7,024
Interest on notes payable 779 241
Discounts and other expenses 143,856 138,615
Expenses from off-balance sheet financial instruments 34,429 33,484
Interest to other financial institutions 123,018 110,606
Loss on sale of securities — —
Foreign exchange losses, net 59,930 84,311
Total interest and other financial expenses - other 400,020 387,477
Total interest and other financial expenses 400,339 387,532
of which:
Interest and other financial expenses, excluding financial activities 317,369 345,109
(thousand euros) At 12/31/2001 At 12/31/2000
Other financial income from:
Receivables from others held as fixed assets 651 383
Securities held as fixed assets other than equity investments 261 25
Securities held as current assets other than equity investments 193 637
Other income from:
Unconsolidated subsidiaries 33 —
Associated companies — —
Third companies — —
Others:
Bank and other interest 3,196 4,913
Customer interest and lease income 169,514 130,253
Discounts and other income 47,066 45,803
Income from off-balance sheet financial instruments 32,062 5,479
Foreign exchange gains, net 49,633 79,185
Total from others 301,472 265,633
Total other income 301,505 265,633
Total other financial income 302,610 266,678
of which:
Other income, excluding financial activities 159,927 200,530
74
Revaluations and writedowns of equity investments include the share of the net income and losses of companies
accounted for using the equity method.
The writedown of equity investments in 2001 is mainly due to the consolidation at equity method of the
company named E.E.A. (European Engine Alliance Scrl).
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
18. Adjustments to financial assets
(thousand euros) At 12/31/2001 At 12/31/2000
Revaluations:
Equity investments 5,249 7,981
Financial fixed assets other than equity investments — —
Securities among current assets other than equity investments — —
Total revaluations 5,249 7,981
Writedowns:
Equity investments 8,197 14,362
Financial fixed assets other than equity investments 2 9
Securities among current assets other than equity investments — —
Provisions for doubtful financial credits — 35
Total writedowns 8,199 14,406
Total adjustments to financial assets (2,950) (6,425)
75C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
The increase in other extraordinary expenses is mainly due to the provision for reorganisation and restructuring
plans of some subsidiaries located in Europe and South America.
Income taxes paid by the Iveco Group in 2001 approximately amounted to 43.5 million euros.
20. Income taxes
Income taxes recorded in the consolidated statement of operations in 2001 and 2000 are as follows:
(thousand euros) At 12/31/2001 At 12/31/2000
Current taxes:
IRAP 29,587 30,202
Other taxes 30,758 85,251
Current taxes 60,345 115,453
Deferred taxes (49,159) 14,797
Total income taxes 11,186 130,250
19. Extraordinary income and expenses
(thousand euros) At 12/31/2001 At 12/31/2000
Extraordinary income
Gains on disposals of investments and other fixed assets 339 464
Other income:
Prior period income 63 442
Other income 2,629 26,531
Total other income 2,692 26,973
Total extraordinary income 3,030 27,437
Extraordinary expenses
Losses on disposals of investments and other fixed assets 1,252 4,693
Taxes related to prior years 551 1,269
Other expenses:
Extraordinary accruals 114,359 24,484
Other extraordinary expenses 119,149 54,264
Prior period expenses 1,600 4,142
Total other expenses 235,107 82,890
Total extraordinary expenses 236,911 88,852
Total extraordinary income and expenses (233,880) (61,415)
76 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
The item 'Services and Financial Companies' includes: Transolver Financial and Services Companies, Fraikin
Group and Iveco Participations.
21.Other information
Segment information - Business segments
Operating Services Elimin. TotalYear ended Companies and Financial Interco. GroupDecember 31, 2001 Companies
Revenues 12,785.4 792.2 (4,927.5) 8,650.1
Segment result
Operating profit 202.7 68.0 — 270.7
Financial cost (135.9) (21.5) — (157.4)
Share results non-cons. invest. 9.0 — — 9.0
Profit from ordinary activities 75.8 46.5 — 122.3
Extraordinary item (232.3) 13.6 (15.2) (233.9)
Profit before tax (156.5) 60.1 (15.2) (111.6)
Tax 8.2 (19.4) — (11.2)
Income before minority interest (148.3) 40.7 (15.2) (122.8)
Minority interest 1.8 — — 1.8
Net income (146.6) 40.7 (15.2) (121.1)
Total consolidated assets 12,178.6 4,019.9 (6,193.6) 10,004.9
Total consolidated liabilities 6,932.5 3,323.1 (2,019.1) 8,236.5
Equity 5,246.1 696.8 (4,174.5) 1,768.4
Capital expenditure 374.6 343.7 — 718.3
Depreciation 206.5 137.3 — 343.8
Amortization 44.0 22,2 — 66.2
(million euros)
77C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
(million euros) Operating Services Elimin. TotalYear ended Companies and Financial Interco. GroupDecember 31, 2000 Companies
Revenues 12,917.9 598.5 (4,905.4) 8,611.0
Segment result
Operating profit 434.4 54.8 — 489.2
Financial cost (113.5) (31.0) — (144.5)
Share results non-cons. invest. (6.4) — — (6.4)
Profit from ordinary activities 314.5 23.8 — 338.3
Extraordinary item (61.4) (0.1) — (61.5)
Profit before tax 253.1 23.7 — 276.8
Tax (117.7) (12.5) — (130.2)
Income before minority interest 135.4 11.2 — 146.6
Minority interest 1.1 (1.4) — (0.3)
Net income 136.4 9.8 — 146.2
Total consolidated assets 11,509.8 2,719.5 (5,419.9) 8,809.4
Total consolidated liabilities 6,491.7 2,108.0 (1,729.1) 6,870.6
Equity 5,018.1 611.5 (3,690.8) 1,983.8
Capital expenditure 336.7 319.1 — 655.8
Depreciation 205.2 159.2 — 364.4
Amortization 54.7 3.8 — 58.5
78 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
REPORT OF THE INDIPENDENT AUDITORS
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 79
TEN-YEAR HIGHLIGHTS (*)
2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
Commercial data
Sales of trucks, buses and special vehicles (units) 160,397 164,776 149,903 136,824 124,162 119,697 124,835 101,217 90,830 115,433
Engines production (units) 413,222 457,745 404,917 363,089 292,268 274,438 330,169 244,174 206,333 247,694
Western European truck marketshare GVW >= 3.5 tonnes (%) 17.0 17.8 16.6 17.0 18.4 20.0 19.1 19.8 20.1 19.4
Financial data (millions euros)
Net sales 8,646.3 8,610.7 7,386.2 6,649.5 5,913.8 5,324.7 4,954.5 4,310.0 3,828.3 5,143.1
Operating income 270.7 489.1 311.1 261.5 204.2 154.7 247.8 139.2 (159.7) (104.3)
Net profit (124.6) 146.2 162.7 200.5 176.4 124.5 190.5 14.1 (268.5) (47.0)
Cash flow (net profit plus depreciation and amortisation) 285.5 569.2 415.8 376.4 378.2 324.8 363.4 202.1 (62.9) 208.4
Tangible fixed assets as at December 31 2,286.7 2,278.9 2,305.2 1,541.3 1,465.8 1,423.0 1,300.8 1,369.8 1,530.7 1,657.3
Net financial resources (indebtedness) as at December 31 (210.9) (222.6) (402.2) (67.8) 194.4 (54.0) 44.2 (236.5) (822.2) (686.9)
Group Shareholders' equity as at December 31 1,702.7 1,913.7 1,817.5 1,685.8 1,626.2 1,496.3 1,362.9 1,197.2 874.7 1,216.4
Ratios (%)
Operating income / Net sales 3.1 5.7 4.2 3.9 3.5 2.9 5.0 3.2 (4.2) (2.0)
Net profit / Net sales (1.4) 1.7 2.2 3.0 3.0 2.3 3.8 0.3 (7.0) (0.9)
Cash flow / Net sales 3.3 6.6 5.6 5.7 6.4 6.1 7.3 4.7 (1.6) 4.1
Other data
Gross additions to tangible fixed assets (million euros) 718.3 655.8 359.5 306.7 268.5 243.5 148.5 112.7 159.7 276.7
of which: under operating leases(millions euros) 348.3 306.1 60.7 12.4 — — — — — —
Gross additions / Net sales (%) 8.3 7.6 4.9 4.6 4.5 4.6 3.0 2.6 4.2 5.4
Research and development expenses (million euros) 214.9 226.5 214.6 200.5 188.3 189.6 153.5 136.8 164.8 215.0
Research and development expenses / Net sales (%) 2.5 2.6 2.9 3.0 3.2 3.6 3.1 3.2 4.3 4.2
Number of employees as at December 31 35,340 35,852 36,217 31,912 32,074 32,448 33,390 31,510 33,715 37,073
(*) All figures referring to 1997 and previous years have been calculated using the official exchange rate as at
December 31, 1998: 1 Euro equal to 2.204 Netherlands Guilder
80 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Companies consolidated on a line-by-line basis
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
Iveco NV Amsterdam Netherlands1,179,440,000.00 EURO 100.000 IHF-Int.-Hold. Fiat SA 55.285Fiat SpA 44.715
2H Energy Fecamp France 2,000,000.00 EURO 100.000 Iveco Aifo SpA 100.000
Amce - Automotive Manuf. Co. Ethiopia Addis Ababa Ethiopia 3,000,000.00 ETB 70.000 Iveco NV 70.000
Astra VI SpA Piacenza Italy 10,400,000.00 EURO 100.000 Iveco SpA 100.000
Bedrijswagen Service Nijmegen BV Nijmegen Netherlands 100,000.00 NLG 100.000 Iveco Nederland BV 100.000
Brandschutztechnik Gorlitz GmbH Gorlitz Germany 1,000,000.00 DEM 88.000 Iveco Magirus Brand. GmbH 88.000
BV Rimij Apeldoorn Netherlands 10,000.00 NLG 100.000 Iveco Nederland BV 100.000
Camiva SA Saint-Alban-Leysse France 1,870,168.50 EURO 99.963 Iveco Eurofire (Holding) GmbH 99.963
CBW Grundstucksver. GmbH ODS KG Ulm Germany 10,000.00 DEM 100.000 Iveco Investitions GmbH 95.000Iveco NV 5.000
Componentes Mecanicos SA Barcelone Spain 37,405,038.00 EURO 59.387 Iveco Pegaso SA 59.387
Effe Grundbesitz GmbH Ulm Germany 20,000,000.00 DEM 100.000 Iveco Investitions GmbH 90.000Iveco NV 10.000
Equip' Lev Srl Antibes France 50,600.00 EURO 99.940 Lev SA 100.000
Euromoteurs SA Garchizy France 915,000.00 EURO 100.000 Iveco France SA 100.000
Fiat Capital Corporation New Castle United States 0.10 USD 100.000 Iveco Trucks of NA Inc. 100.000
FL Maintenance Société Anonyme Levallois Perret France 40,000.00 FRF 99.940 Locamion Société Anonyme 100.000
Fraikin Alquiler de Vehiculos SA Barcelone Spain 1,803,000.00 EURO 100.000 Fraikin Société Anonyme 100.000
Fraikin Belgium Sociéte Anonyme Bruxelles Belgium 2,974,722.30 EURO 100.000 Fraikin Sociéte Anonyme 100.000
Fraikin Belgium Truck Renting Société Anonyme Bruxelles Belgium 9,048,113.65 EURO 99.940 Locamion Société Anonyme 99.997Fraikin Société Anonyme 0.003
Fraikin Limited Langley Great Britain 2,710,000.00 GBP 100.000 Fraikin Société Anonyme 100.000
Fraikin Locatime Société Anonyme Levallois Perret France 3,754,080.00 EURO 100.000 Fraikin Société Anonyme 100.000
Fraikin Locamion Société Anonyme Levallois Perret France 23,071,328.00 EURO 100.000 Fraikin Société Anonyme 92.929Locamion Société Anonyme 7.071
Fraikin - Lux SA Walferdange Luxembourg 142,166.94 EURO 100.000 Fraikin Société Anonyme 97.303Fraikin Belgium Truck Renting SA 2.697
Fraikin SA (Suisse) Romont Switzerland 1,000,000.00 CHF 100.000 Fraikin Société Anonyme 100.000
Fraikin Société Anonyme Cannes France 50,329,643.00 EURO 100.000 Iveco Participations SA 100.000
IAV Industrie-Anlagen-Verpachtung GmbH Ulm Germany 50,000.00 DEM 100.000 Iveco Investitions GmbH 95.000Iveco NV 5.000
Immobilière Fraikin Société Anonyme Cannes France 4,634,720.00 EURO 100.000 Fraikin Société Anonyme 100.000
Ind.Vehic. Center Brabant/Antwerpen NV St. Pieters Leeuw Belgium 37,380,000.00 BEF 100.000 Iveco Belgium SA/NV 99.732Iveco Nederland BV 0.268
Ind.Vehic. Center Hainaut SA Charleroi Belgium 600,000.00 EURO 100.000 Iveco Belgium SA/NV 95.000Iveco Nederland BV 5.000
Interoto France Location GEIE Levallois Perret France 0 FRF 99,97 Locamion Société Anonyme 25.000Fraikin Locamion Société Anonyme 25.000Fraikin Locatime Société Anonyme 25.000
Lev Société Anonyme 25.000
IVC Nutzfahrzeuge AG Hendschiken Switzerland 3,500,000.00 CHF 100.000 Iveco (Schweiz) AG 100.000
THE COMPANIES IN THE IVECO GROUP
I V E C O N V C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 81
IVC Salzburg Ntz.GmbH Eugendorf Austria 36,336.42 EURO 100.000 Iveco Austria GmbH 100.000
IVC Vehicules industriels SA Morges Switzerland 1,200,00.00 CHF 100.000 Iveco (Schweiz) AG 100.000
IVC - Wien Ntz.GmbH Wien Austria 36,336.42 EURO 100.000 Iveco Austria GmbH 100.000
Iveco Aifo SpA Milan Italy 5,200,000.00 EURO 100.000 Iveco SpA 100.000
Iveco Argentina SA Cordoba Argentina 26,700,000.00 ARS 100.000 Iveco SpA 99.999Iveco NV 0.001
Iveco Austria GmbH Wien Austria 6,177,190.90 EURO 100.000 Iveco NV 100.000
Iveco Danmark A/S Kastrup Denmark 501,000.00 DKK 100.000 Iveco NV 100.000
Iveco Eurofire (Holding) GmbH Weisweil Germany 60,194,300.00 DEM 100.000 Iveco Magirus AG 90.032Iveco SpA 9.968
Iveco Fiat Brasil Ltda Sete Lagoas Brazil 110,100,000.00 BRL 50.000 Iveco SpA 47,800Iveco Mercosul Ltda 2.200
Iveco Finance Ltd Watford Great Britain 100.00 GBP 100.000 Iveco UK Ltd 100.000
Iveco Finance Luxembourg SA Luxembourg Luxembourg 12,252,065.83 EURO 100.000 Iveco NV 100.000
Iveco Finland OY Espoo Finland 1,000,000.00 FIM 100.000 Iveco NV 100.000
Iveco Ford Truck Ltd *Watford Great Britain 117,000,000.00 GBP 84.820 Iveco UK Ltd 84.821
Iveco Ford Truck Pension Trustee Ltd Watford Great Britain 2.00 GBP 92.410 Iveco Ford Truck Ltd 50.000Iveco UK Ltd 50.000
Iveco France SA Trappes France 93,800,000.00 EURO 100.000 Iveco NV 51.220Iveco SpA 48.780
Iveco Investitions GmbH Ulm Germany 5,000,000.00 DEM 100.000 Iveco Magirus AG 99.020Iveco NV 0.980
Iveco Latin America Ltda Sao Paulo Brazil 266,000,000.00 BRL 100.000 Iveco SpA 99.999Iveco NV 0.001
Iveco LKW-Zentrum Sachsen GmbH Dresda Germany 2,000,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Magirus AG Ulm Germany 492,000,000.00 DEM 100.000 Iveco NV 51.341Iveco SpA 48.659
Iveco Magirus Brandschutztechnik GmbH Ulm Germany 12,700,000.00 DEM 100.000 Iveco Eurofire (Holding) GmbH 99.998Iveco NV 0.002
Iveco Mezzi Speciali SpA Brescia Italy 3,120,000.00 EURO 100.000 Iveco Eurofire (Holding) GmbH 100.000
Iveco Motorenforschung AG Arbon Switzerland 4,600,000.00 CHF 100.000 Iveco SpA 60.000Iveco France SA 40.000
Iveco Nederland BV Amersfoort Netherlands 10,000,000.00 NLG 100.000 Iveco NV 100.000
Iveco Nordbayern Ntz. GmbH Nurnberg Germany 1,450,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Nord Ntz. GmbH Hambourg Germany 1,600,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Norge AS Voyenenga Norway 500,000.00 NOK 100.000 Iveco NV 100.000
Iveco Ntz. GmbH Berlin-Brandeburg Berlin Germany 2,150,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Ntz. GmbH Hannover - Braunschweig Hannover Germany 1,550,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Ntz. Nord - West GmbH Dortmund-Wambel Germany 2,650,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Otomotiv A.S. Nisantasi Turkey 1,957,763,000,000.00 TRL 99.993 Iveco SpA 99.993
Iveco Participations SA Trappes France 250.000.000,00 EURO 100,000 Iveco SpA 80.000Iveco NV 20.000
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
82 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Iveco Pegaso SL Madrid Spain 105,213,628.00 EURO 100.000 Iveco NV 100.000
Iveco Plan SA Buenos Aires Argentina 153,000.00 ARS 100.000 Iveco Argentina SA 99.600Iveco SpA 0.400
Iveco Poland Ltd Warsaw Poland 13,866,350.00 PLN 100.000 Iveco NV 100.000
Iveco Portugal Ltda Villa Franca de Xira Portugal 15.961,532.71 EURO 100.000 Iveco NV 99.999Iveco SpA 0.001
Iveco Rhein - Ruhr Ntz. GmbH Dusseldorf Germany 1,500,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco Rhein - Sieg Ntz. GmbH Koln Germany 1,750,000.00 DEM 100.000 Iveco Magirus AG 100.000
Iveco (Schweiz) AG Kloten Switzerland 9,000,000.00 CHF 100.000 Iveco NV 100.000
Iveco South Africa Ltd Wadeville South Africa 15,000,750.00 SAR 100.000 Iveco NV 100.000
Iveco SpA Turin Italy 322,400,000.00 EURO 100.000 Iveco NV 100.000
Iveco Sud-West Ntz. GmbH Mannheim-Neckarau Germany 1,533,900.00 EURO 100.000 Iveco Magirus AG 100.000
Iveco Sweden A/B Arlov Sweden 600,000.00 SEK 100.000 Iveco NV 100.000
Iveco Trucks Australia Ltd Dandenong Australia 47,492,260.00 AUD 100.000 Iveco NV 100.000
Iveco Trucks of North America Inc Wilmington United States 1,00 USD 100.000 Iveco NV 100.000
Iveco (UK) Ltd Watford Great Britain 47,000,000.00 GBP 100.000 Iveco NV 67.723Iveco SpA 32.277
Iveco Venezuela CA La Victoria Venezuela 2,495,691,000.00 VEB 100.000 Iveco NV 100.000
Lev Sociéte Anonyme Levallois Perret France 9,165,168.00 EURO 99.940 Locamion Sociéte Anonyme 100.000
Locamion Sociéte Anonyme Levallois Perret France 10,900,064.00 EURO 99.940 Fraikin Sociéte Anonyme 99.940
Loca-Pel Srl Antibes France 75,900.00 EURO 99.940 Lev SA 100.000
Lohr-Magirus Feuerwehrtechnik GmbH Lassnitzhohe Austria 1,271,774.60 EURO 95.000 Iveco Magirus Brand. GmbH 95.000
Lyon Vehicules Industriéls SAS Saint Priest France 915,000.00 EURO 100.000 Iveco France SA 99.999Iveco NV 0.001
Mediterranéa de Camiones SL Valencia Spagna 48,080.00 EURO 100.000 Iveco Pegaso SA 100.000
Officine Brennero SpA Trento Italy 3,120,000.00 EURO 100.000 Iveco NV 100.000
Rhein-Main Ntz.GmbH Reichold & Partner Frankfurt Germany 1,800,000.00 DEM 65.000 Iveco Magirus AG 65.000
SA Iveco Belgium /NV Zellik Belgium 6,000,000.00 EURO 100.000 Iveco NV 99.950Iveco SpA 0.050
SCI La Mediterraneenne Vitrolles France 248,000.00 EURO 100.000 Soc.Dif.Veh.Ind.SDVI SA 50.000Iveco France SA 50.000
Seddon Atkinson Spares & Services Ltd Oldham Great Britain 20,000.00 GBP 100.000 Seddon Atkinson Vehicles 100.000
Seddon Atkinson Vehicles Ltd Oldham Great Britain 41,700,000.00 GBP 100.000 Iveco UK Ltd 100.000
SELTRA Bezons France 2,598,864.00 EURO 100.000 Fraikin Sociéte Anonyme 100.000
Service Lorrain VI SAS Ludres France 699,200.00 EURO 100,000 Iveco France SA 99.500Iveco NV 0.500
Sicca SpA Modena Italy 5,300,000.00 EURO 100,000 Iveco SpA 100.000
SIMIS Sociéte Anonyme Saint-Alban-Leysse France 40,015.50 EURO 98.000 Camiva SA 98.000
Société Civile Immobiliere Cles Amiens France 33,600.00 EURO 100.000 Immobiliere Fraikin SA 99.905Fraikin Sociéte Anonyme 0.095
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
T H E C O M P A N I E S I N T H E I V E C O G R O U P 83
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
Société Civile Immobiliere Des Cars Bleus Levallois Perret France 90,000.00 EURO 99.940 Locamion Sociéte Anonyme 99.833Immobiliere Fraikin SA 0.167
Société Civile Immobiliere Les Boussenot Levallois Perret France 36,864.00 EURO 99.940 Locamion Sociéte Anonyme 99.957Immobiliere Fraikin Societé Anonyme 0.043
Société Civile "La Vitrollaise" Levallois Perret France 640.00 EURO 100.000 Immobiliere Fraikin Sociéte Anonyme 97.500Fraikin Sociéte Anonyme 2.500
Societè de la Seoune SA Trappes France 45,600.00 EURO 100.000 Iveco France SA 100.000
Societè Diffusion Vehicules Industriels SA Trappes France 7,022,400.00 EURO 100.000 Iveco France SA 100.000
Sodima SA Haunconcourt France 305,600.00 EURO 100.000 Iveco France SA 100.000
Stevi SA S.Priest en Jarez France 503,250.00 EURO 100.000 Iveco France SA 100.000
Transolver Finance EFC SA Madrid Spain 9,315,500.00 EURO 50.000 Iveco Fin. Luxembourg SA 50.000
Transolver Finance GmbH Ulm Germany 35,000,000.00 EURO 100.000 Iveco Magirus AG 100.000
Transolver Finance SA Trappes France 15,244,900.00 EURO 100.000 Iveco Finance Luxembourg SA 100.000
Transolver Finance SpA Turin Italy 30,000,000.00 EURO 100.000 Iveco SpA 100.000
Transolver Lease GmbH Ulm Germany 775,000.00 EURO 100.000 Iveco Magirus AG 100.000
Transolver Operational Services Ltd Watford Great Britain 1,400,000.00 GBP 100.000 Iveco UK Ltd 100.000
Transolver Services GmbH Unterschliessheim Germany 750,000.00 EURO 100.000 Iveco Magirus AG 100.000
Transolver Services SA Trappes France 38,000.00 EURO 10.000 Iveco France SA 10.000
Transolver Service SA Madrid Spain 610,000.00 EURO 100.000 Iveco Pegaso SL 100.000
Transolver Service SpA Turin Italy 1,989,000.00 EURO 100.000 Iveco SpA 100.000
Trucksure Services Ltd Watford Great Britain 900,000.00 GBP 100.000 Iveco UK Ltd 100.000
U.V.I.F. SAS La Garenne France 1,067,500.00 EURO 100.000 Iveco France SA 99.999Iveco NV 0.001
Vehic. Ind. Phoceens SAS Vitrolles France 927,200.00 EURO 100.000 Iveco France SA 99.999Iveco NV 0.001
Companies valued by equity method
Altra SpA Genoa Italy 516,400.00 EURO 33.340 Irisbus Italia SpA 66.670
Ashok Leyland Ltd Madras India 1,189,500,000.00 RUPIA 15.280 LRLIH Ltd 50.935
Auto Distr. Illiberis SA Peligros Spain 2,773,400.00 EURO 49.000 Iveco Pegaso SL 49.000
Ennore Foundries Ltd Madras India 67,899,000.00 RUPIA 20.911 LRLIH Ltd 59.090
European Engine Alliance Scrl Turin Italy 24,000,000.00 EURO 33.330 Iveco SpA 33.330
Fiat GRA.DE EEIG Watford Great Britain 0 GBP 24.000 Iveco NV 24.000
F.Pegaso SA Madrid Spain 933,045.20 EURO 100.000 Iveco Pegaso SL 100.000
Financiere Pegaso France SA Trappes France 260,832.00 EURO 100.000 Iveco Pegaso SL 100.000
GEIE V.IV.RE Paris France 0 FRF 50.000 Iveco SpA 50.000
Haveco Ltd Zhajiang Rep. of China 200,010,000.00 CNY 33.330 Iveco SpA 33.333
Iveco - Motor Sich Inc Zaporozhye Ukraine 26,568,000.00 UAH 55.560 Iveco SpA 55.556
84 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
Iveco SPRL **Kinshasa Rep. of Congo 340,235,000.00 ZRN 100.000 Iveco NV 100.000
Iveco Ukraine Inc Kiev Ukraine 62,515,200.00 UAH 65.910 Iveco SpA 65.910
Iveco Uralaz Ltd Miass Russia 65,255,056.00 RUR 33.330 Iveco SpA 33.333
LRLIH Ltd London Great Britain 76,075,000.00 GBP 30.000 Machen-Iveco Holding SA 100.000
Machen-Iveco Holding SA Luxembourg Luxembourg 26,000,000.00 GBP 30.000 Iveco SpA 30.000
Otoyol Pazarlama AS Istanbul Turkey 1,410,000,000,000.00 TRL 27.000 Iveco SpA 27.000
Otoyol Sanayi AS Istanbul Turkey 8,000,000,000,000.00 TRL 27.000 Iveco SpA 27.000
V.IVE.RE GEIE Turin Italy 0 LIT 50.000 Iveco SpA 50.000
Companies valued at cost
AFIN BULGARIA AD Sofia Bulgaria 200,000.00 BGN LEV 40.000 AFIN LEASING AG 100.000
AFIN LEASING AG Vienna Austria 1,500,000.00 EURO 40.000 IVECO NV 40.000
AFIN ROMANIA AS Bucarest Romania 2,063,200,000.00 LEI 39.920 AFIN LEASING AG 99.800
Atlas Vehicules Ind.AS Casablanca Marocco 19,700,000.00 MAD 48.985 Iveco NV 48.984Iveco SpA 0.001
CBC-IVECO Ltd Changzhou Rep. of China 664,000,000.00 CNY 50.000 Iveco NV 12.500Iveco SpA 37.500
CONSAF - Consorzio Svil.Az. Fornitrici Torino Italy 250,741.33 EURO 10.300 Iveco SpA 10.300
Consorzio Coforma Turin Italy 100,000,000.00 LIT 50.000 Iveco SpA 50.000
Consorzio Fiat Media Center Turin Italy 275,000,000.00 LIT 5.952 Iveco SpA 2.381Astra VI SpA 2.381
Irisbus Italia SpA 2.381
Consorzio Iveco Fiat - Oto Melara Rome Italy 100,000,000.00 LIT 50.000 Iveco SpA 50.000
CSST SpA Turin Italy 520,000.00 EURO 30.000 Iveco SpA 30.000
Elettr.Trasp. Comm. Srl Turin Italy 109,200.00 EURO 50.000 Iveco SpA 50.000
European Engine Alliance E.E.I.G. Maidenhead Great Britain 0 GBP 33.330 Iveco SpA 33.330
Fias Fiat Administration und Service GmbH Ulm Germany 200,000.00 DEM 80.000 Iveco Magirus AG 80.000
Fiat OM-Carr. Elev.SpA Lainate Italy 20,000,000.00 EURO 25.000 Iveco SpA 25.000
GESTRANS SA Suresnes France 45,730.00 EURO 50.000 Irisbus France SA 100.000
IKAMCO **Teheran Iran 25,000,000,000.00 RIALS 0.220 Iveco SpA 0.220
Ikarusbus Trejd Kft Mosca Russia 20,000.00 USD 38.265 Ikarusbus Jamugyàrto RT 100.000
Iran Magirus-Deutz Teheran Iran 180,000,000.00 IRR 100.000 Iveco Magirus AG 100.000
Irisbus North America LLC Dover United States 20,000.00 US$ 50.000 Irisbus France AS 50.000
Iveco Colombia Ltda S.ta Fè di Bogotà Colombia 43,478,000.00 PESO COL. 99.530 Iveco Venezuela 99.530
Iveco Hong Kong Ltd. Hong Kong Rep. of China 1,000.00 HK$ 100.000 Iveco NV 100.000
Orione Cons. Ind.le per la Sicur. e la Vigil. Turin Italy 50,500,000.00 LIT 0.990 Iveco SpA 0.990
T H E C O M P A N I E S I N T H E I V E C O G R O U P 85
Sirio Consorzio per la Sicurezza Industriale Turin Italy 106,552,000.00 LIT 11.239 Iveco SpA 9.385Irisbus Italia SpA 1.313
Iveco Aifo 0.469Iveco Mezzi Speciali SpA 0.093
Sicca SpA 0.469Astra VI SpA 0.187
SOTRA SA Abidjan Ivory Coast 3,000.000,000.00 CFA 19.900 Irisbus France SA 39.800
Transolver Finance AG Kloten Schweiz 1,500,000.00 CHF 100.000 Iveco Schweiz 100.000
Trucks & Bus Company Tajoura Libya 87,000,000.00 LYD 17.241 Iveco SpA 17.241
Zastava-Kamioni D.O.O. **Kragujevac Serbia 1,234,433,600.00 DIN. 46.500 Iveco SpA 46.500
Zona Franca Alari Sepauto AS Barcellona Spain 520,560.00 EURO 10.373 Iveco Pegaso SL 10.373
Companies consolidated by proportional method
Heuliez Bus SA Mauleon France 9,000,000.00 EURO 49.760 Societè Charolaise SA 99.520
Ikarusbus Jamugyàrto RT Szekesfehervar Hungary 6,007,459,850.00 HUF 47.500 Irisbus Holding SL 95.000
Ikarus Egyedi Autobusz Gy Budapest Hungary 350,000,000.00 HUF 26.058 Ikarusbus Jamugyarto RT 68.114
Irisbus Australia Pty Ltd Brisbane Australia 825,000.00 AU$ 30.000 Irisbus Holding SL 60.000
Irisbus Deutschland GmbH Mainz Germany 10,000,000.00 EURO 50.000 Irisbus Holding SL 100.000
Irisbus France SA Venissieux Francia 142,482,000.00 EURO 50.000 Irisbus Holding SL 100.000
Irisbus Holding SL Madrid Spain 233,670,000.00 EURO 50.000 Iveco SpA 30.403Iveco NV 19.597
Irisbus Iberica SL Madrid Spain 28,930,787.75 EURO 50.000 Irisbus Holding SL 100.000
Irisbus Italia SpA Turin Italy 100,635,750 EURO 50.000 Irisbus Holding SL 100.000
Irisbus (UK) LTD Watford Great Britain 200,000.00 GBP 50.000 Irisbus Holding SL 100.000
Karosa AS Vysoke Myto Czeck Rep. 1,065,559,000.00 CZK 47.940 SATAU SA 95.880
Karosa rso Bratislava Slovak Rep. 200,000.00 CZK 47.940 Karosa SA 100.000
Naveco Ltd Nanjing Rep. of China 2,527,000,000.00 CNY 50.000 Iveco SpA 50.000
Soc.d'Ass.Tecn.Automob. - SATAU SA Venissieux France 35,610,000.00 EURO 50.000 Irisbus France SA 100.000
Soc. Charolaise de Participat SA Venissieux France 2,370,000.00 EURO 50.000 Irisbus Holding SL 100.000
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
Investment in other companies
Registered Capital % of Interest % Name office Country stock Currency Group held interest
consolid. by held
A.Q.M. Soc. Cons. rl Rezzato Italy 1,549,352.00 EURO 0.933 Iveco SpA 0.933
ASSE Scpa Avellino Italy 428,280.00 EURO 3.010 Irisbus Italia SpA 6.020
Cemat SpA Rome Italy 7,000,000.00 EURO 5.640 Iveco SpA 5.638
Consorzio SCLV Giugliano Italy 775,000,000.00 LIT. 1.300 Iveco SpA 1.300
Consorzio a respons. limitata Spike Genoa Italy 90,380.00 EURO 15.000 Iveco SpA 15.000
Consorzio Bolzano Energia Bolzano Italy 12,000.00 EURO 16.670 Iveco SpA 16.667
C.R.F. Scpa Orbassano Italy 12,750,000.00 EURO 20.000 Iveco SpA 20.000
Elasis Soc. Cons. pAz Pomigliano d'Arco Italy 19,240,000.00 EURO 3.300 Iveco SpA 3.300
Fiat GES.CO France (GEIE) Paris France 0 EURO 15.000 Iveco France SA 15.000
Fiat Revi Scrl Turin Italy 300,000.00 EURO 10.000 Iveco NV 10.000
Fiat Sepin ScpA Turin Italy 3,850,000.00 EURO 6.000 Iveco SpA 6.000
Hinduja TMT Ltd Mumbai India 239,919,000.00 RUPIA 0.125 Iveco SpA 0.125
Isfor 2000 ScpA Brescia Italy 540,000.00 EURO 2.300 Iveco SpA 2.300
Isvor Fiat SpA Turin Italy 780,000.00 EURO 9.000 Iveco SpA 9.000
Sadi Brasil Ltda Nova Lima Brazil 100,000.00 BRL 15.000 Iveco Fiat Brasil Ltda 10.000Iveco Latin America Ltda 10.000
Stormont Truck & Van Ltd Londra Gran Bretagna 2.00 GBP 84.820 Iveco Ford Truck Ltd 100.000
Transaval SGR SA Madrid Spain 1,889,118.60 EURO 6.999 Iveco Pegaso SA 6.999
Wohnungsverein Ulm AG Ulm Germany 1,000,000.00 DM 13.600 Iveco Magirus AG 13.600
(*) 52% of the issued ordinary voting share capital plus 100% of the issued non votin preference share capital
(**) investment fully written off
86 C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Publication editedby Iveco Communications
Publication SF00291800Printed in Italy - SANTurin - 06.02
These financial statements are alsoavailable in Italian and can be obtained either from:
Iveco NV - Prof. Bavincklaan, 5Amstelveen (The Netherlands)
Iveco CommunicationsVia Puglia, 3510156 Turin (Italy)
or from the individual nationalCompanies.
Design:Iveco Commercial Communication and ImageStudio Frenda Advertising (Turin)
Colour separations:Mycrom (Turin)
Iveco NV Prof. Bavincklaan, 5 Amstelveen (The Netherlands)www.iveco.com