Q1 2016 Results - FCA Group...Q1 2016 Results April 26, 2016 4Q1 ’16 highlights Record Q1 results...
Transcript of Q1 2016 Results - FCA Group...Q1 2016 Results April 26, 2016 4Q1 ’16 highlights Record Q1 results...
Q1 2016 Results April 26, 2016
Q1 2016 Results April 26, 2016
Q1 2016 Results April 26, 2016 2
This document, and in particular the section entitled “2016
guidance - confirmed”, contains forward-looking statements.
These statements may include terms such as “may”, “will”,
“expect”, “could”, “should”, “estimate”, “anticipate”, “believe”,
“remain”, “on track”, “design”, “target”, “objective”, “goal”,
“forecast”, “projection”, “outlook”, “prospects”, “plan”,
“intend”, or similar terms. Forward-looking statements are
not guarantees of future performance. Rather, they are based
on the Group’s current expectations and projections about
future events and, by their nature, are subject to inherent
risks and uncertainties. They relate to events and depend on
circumstances that may or may not occur or exist in the
future and, as such, undue reliance should not be placed on
them. Actual results may differ materially from those
expressed in such statements as a result of a variety of
factors, including: the Group’s ability to reach certain
minimum vehicle sales volumes; developments in global
financial markets and general economic and other conditions;
changes in demand for automotive products, which is highly
cyclical; the Group’s ability to enrich the product portfolio
and offer innovative products; the high level of competition
in the automotive industry; the Group’s ability to expand
certain of the Group’s brands internationally; changes in the
Group’s credit ratings; the Group’s ability to realize
anticipated benefits from any acquisitions, joint venture
arrangements and other strategic alliances; potential
shortfalls in the Group’s defined benefit pension plans; the
Group’s ability to provide or arrange for adequate access to
financing for the Group’s dealers and retail customers; the
Group’s ability to access funding to execute the Group’s
business plan and improve the Group’s business, financial
condition and results of operations; various types of claims,
lawsuits and other contingent obligations against the
Group; disruptions arising from political, social and
economic instability; material operating expenditures in
relation to compliance with environmental, health and
safety regulation; developments in labor and industrial
relations and developments in applicable labor laws;
increases in costs, disruptions of supply or shortages of
raw materials; exchange rate fluctuations, interest rate
changes, credit risk and other market risks; political and
civil unrest; earthquakes or other disasters and other risks
and uncertainties.
Any forward-looking statements contained in this
document speak only as of the date of this document and
the Company does not undertake any obligation to update
or revise publicly forward-looking statements. Further
information concerning the Group and its businesses,
including factors that could materially affect the
Company’s financial results, is included in the Company’s
reports and filings with the U.S. Securities and Exchange
Commission, the AFM and CONSOB.
Safe Harbor Statement
Q1 2016 Results April 26, 2016 3 Q1 2016 Results April 26, 2016
Group overview
Mass-market brands by region
Luxury brand - Maserati
Components
Industry outlook & guidance
Appendix
Q1 2016 Results April 26, 2016 4
Q1 ’16 highlights
Record Q1 results
Adjusted EBIT margin of 5.2% nearly double Q1 ’15
All segments profitable
Removal of FCA US ring-fencing
Enables unified financing platform
Provides free flow of capital within the Group
Issuance of €1.25B medium-term notes
Due March 2024 with a 3.75% coupon
FCA’s long-term debt rating raised by Standard & Poor’s
Rating raised to “BB” from “BB-”
“Stable” outlook confirmed
2016 marks the 75th anniversary of the Jeep brand
Global expansion plan continues with Jeep introduced to India market
Annual General Shareholders Meeting held in Amsterdam on April 15
2016 FY guidance confirmed
Q1 2016 Results April 26, 2016 5
New products
Maserati Levante
Jeep Renegade production started in China Fiat Mobi
Production started on February 29 in Mirafiori (Italy) plant
Offered with Euro 6 gasoline and diesel engine options
Available in Europe in Q2
Production started on March 7 in Betim (Brazil) plant
All-new model
Focused on urban mobility
Production started on April 18 in Guangzhou plant
Second locally produced Jeep SUV in China
Commercial launch scheduled for Q2
Chrysler Pacifica
Production started on February 29 in Windsor (Canada) plant
Unsurpassed highway fuel-economy rating in its segment
Industry's first hybrid minivan, available in H2
Named to Ward’s “10 Best Interiors” list for 2016
Q1 2016 Results 6 April 26, 2016
Q1 ‘16 summary *
Shipments in line with Q1 ’15. Increases in EMEA and NAFTA
offset decreases in LATAM and APAC.
Shipments (000s units)
1,093
1,086
2015
2016
Q1
Includes reduced financial charges offset by increased taxes.
Net profit at €478M (vs €27M in Q1 ‘15)
Adjusted net profit (€M)
Q1
31
528
2015
2016
Refer to Appendix for definitions of supplemental financial measures. Figures may not add due to rounding.
Net revenues up 3%, or 4% at constant exchange
rates - CER
Net revenues (€M)
25,843
26,570
2015
2016
Q1
Adjusted EBIT up 97%, with margin nearly doubled to 5.2%
vs 2.7% in Q1 ‘15
Adjusted EBIT(€M)
700
1,379
2015
2016
Q1
Net industrial debt increased mainly due to working capital
seasonality (€1.3B) and unfavorable FX translation (€0.4B)
Net industrial debt (€B)
5.0
6.6
Liquidity in line with year-end 2015 with €2.5B RCF increase and
€1.25B bond issuance offsetting operational seasonality, $2.0B
TLB prepayment and €0.5B unfavorable FX
Available liquidity (€B)
24.3
24.6
Mar 31, 2016
Dec 31, 2015
Mar 31, 2016
Dec 31, 2015
* Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari’s classification as a discontinued operation for the year ended December 31, 2015. Refer to the Appendix for a reconciliation of these results to amounts previously reported.
Q1 2016 Results 7 April 26, 2016
€M
Q1 ‘16 Adjusted EBIT walk *
700
626
76
(53)
71
(20)
18
(39)
1,379
Q1 '15 NAFTA LATAM APAC EMEA Maserati Components Other & Eliminations
Q1 '16
B/(W) than
Q4 ‘15 (109) (18) (11) (15) 2 (47) 47 (151)
* Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari’s classification as a discontinued operation for the year ended December 31, 2015.
Refer to the Appendix for a reconciliation of these results to amounts previously reported.
Q1 2016 Results 8 April 26, 2016
Cash flows from operating activities, net of Capex
(1,040)
Change in Net industrial debt
(1,544)
Q1 ‘16 Net industrial debt walk *
€M
(5,049)
2,756
(634) (26)
(1,316)
(1,820) (504) (6,593)
Dec 31 '15 post
Ferrari spin-off
Adjusted
industrial
EBITDA
Financial
charges
and taxes **
Change
in funds
& other
Working
capital
Capex Scope, FX &
dividend
Mar 31 '16
∆ vs Q1 ’15 Excluding Ferrari
770 (82) (536) (296) 179 (754)
* Information for 2015 has been re-presented to exclude Ferrari, consistent with Ferrari’s classification as a discontinued operation for the year ended December 31, 2015.
Refer to the Appendix for a reconciliation of these results to amounts previously reported.
** Net of IAS 19
Difference in Net industrial debt flows Q1 ‘16 vs Q1 ‘15
(719)
Q1 2016 Results April 26, 2016 9
NAFTA
Q1 ‘16 Q1 ‘15 ∆
Sales (k units) 634 587 8%
Market share 12.9% 12.4% 50 bps
U.S. dealer inventories (days of supply) 82 73 9 d/s
Shipments (k units) 649 633 3%
Net revenues (€M) 17,136 16,177 6%
601
1,227
309 96
117 36
68
Q1 '15 Volume &
Mix
Net price Industrial
costs
SG&A Other Q1 '16
o U.S. & Canada industry sales up 3% and 8%, respectively, with Group sales up 8% in the region
U.S. sales up 9% to 551k vehicles with share up 70 bps; Jeep
sales up 17%
U.S. dealer days of supply consistent with year-end 2015
U.S. fleet mix at 30% vs 23% in Q1 ’15 due to the timing of
fleet sales
Continued as market leader in Canada with 63k vehicles sold
(+2%); Jeep sales up 35%
Mexico sales flat at 20k vehicles with Ram brand +49%
o Shipments: U.S. +19k (+3%), Canada -1k (-2%), Mexico -2k (-11%)
o Net revenues up 6% (5% at CER) on higher shipments, positive vehicle mix, improved net pricing and favorable FX translation
Adjusted EBIT walk (€M)
%= Adjusted EBIT margin
7.2%
3.7%
o Volume & mix improvement primarily driven by Jeep, Ram and minivans offsetting lower 200 and Dart volumes
o Net price improvement reflects positive gross pricing partially offset by higher incentives and FX transaction impact of the CAD and MXN
o Industrial costs reflect purchasing savings and lower recall campaign costs partially offset by higher manufacturing and product costs for content enhancements
o SG&A improvement primarily due to reduced advertising spend
o Other reflects FX effects B/(W)
Q4 ‘15 (34) (79) (121) 85 40 (109)
Sales data represents sales to retail and fleet customers and limited deliveries to Group-related persons.
Sales by dealers to customers are reported through a new vehicle delivery system.
Q1 2016 Results 10 April 26, 2016
LATAM
Q1 ‘16 Q1 ‘15 ∆
Sales (k units) 109 153 (29%)
Market share 12.7% 14.7% (200) bps
Inventories (days of supply) 49 46 3 d/s
Shipments (k units) 102 135 (24%)
Net revenues (€M) 1,311 1,551 (15%)
o Industry down 18% due to continued macroeconomic weakness
Brazil industry down 28% y-o-y, Argentina up 1%
o Group sales down more than industry due to actions to protect margins
o Continued as market leader in Brazil with share at 18.1%, 180 bps lead over nearest competitor
Jeep Renegade and new Fiat Toro had strong performance in Brazil with segment share of 27.2% and 59.3%, respectively
o Shipments in Brazil down 37k units, Argentina up 4k units
o Net revenues +5% at CER due to better mix offsetting lower volume
6.4%
4.2%
B/(W)
Q4 ‘15 28 (7) (15) 4 (28) (18)
(65)
10 4
22
34 6 11
Q1 '15 Volume &
Mix
Net price Industrial
costs
SG&A Other Q1 '16
(4.2%)
0.8%
o Overall volume down reflecting poor trading conditions in Brazil was more than offset by better mix from newly launched Jeep Renegade and Fiat Toro
o Higher industrial costs from new product launches and input cost inflation more than offset by efficiencies
o Lower SG&A driven primarily by lower marketing expense
Adjusted EBIT walk (€M)
%= Adjusted EBIT margin
Q1 2016 Results 11 April 26, 2016
APAC
Q1 ‘16 Q1 ‘15 ∆
Sales (k units) Of which China JV sales
53 24
59 13
(10%) 85%
Market share 0.7% 0.8% (10) bps
Inventories (days of supply) 94 137 (43) d/s
Shipments (k units) 25 47 (47%)
Net revenues (€M) 949 1,512 (37%)
o Industry demand flat with China +1%, India +2%, Australia +3%,
South Korea +6% offsetting a 7% decline in Japan
o Group sales decreased 10% compared with prior year
Australia -50% due to price increases taken to offset
financial impact of AUD weakness
Japan +9% outperforming the industry
China -1%, South Korea -6%, India -2%
Jeep (69% of regional group sales) +17% y-o-y driven by
strong sales of China locally produced Jeep Cherokee
o Consolidated shipments -47% with Jeep -56% due to transition to local production
o Net revenues -36% at CER
4.2%
o Consolidated shipments declined due to transition to Jeep local production in China and lower volumes in Australia due to pricing to offset negative FX impact Unfavorable mix resulted from shipment of vehicles affected by Tianjin port explosion in Q3 ‘15
o SG&A improved primarily due to lower direct marketing expenses, now incurred by China JV
o Other reflects improvement of China JV results due to local production and commercialization of Jeep Cherokee
4.3%
65
(120)
9
(2)
50 12 10
Q1 '15 Volume &
Mix
Net price Industrial
costs
SG&A Other Q1 '16
B/(W)
Q4 ‘15 (84) 17 (20) 37 39 (11)
4.3%
1.3%
APAC market share reflects aggregate for major markets where Group competes (China, Australia, Japan,
South Korea, and India). Market share is based on retail registrations except in India where market share is
based on wholesale volumes.
Adjusted EBIT walk (€M)
%= Adjusted EBIT margin
Q1 2016 Results 12 April 26, 2016
EMEA
Q1 ‘16 Q1 ‘15 ∆
Sales (k units) 352 319 10%
EU Market share - passenger cars 6.7% 6.2% 50 bps
EU Market share - LCVs 10.9% 11.0% (10) bps
Inventories (days of supply) 57 58 (1) d/s
Shipments (k units) 304 271 12%
Net revenues (€M) 5,040 4,684 8%
25
73
(24)
27
(9)
4 96
Q1 '15 Volume &
Mix
Net price Industrial
costs
SG&A Other Q1 '16
1.9%
Passenger Cars
o EU28+EFTA (EU) industry up 8% to 3.9M units with growth in all
major markets: Spain (+7%), Italy (+21%), France (+8%), UK (+5%)
and Germany (+4%)
o EU sales up 16% to 263k units. EU market share up 50 bps driven
by Italy (+90 bps), Spain (+20 bps), UK (+10 bps), France (+10 bps)
offset by a decline in Germany (-30bps)
o Shipments at 240k (+13%)
LCVs
o EU industry up 10% to 0.5M units with growth in all major
markets: Italy (+19%), France (+10%), Spain (+9%) and
Germany (+8%)
o Sales up 9% to 56k units with EU market share down 10 bps
o Shipments at 64k (+8%)
o Volume increase and favorable mix driven by Jeep
Renegade, Fiat 500X and Tipo
o Lower net price driven by higher incentives in EU
o Industrial costs reflect manufacturing and
purchasing efficiencies partially offset by higher
R&D
0.5%
B/(W)
Q4 ‘15 (13) 7 (24) - 15 (15)
Adjusted EBIT walk (€M)
%= Adjusted EBIT margin
Q1 2016 Results April 26, 2016 13
Q1 ‘16 Q1 ’15 ∆
Shipments 6,295 7,306 (14%)
Net revenues (€M) 508 523 (3%)
Adjusted EBIT (€M) 16 36 (56%)
Commercial Performance
o Shipments down 14% due to lower shipments in
North America (-16%) and Europe (-8%) partially
offset by higher shipments in China (+36%)
Financial Performance
o Net revenues down 3% (-3% at CER), with lower
shipments partially offset by positive mix and FX
o Adjusted EBIT decreased to €16M primarily due to
lower volumes
Q1 ‘16 Shipments By Market
North
America
37%
Europe
Top-5
20%
Greater
China
24%
Japan
4%
Others
15%
Luxury brand Maserati
Levante Production started in Q1 at Mirafiori plant
North America remains #1 market for the brand
Q1 2016 Results April 26, 2016 14
Components
o Net revenues down 5% (flat at CER) reflecting volume declines at Comau and Teksid
more than offsetting higher volumes at Magneti Marelli
o Adjusted EBIT up 26% with favorable mix more than offsetting higher industrial costs
o Magneti Marelli order intake was €653M (+17% vs Q1 ‘15) with non-captive at 53%
o Comau order backlog was €972M in line with year-end 2015, but lower than at end
of Q1 ‘15
Net revenues
2,435
2,319
Q1 '15
Q1 '16
68
86
Q1 '15
Q1 '16
Adjusted EBIT
(€M)
Margin
3.7%
2.8%
Q1 2016 Results April 26, 2016 15
NAFTA (passenger cars, UVs, pickup trucks & LCVs)
LATAM (passenger cars & LCVs)
APAC
(passenger cars only)
EMEA (EU28+EFTA) (passenger cars & LCVs)
FY '15
FY '16E
FY '15
FY '16E
FY '15
FY '16E
FY '15
FY '16E
Industry outlook
28.9 - 29.4
21.1
21.0 – 21.5
28.2
3.6 - 4.1
4.1
16.1 – 16.6
16.1
M units
Forecast unchanged
U.S. industry remains strong
Forecast unchanged – awaiting resolution of political uncertainties
Continued weak market conditions indicates low-end of range
Forecast unchanged
Modest industry growth continues
Forecast unchanged
Q1 ‘16 trend indicates high-end of range
16 Q1 2016 Results April 26, 2016
2016 guidance - confirmed
Net revenues
Adjusted EBIT
Adjusted net profit
Net industrial debt
>€110B
>€5.0B
>€1.9B
As per initial guidance:
o NAFTA and EMEA continue trend of improving margin performance
o LATAM returns to modest profitability with Pernambuco reaching full model production in H2
o APAC profitability improving in H2 as Jeep manufacturing localization in China completed
o Maserati performance improving in H2 following Levante launch
o Capex spending in line with 2015
Net industrial debt confirmed with Q1 ‘16 working capital seasonality expected to substantially reverse in Q2 ’16
<€5.0B
Q1 2016 Results April 26, 2016 17
APPENDIX
Q1 2016 Results April 26, 2016 18
FCA monitors its operations through the use of various
supplemental financial measures that may not be
comparable to other similarly titled measures of other
companies. Accordingly, investors and analysts should
exercise appropriate caution in comparing these
supplemental financial measures to similarly titled
financial measures reported by other companies. Group
management believes these supplemental financial
measures provide comparable measures of its financial
performance which then facilitate management’s ability
to identify operational trends, as well as make decisions
regarding future spending, resource allocations and
other operational decisions.
Supplemental financial measures
FCA’s supplemental financial measures are defined as
follows:
Adjusted Earnings Before Interest and Taxes (“Adjusted
EBIT”) is computed as EBIT excluding: gains/(losses)
on the disposals of investments, restructuring,
impairments, asset write-offs and other unusual items
that are considered rare or discrete events that are
infrequent in nature. These same items, on a tax
effected basis, are factored into the calculation of
Adjusted net profit and Adjusted basic EPS
Earnings Before Interest, Taxes, Depreciation and
Amortization (“EBITDA”) is computed starting with
EBIT and then adding back depreciation and
amortization expense
Net Industrial Debt is computed as debt plus other
financial liabilities related to Industrial Activities less (i)
cash and cash equivalents, (ii) current securities, (iii)
current financial receivables from Group or jointly
controlled financial services entities and (iv) other
financial assets. Therefore, debt, cash and other
financial assets/liabilities pertaining to Financial
Services entities are excluded from the computation
of Net Industrial Debt
19 Q1 2016 Results April 26, 2016
Key performance metrics
€M
Q1 ’16 Q1 ‘15
Worldwide shipments (units ‘000) 1,086 1,093
Net revenues 26,570 25,843
EBIT 1,307 696
Adjustments (72) (4)
Adjusted EBIT 1,379 700
Of which: Investment income, net 62 50
Net financial expenses (512) (608)
Profit before taxes 795 88
Tax expense (317) (61)
Net profit 478 27
Adjusted net profit 528 31
EBITDA 2,724 2,033
20 Q1 2016 Results April 26, 2016
Reconciliation of Adjusted EBIT to EBIT and Adjusted net profit to Net profit
Adjusted EBIT to EBIT
Q1 ’16 Q1 ‘15
Adjusted EBIT 1,379 700
NAFTA capacity realignment (51) -
Venezuela currency devaluation (19) -
Restructuring costs (7) (4)
Other 5 -
Total adjustments (72) (4)
EBIT 1,307 696
€M
Adjusted net profit to Net profit
Q1 ’16 Q1 ‘15
Adjusted net profit 528 31
Adjustments (as above) (72) (4)
Tax impact on adjustments 22 -
Adjustments, net of taxes (50) (4)
Net profit 478 27
21 Q1 2016 Results April 26, 2016
Reconciliation of Net industrial debt to Debt
March 31, 2016 December 31, 2015
Net industrial debt 6,593 5,049
Net financial services debt 1,442 1,499
Net debt 8,035 6,548
Intercompany financial receivables/(payables), net — (39)
Current financial receivables from jointly-controlled
financial services companies 35 16
Other financial assets/(liabilities), net 63 117
Current securities 459 482
Cash and cash equivalents 17,963 20,662
Debt 26,555 27,786
€M
22 Q1 2016 Results April 26, 2016
Reconciliation of results for Ferrari separation
€M
Results excluding
Ferrari (as reported
herein)
Ferrari, net of
intercompany
Results including
Ferrari (previously
reported)
Shipments (units ‘000) 1,093 2 1,095
Net revenues 25,843 553 26,396
EBIT 696 96 792
Adjusted EBIT 700 100 800
Net profit 27 65 92
The following is a reconciliation of the Group's results as reported herein for the three months
ended March 31, 2015 (re-presented to exclude Ferrari) to the Group's results previously reported
Three months ended March 31, 2015
Q1 2016 Results April 26, 2016 23
Market Share - mass-market brands
APAC
Market share is based on retail registrations except in India where market share is based
on wholesale volumes
NAFTA LATAM
0.6
0.8 0.9 0.8
3.0
3.9 4.0
1.9
0.6 0.3
0.3 0.3
0.3 0.3 0.4
0.1
LCV
Passenger Cars
LCV
Passenger Cars
EMEA
12.2 13.2 12.6 12.4
22.9 22.719.7 18.1
Q1 ‘13 Q1 ‘14 Q1’ 15 Q1 ‘16
11.4 12.5 12.5
13.2
16.0 16.6 16.4
15.5
29.0 28.1 28.2 29.1
43.5 44.3 45.4 44.7
6.4 6.0 6.2 6.7
11.7 11.4 11.0 10.9
Q1 ‘13 Q1 ‘14 Q1’ 15 Q1 ‘16
Q1 ‘13 Q1 ‘14 Q1’ 15 Q1 ‘16
Q1 ‘13 Q1 ‘14 Q1’ 15 Q1 ‘16
%
24 Q1 2016 Results April 26, 2016
Note: Numbers may not add due to rounding; total cash maturities excluding accruals
Outstanding
March 31 ‘16 9M 2016 2017 2018 2019 2020 Beyond
9.9 Bank Debt 3.0 2.8 2.5 0.5 0.4 0.9
14.8 Capital Market 2.8 2.4 1.9 1.5 1.3 4.9
1.6 Other Debt 0.5 0.2 0.2 0.2 0.1 0.4
26.3 Total Cash Maturities 6.3 5.3 4.5 2.2 1.8 6.2
18.4 Cash & Mktable Securities
5.9 Undrawn Committed Revolving
Facilities
24.3 Total Available Liquidity
5.0 Sale of receivables (IFRS de-recognition compliant)
3.2 Of which receivables sold to financial services JVs (FCA Bank)
Debt maturity schedule
€B
Q1 2016 Results April 26, 2016 25
Group Investor Relations Team
Joe Veltri +1-248-576-9257 Vice President
Erin Banyas +1-248-512-3224
Francesca Ferragina +39-011-006-2308
Tim Krause +1-248-512-2923
Alois Monger +1-248-512-1549
Paolo Mosole +39-011-006-1064
fax: +39-011-006-3796
email: [email protected]
websites: www.fcagroup.com
www.fcausllc.com
Contacts