Fiat S.p.A. reports financial results
Fiat S.p.A. reports financial results
Posted Wednesday, Jul 22, 2009, 10:40 am in Employee News
Fiat’ S.p.A.’s Board of Directors met today in Turin and reported the following financial results for the second quarter and first half of the year:
GROUP RESULTS – SECOND QUARTER (Q2)
Revenues of €13.2 billion were down 22.5% over Q2 2008, with volume declines experienced in all businesses. Trading profit came in at €310 million (Q2 2008: €1,131 million), a result of aggressive cost containment and effective management of operating leverage.
A pre-tax loss of €16 million includes €152 million one-off charges (€132 million relating to restructuring) and €161million in net financial expense.
The Group reported a net loss for the period of €179 million (€646 million profit for Q2 2008), at nearly break-even levels excluding unusual items.
Net industrial debt decreased to €5.7 billion (€6.6 billion at the end of Q1) largely driven by destocking actions across businesses. Liquidity increased to €6.4 billion (€5.1 billion at the end of Q1).
GROUP RESULTS – FIRST HALF (H1)
For the first half of 2009, Fiat Group revenues totalled €24.5 billion, a decrease of 23.8% over the prior year.
Group trading profit for the period was €262 million, down from the €1,897 million recorded in H1 2008. Aggressive cost containment measures and rigorous management of the Group’s operating leverage limited the impact of the significant drop in demand.
Operating profit for H1 2009 was €29 million, compared to €1,914 million for the first six months of 2008. This decrease reflects the decline in trading profit (down €1,635 million) and the €250 million difference in semester-to-semester one-offs (net unusual income of €17 million for H1 2008, €233 million net expense for H1 2009), attributable primarily to restructuring costs in addition to provisions on inventory and residual values on leased vehicles.
Net financial expense totalled €371 million (€441 million for H1 2008) and included a €53 million gain from the marking-to-market of two stock option-related equity swaps. For H1 2008, the same item presented a €142 million loss. Net of this item, financial expense for the first half increased €125 million, substantially due to higher levels of debt.
The loss before taxes was €376 million for the first half (€1,591 million profit in H1 2008), reflecting a lower operating result and a decrease in investment income (down €152 million), partially offset by lower net financial expense.
Income taxes totalled €214 million (€518 million for the first half of 2008), relating to taxable income of companies operating outside Italy and employment-related cash income taxes (IRAP) in Italy.
There was a net loss for the first half of €590 million, compared with a profit of €1,073 million for the same period in 2008.
Working capital reduction in Q2 more than compensated for the cash absorption in Q1, resulting in a €0.2 billion decrease in net industrial debt during the first half.
FIAT GROUP AUTOMOBILES RESULTS – SECOND QUARTER (Q2)
Fiat Group Automobiles posted revenues of €6.9 billion for the second quarter, down 11.1% over the prior year, due to the significant contraction in the global automotive market. Nearly one-third of the revenue decline was due to unfavourable exchange rate movements.
During the quarter, the Sector delivered a total of 591,100 cars and light commercial vehicles, down 8.3% over Q2 2008. In Western Europe, total deliveries decreased 7.2% to 356,400 units. The volumes were substantially flat in Italy (-0.3%), but dropped in France (-22%), Great Britain (-30.9%) and Spain (-71.5%). A significant increase was achieved in Germany (+46.4%).
For passenger cars only, Fiat Group Automobiles delivered a total of 514,600 units during the quarter, representing a 1.3% decrease over Q2 2008. Against an overall market decline of 3.3%, deliveries in Western Europe increased 3.4% to 317,600 units. Passenger car deliveries were up 7.2% in Italy, running counter to the market trend, but fell in several of the main Western European markets: France (-10.4%), Great Britain (-22.4%) and Spain (-67.7%). Performance in Germany was exceptional (+108.7%), with the increase significantly outpacing market growth.
FGA’s strong offering of environmentally-friendly cars enabled the Sector to fully benefit from eco-based government incentives.
Fiat brand, in particular, had an extremely positive performance. In Europe, the Fiat Panda and Fiat 500 continue to be the most sold A-segment cars, and the Punto was one of the most sold cars in the B-segment.
In Q2 2009, the Western European passenger vehicle market declined 3.3% year-on-year. Scrapping incentives introduced by governments in several major markets significantly limited the fall in demand. In Germany, the introduction of incentives and reform of the annual vehicle tax were particularly effective andstimulated a 32.8% increase in demand for the period. The 3.8% year-on-year increase in demand in France also benefited from incentives. In Italy, the decrease in demandwas limited to 1.4% in the second quarter as the positive impact of scrapping incentives introduced in February began to flow through to the market. By contrast, however, there was continued deterioration in Spain (-33.7%) and Great Britain (-21.2%), where incentives were only introduced towards the end of the quarter. In Brazil, demand increased 3.8% in part driven by government incentives aimed at encouraging purchases of new cars at the entry level.
Despite the negative performance of the market overall, Fiat Group Automobiles achieved significant gains in market share, achieving a 34.5% share in Italy (+1.6 percentage points over Q2 2008) and 9.2% share in Western Europe (+0.9 percentage points). The company retained its position as 4th ranked automobile manufacturer in Western Europe. Fiat Group Automobiles’ relative performance was particularly strong in Germany (+2.0 percentage points to 5.4%) and positive in France (+0.3 percentage points to 4.6%). The Fiat brand achieved a 7.5% share in Western Europe (+0.8 percentage points over Q2 2008) and a 26.8% share in Italy (+1.2 percentage points).
A total of 76,500 light commercial vehicles were delivered in Q2 2009, representing a decline of 37.9% over the second quarter of 2008. For Western Europe, deliveries were down 49.7% to 38,800 units. Fiat Professional’s share in Western Europe, where the market contracted 34.3%, increased to 14.4% (+1.2 percentage points over Q2 2008). In Italy, share for the period was 40.1% (-4.7 percentage points), principally due to the sharp decline in the camper segment where the company has long held a leading position.
In Brazil, deliveries for cars and light commercial vehicles increased 1% over Q2 2008. FGA maintained market leadership with a 25.2% market share (+0.2 percentage points).
After a negative first quarter (€30 million loss), Fiat Group Automobiles recorded a trading profit of €155 million for Q2 2009, compared with €243 million for Q2 2008. This decrease reflected the contraction in volumes, destocking actions, unfavourable product mix driven lower sales of light commercial vehicles and pricing pressure in Brazil, which were nearly offset by cost reduction measures and tight controls on the operating structure of the sector.
The Fiat 500C (the soft top convertible version) was introduced at dealer showrooms in Italy on July 4th to coincide with the new 500’s second birthday and the 52nd anniversary of the launch of the original version. The Fiat 500 has reached about 390,000 orders in 59 markets since launch.
The Sedici was also upgraded, with modifications to the interior and exterior style and two new Euro 5 engines being offered. The Fiat brand also presented the Panda Panda Cross, the first low-environmental impact City SUV, and the special MSN-edition Bravo, produced in collaboration with Microsoft and equipped with a single device which integrates all of the car’s electronic communication and entertainment functions. And, finally, the special series Fiat Panda 4×4 Adventure has arrived.
The Fiat brand received an important recognition for the second consecutive year, being named as the lowest average CO2 emissions (133.7g/km) brand for 2008 among the top-selling brands in 21 European markets (JATO ranking).
During the quarter, the Tofas plant in Bursa, Turkey, passed a significant milestone of 3 million vehicles produced. As part of the World Class Manufacturing programme, two FGA plants achieved Silver Level certification: Melfi (the first Italian plant to achieve this level) and Tychy in Poland.
FIAT GROUP AUTOMOBILES RESULTS – FIRST HALF (H1)
Fiat Group Automobiles had revenues of €12.5 billion, down 14.3% over the first six months of 2008 due to the significant contraction in demand and unfavourable currency impacts.
For H1 2009, Fiat Group Automobiles delivered a total of 1,055,700 passenger cars and light commercial vehicles, down 12.6% over the first six months of 2008 (-6.8% for passenger cars only). In Western Europe, deliveries declined 12% to 632,100 units (-2.6% for passenger cars only). In Western Europe, deliveries declined 12% to 632,100 units (-2.6% for passenger cars only). Fiat Group Automobiles reported significant gains in Germany (+65.8%), but experienced declines in Italy (-12.2%), France (-16.4%), Great Britain (-30.5%) and Spain (-73.1%).
The Western European passenger car market contracted 9.8% over the first six months of the year, mainly reflecting the sharp declines recorded in the early part of the year. Marked declines in demand continued in Italy (-10.7%), Spain (-38.3%) and Great Britain (-25.9%). The passenger car market grew in Germany (+26.1%), however, and was flat in France.
Fiat Group Automobiles’ market share in Italy was 33.4% (+1.4 percentage points over H1 2008), confirming the positive trend. In Western Europe, market share increased to 9.1% (+0.8 percentage points).
Light commercial vehicle deliveries totalled 142,300 units for the first six months of 2009, a decrease of 37.7% over the same period in 2008. In Western Europe, where overall market demand fell 34.1%, total deliveries decreased 50% to 71,200 units. Market share for Fiat Professional decreased to 40.1% in Tialy (-3.4 percentage points) and rose to 13.2% in Western Europe (+0.8 percentage points).
Deliveries were down for passenger cars and light commercial vehicles in Brazil (-2.9%). Market share decreased 0.6 percentage points to 24.5%, but Fiat Group Automobiles maintained its market leadership.
For H1 2009, Fiat Group Automobiles reported trading profit of €125 million. The decrease over the €436 million figure for the first six months of 2008 was attributable to the fall in volumes, unfavourable product mix resulting from weak demand for light commercial vehicles and pricing pressure in Brazil which were partially offset by cost containment measures.
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