powerpoint presentation · (1.5)% (2.0)% 5.4% q1 2019 q1 2020 € million % = adjusted ebit margin...
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F C A F I R S T Q U AR T E R 2 0 2 0 R E S U L T S | M AY 5 , 2 0 2 0
Q1
May 5, 2020 Q1 2020 RESULTS | 2
S A F E H A R B O R S T A T E M E N TThis document, and in particular the section entitled “FY 2020 Guidance Withdrawn”, contains
forward-looking statements. In particular, these forward-looking statements include statements
regarding future financial performance and the Company’s expectations as to the
achievement of certain targeted metrics, including revenues, industrial free cash flows, vehicle
shipments, capital investments, research and development costs and other expenses at any
future date or for any future period are forward-looking statements. These statements may
include terms such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”,
“anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”,
“forecast”, “projection”, “outlook”, “prospects”, “plan”, or similar terms. Forward-looking
statements are not guarantees of future performance. Rather, they are based on the Group’s
current state of knowledge, future expectations and projections about future events and are
by their nature, 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 forward-looking statements as a
result of a variety of factors, including: the extent and duration of the COVID-19 pandemic’s
impact on supply chains, the Group’s production and distribution channels, demand in the
Group’s end markets, and the broader impact on financial markets and the global economy;
the Group’s ability to launch products successfully and to maintain vehicle shipment volumes;
changes in the global financial markets, general economic environment and changes in
demand for automotive products, which is subject to cyclicality; changes in local economic
and political conditions, changes in trade policy and the imposition of global and regional
tariffs or tariffs targeted to the automotive industry, the enactment of tax reforms or other
changes in tax laws and regulations; the Group’s ability to expand certain of the Group’s
brands globally; the Group’s ability to offer innovative, attractive products; the Group’s ability
to develop, manufacture and sell vehicles with advanced features including enhanced
electrification, connectivity and automated-driving characteristics; various types of claims,
lawsuits, governmental investigations and other contingencies affecting the Group, including
product liability and warranty claims and environmental claims, investigations and lawsuits;
material operating expenditures in relation to compliance with environmental, health and
safety regulations; the intense level of competition in the automotive industry, which may
increase due to consolidation; the Group’s ability to complete and realize expected synergies
following completion of the Group’s proposed merger with Peugeot S.A., including the
expected cumulative implementation costs; exposure to shortfalls in the funding of the Group’s
defined benefit pension plans; the Group’s ability to provide or arrange for access to adequate
financing for the Group’s dealers and retail customers and associated risks related to the
establishment and operations of financial services companies, including capital required to be
deployed to financial services; 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; a
significant malfunction, disruption or security breach compromising the Group’s information
technology systems or the electronic control systems contained in the Group’s vehicles; the
Group’s ability to realize anticipated benefits from joint venture arrangements in certain
emerging markets; the Group’s ability to successfully implement and execute strategic
initiatives and transactions, including the Group’s plans to separate certain businesses;
disruptions arising from political, social and economic instability; risks associated with the
Group’s relationships with employees, dealers and suppliers; increases in costs, disruptions of
supply or shortages of raw materials; developments in labor and industrial relations, including
any work stoppages, and developments in applicable labor laws; 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 disclaims 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.
May 5, 2020 Q1 2020 RESULTS | 3
B U S I N E S S H I G H L I G H T SS TR ONG S TAR T TO Q UAR TER I N TERRUPTED B Y PAN DEMI C
AGM POSTPONED TO LATE JUN ’20,
including postponement of
resolution on proposed 2019
€1.1B ordinary dividend
AVAILABLE LIQUIDITY at Mar ‘20 of
€18.6B, with Q1 ‘20 Industrial free
cash flows of €(5.1)B; this excludes
new €3.5B incremental bridge
credit facility added in Apr ‘20
RAM PICKUP TRUCK SALES UP 7%
in U.S. vs. Q1 ’19; U.S. large
pickup market share up 100 bps
y-o-y to 24.1%
PRODUCTION RESUMED IN ITALY
AND CHINA, plans in place to
phase-in production at all plants
as jurisdictions permit
MARKET SHARE HIGHER or flat in
all regions y-o-y through Feb,
except APAC; Q1 share in North
America up 40 bps y-o-y to 12.0%,
LATAM up 70 bps to 14.2%
ADJUSTED EBIT OF €0.1B, down 95%
y-o-y due to impact of COVID-19;
North America Adjusted EBIT of
€0.5B and margin at 3.8%
Q1 2020 RESULTS |May 5, 2020 4
C O VI D - 1 9 S A F E T Y A N D O U T R E A C HSAFETY AND WELL-BEING OF OUR EMPLOYEES AND COMMUNITIES IS OUR FIRST PRIORITY
• Plants temporarily closed globally in compliance with local restrictions
• Remote working established globally, where feasible
• Comprehensive health and safety protocols established for all facilities
• Repurposed a portion of capacity to produce protective masks, face
shields and ventilator components
• Mobilizing company resources to assist producers of ventilators, other
medical equipment and personal protective equipment (PPE)
• Donations and other community support efforts in each region,
including providing more than 1.5 million meals to school age childrenCURRENT STATUS
ACTIONS TAKEN
• Coordinating with dealers and suppliers to ensure proper
health and occupational requirements are implemented
• Plants reopening on a staggered basis by region, with
production gradually ramping up
• Implement progressive return to work actions in conjunction
with remote working
• Standard procedures implemented to ensure proper social
distancing and sanitizing
• PPE in use at plants and other areas as appropriate
Q1 2020 RESULTS |May 5, 2020 5
K E Y C O M M E R C I A L M E T R I C S
505
22
239
121
568
42
344
131
COMBINED SALES
MARKET SHARE (1) 12.0% 11.6%
Q1 INDUSTRY (1)
(2020 vs. 2019) - 14%
0.4% 0.5%
- 31%
5.9% 6.6%
- 26%
14.2% 13.5%
- 13%
S I GNI F I CAN T S H AR E GAI N S I N N O RTH AMER I C A AN D L AT I N AMER I CA DES P I TE I NDUSTRY DEC L I NE
NORTH AMERICA LATIN AMERICAASIA PACIFICEUROPE, MIDDLE EAST & AFRICA
(1) Industry and market share data reflect the following:
• Asia Pacific 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, as well as management’s estimates of industry sales data, which use certain data provided by third party sources.
• Europe, Middle East & Africa reflects aggregate for EU 28 + EFTA markets only and is derived from a combination of passenger car information from European Automobile Manufacturers Association (ACEA) Registration Databases and internal information on LCVs
000 units
Q1 2019
Q1 2020
Q1 2020 RESULTS |May 5, 2020 6
(1) Combined shipments include shipments by the Group's consolidated subsidiaries and unconsolidated joint ventures, whereas consolidated shipments only include shipments by the Group’s consolidated subsidiaries
(2) Excludes €3.5B new incremental bridge credit facility syndicated in Apr ’20
* Refer to Appendix for definitions of supplemental financial measures and reconciliations to applicable IFRS metrics
RESULTS FROM CONTINUING OPERATIONS Q1 2020 Q1 2019
COMBINED SHIPMENTS (1)(000 units) 818 1,037 - 21%
CONSOLIDATED SHIPMENTS (1)(000 units) 796 1,000 - 20%
NET REVENUES (€ billion) 20.6 24.5 - 16%
ADJUSTED EBIT* 52 1,067 - 95%
ADJUSTED EBIT MARGIN* 0.3% 4.4% - 410 bps
ADJUSTED NET PROFIT/(LOSS)* (471) 570 - 183%
ADJUSTED DILUTED EARNINGS/(LOSS) PER SHARE (EPS)*(€) (0.30) 0.36 - 183%
INDUSTRIAL FREE CASH FLOWS* (5,074) (270) n.m.
AVAILABLE LIQUIDITY (€ billion)18.6 (2)
(at Mar 31 2020)
23.1 (at Dec 31 2019)
- 19%
Combined shipments down
21% due to temporary
production stoppage and
demand disruption in all
regions related to COVID-19
Adjusted EBIT down 95%
due to abrupt loss of
global volumes
North America
Adjusted EBIT of €0.5B,
with margin at 3.8%
Industrial free cash
flows of €(5.1)B, with
capex at €2.3B, up €1.0B
F I N A N C I A L H I G H L I G H T SR ES UL TS S I GNI F I C AN TLY I MPAC TED B Y C O VI D -1 9
€ million, except as otherwise stated
May 5, 2020 Q1 2020 RESULTS | 7
Q 1 2 0 2 0 A D J U S T E D E B I T * WA L K
* Refer to Appendix for definitions of supplemental financial measures and reconciliations to applicable IFRS metrics
Q1 2019 Volume & Mix Net Price Industrial Costs SG&A Other Q1 2020
S I GNI F I CAN T R EDUC TI ON I N VO L UME DUE TO MAN DATED TEMPORAR Y PR O DUC TI ON S TO PPAGE
1,067
52
€ million
% = Adjusted EBIT margin
4.4%
0.3%
Q1 2020 RESULTS |May 5, 2020 8
Adjusted
Industrial
EBITDA
CapexWorking
Capital
Changes in
Provisions
& Other
Financial
Charges
& Taxes (1)
Industrial
Free Cash
Flows
(1) Net of IAS 19
* Refer to Appendix for definitions of supplemental financial measures and reconciliations to applicable IFRS metrics
Q 1 2 0 2 0 I N D U S T R I A L F R E E C A S H F L O WS *
S I GNI F I CAN T N EGAT I VE WO R KI N G C AP I TAL DUE TO R EDUC ED S H I PMEN TS , WI TH C APEX AT EX PEC TED L EVEL S
∆ VS. Q1 2019 (1,060) (951) (2,843) 87 (37) (4,804)
€ million
(5,074)
Q1 2020 RESULTS |May 5, 2020 9
548
(59)
(270)
(27)
(75)
1,044
(9) (19)
105
11
AL L R EGI ONS DO WN DUE TO C O VI D -1 9 , N O RTH AMER I C A R EMAI NED PR O F I TAB L E
3.8%
6.5%
(7.2)%
(0.4)%
(29.5)% 2.3%(12.7)%
(1.5)% (2.0)% 5.4%
Q1 2019
Q1 2020
€ million
% = Adjusted EBIT margin
Q 1 2 0 2 0 A D J U S T E D E B I T
NORTH AMERICA ASIA PACIFIC EUROPE, MIDDLE EAST & AFRICA
LATIN AMERICA MASERATI
Q1 2020 RESULTS |May 5, 2020 10
N O R T H A M E R I C APO S I T I VE MO MEN TUM B U I L T O VER PR I OR Q UAR TER S I N TERUPPTED B Y I MPAC T O F PAN DEMI C
ADJUSTED EBIT WALK € million
% = Adjusted EBIT margin• Shipments down 16%, primarily due to temporary
suspension of production, starting progressively from
March 18
• Net revenues down 9%, primarily from lower shipments
partially offset by positive vehicle mix and favorable
foreign exchange translation effects
• Adjusted EBIT down 48%, primarily due to lower Net
revenues, as well as higher warranty and logistics
costs, partially offset by purchasing savings
1,044
1,5652,019 2,062
5486.5%
8.9%10.6% 10.0%
3.8%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
ADJUSTED EBIT & MARGIN(€ million)
556 596 600 649469
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
SHIPMENTS(000 units)
16.1 17.6 19.1 20.6
14.5
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
NET REVENUES(€ billion)
1,044
548
Q1 ‘19 Volume & Mix
Net Price
Industrial Costs
SG&A Other Q1 ‘20
6.5%
3.8%
Q1 2020 RESULTS |May 5, 2020 11
A S I A P A C I F I CR EL AT I VE I MPAC T F R O M PAN DEMI C MO R E S EVER E AS R EGI ON WAS F I RS T TO B E AF F EC TED
• Combined shipments down 49%, primarily due to
temporary suspension of local production beginning
January 23 in China and disruption to market
demand throughout the region
• Consolidated shipments down 24%, primarily due to
reduced Jeep Compass volumes
• Net revenues down 21%, primarily due to lower
shipments and component sales to China JV
• Adjusted EBIT down, primarily due to lower Net
revenues, higher manufacturing costs and lower
results from China JV, partially offset by lower
marketing costs
JV
Consolidated
17 22 17 20 13
22 13 18 207
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
COMBINED SHIPMENTS(000 units)
39 350.6
0.8 0.70.8
0.5
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
NET REVENUES(€ billion)
(9) (12) (10) (5)
(59)
(1.5)% (1.6)% (1.5)% (0.6)%
(12.7)%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
ADJUSTED EBIT & MARGIN(€ million)
3540
20
(9)
(59)
ADJUSTED EBIT WALK € million
% = Adjusted EBIT margin
(12.7)%
Volume & Mix
Industrial Costs
SG&A Other Q1 ‘20Net Price
(1.5)%
Q1 ‘19
Q1 2020 RESULTS |May 5, 2020 12
E U R O P E , M I D D L E E A S T & A F R I C A
• Combined and consolidated shipments down 31%
and 32%, respectively, primarily due to temporary
suspension of production beginning March 11 and
temporary closure of the majority of dealerships
• Net revenues down 26%, primarily due to lower
volumes
• Adjusted EBIT down, primarily due to lower
volumes, unfavorable mix and increased
compliance costs, partially offset by lower fixed
costs from cost containment and restructuring
actions implemented in prior periods, lower
depreciation and amortization, as well as reduced
advertising costs
ADJUSTED EBIT WALK € million
% = Adjusted EBIT margin
Volume & Mix
Industrial Costs
SG&A OtherNet Price
Q1 ‘19
R ES UL TS R EF L ECT S I GNI F I C AN T I MPAC T F R OM C O VI D-1 9
5.15.6
4.75.3
3.7
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
NET REVENUES(€ billion)
302 357260 280 205
1516
1032
15
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
COMBINED SHIPMENTS(000 units)
(19)
22
(55)
46
(270)
(0.4)%
0.4%
(1.2)%
0.9%(7.2)%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
ADJUSTED EBIT & MARGIN(€ million)
317373
270
JV
Consolidated
312220
(19)
(270)
(0.4)%
Q1 ‘20
(7.2)%
Q1 2020 RESULTS |May 5, 2020 13
L A T I N A M E R I C AL O WER R ES ULTS DR I VEN B Y N O N -REPEAT O F O N E -OF F I N DI RECT TAX C R EDI TS AN D I MPAC T O F C O VI D -19
ADJUSTED EBIT WALK € million
% = Adjusted EBIT margin • Shipments decreased 12%, primarily due to
temporary suspension of production on March 23
• Net revenues down 32%, primarily due to lower
shipments, non-repeat of prior year one-off
recognition of Brazilian indirect tax credits and
negative foreign exchange impacts primarily from
weakening of Brazilian real
• Adjusted EBIT down, primarily due to lower Net
revenues and purchasing cost inflation
105 110152 134
(27)
5.4% 5.4%6.9%
5.9%(2.0)%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
ADJUSTED EBIT & MARGIN(€ million)
120148 150 159
106
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
SHIPMENTS(000 units)
1.9 2.1 2.2 2.3
1.3
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
NET REVENUES(€ billion)
105
(27)
5.4%
(2.0)%
Q1 ‘19 Volume & Mix
Industrial Costs
SG&A Other Q1 ‘20Net Price
May 5, 2020 Q1 2020 RESULTS | 14
S H AR P MAR KET DEC L I NE I N C H I NA AN D EUR OPE R ES UL TED I N S I GNI F I C AN TL Y L O WER VO L UMES
Shipments down 44%, primarily due to market disruption, particularly in
China and Europe, as well as temporary suspension of
production beginning March 12
Net revenues down 46%, in line with decreased shipments and
unfavorable market and model mix
Adjusted EBIT down due to lower Net revenues
€ million,
except as otherwise stated Q1 2020 Q1 2019
SALES (000 units) 3.4 6.3 - 46%
SHIPMENTS (000 units) 3.1 5.5 - 44%
NET REVENUES 254 471 - 46%
ADJUSTED EBIT (75) 11 n.m.
ADJUSTED EBIT MARGIN (29.5)% 2.3% n.m.
Q1 2020 RESULTS |May 5, 2020 15
F Y 2 0 2 0 I N D U S T R Y O U T L O O K A N D G U I D A N C EL O WER I NDUS TRY EX PEC TED AS A R ES UL T O F PAN DEMI C, GU I DAN CE WI THDRAWN
(1) APAC industry reflects aggregate for major markets where Group competes (China, Australia, Japan, South Korea and India).
Source: IHS Global Insight, Wards, China Passenger Car Association and Group estimates
FY 2020 GUIDANCE WITHDRAWN
NORTHAMERICA
REGION 3.0 - 29% y-o-y
BRAZIL 1.9 - 30% y-o-y
PASSENGER CARS AND LCVs
LATINAMERICA
REGION 27.1 - 13% y-o-y
CHINA 18.6 - 13% y-o-y
PASSENGER CARS ONLY
(1)ASIA
PACIFIC(1)
REGION 17.7 - 23% y-o-y
EU 28+EFTA 13.4 - 26% y-o-y
PASSENGER CARS AND LCVs
EUROPEMIDDLE EAST
AFRICA
million units
FY 2020 INDUSTRY OUTLOOK
TOTAL VEHICLE SALES INCLUDING
MEDIUM/HEAVY TRUCKS
As previously disclosed on Mar 18 2020, due to continued uncertainty of market conditions and regional operating restrictions related to the evolving COVID-19 pandemic, the Group has withdrawn its FY 2020 Guidance and will provide an update when it is possible to have better visibility of the overall impact of the crisis
Outlook for region reduced from
20.3, U.S. reduced from 17.0
Outlook for region reduced from
4.3, Brazil reduced from 2.8
Outlook for region reduced from
31.2, China reduced from 21.3
REGION 15.0 - 28% y-o-y
U.S. 12.5 - 29% y-o-y
Outlook for region reduced from
22.7, EU 28+EFTA reduced from 17.5
Q1 2020 RESULTS |May 5, 2020 16
C O VI D - 1 9 B U S I N E S S C O N T I N U I T YC O MPREHEN SI VE AN D C O O RDI N ATED I N I T I AT I VES I N PL AC E TO R ES UME O PER AT I ONS
• Safety and well-being of our employees and communities remain our first priority
• Reconfigured plant workstations and other workplace areas to meet enhanced health and occupational requirements
• Working with suppliers and dealers to ensure proper health and occupational requirements are implemented, as well as readiness aligned with FCA plant start-up plans
• Vehicle development activities continue for key near-term launches to minimize launch delays
• Full deployment of online vehicle selling and home vehicle delivery in all regions
• Implemented new customer-oriented commercial initiatives to facilitate entire vehicle purchase process
• CEO participating in U.S. task force focused on U.S. economic recovery plan
• Merger activities with Groupe PSA continue to progress
Q1 2020 RESULTS |May 5, 2020 17
C O VI D - 1 9 B U S I N E S S C O N T I N U I T YACTIONS TAKEN TO MINIMIZE LOSSES AND PRESERVE CASH, FY 2020 OPERATING COSTS REDUCED BY >€2B
• Overall personnel costs reduced by ~50% during plant shutdown
• FY 2020 capex estimated spend reduced by ~€1B, key program launches generally delayed by 3 months, no programs cancelled to-date
• Operating costs eliminated in FY 2020 estimated at >€2B:
o Marketing spending lowered, supporting retail dealer channels where open, utilizing digital media elsewhere
o Research and development costs reduced, including suspension of majority of supplemental workforce
o Non-essential services postponed or eliminated
o Chairman and non-executive Board members to forego remaining 2020 compensation
Q1 2020 RESULTS |May 5, 2020 18
C O VI D - 1 9 B U S I N E S S C O N T I N U I T Y
PLANNEDPRODUCTION RESTART
• All plants, except Belvidere – week of May 18
• Belvidere by Jun 1
• JV plants (China):o Guangzhou – Feb 19o Changsha – Feb 24
• Ranjangaon (India) –May 18
• Melfi (PHEV), Mirafiori (500 BEV), Sevel – Apr 27
• Majority of remaining plants – beginning late May, all plants restarted by early Jul
• All plants – May 11
• Mirafiori and AGAP – week of May 25
• Modena - early Jul
PLANS IN PLACE TO RESUME FULL -SCALE INDUSTRIAL ACTIVITIES
NORTHAMERICA
LATINAMERICA
ASIA PACIFIC
EUROPEMIDDLE EAST
AFRICA
PRODUCTION RESTART FACTORS
• Production level ramp-up will vary by plant
• Jobs per hour to be reduced due to additional
procedures to ensure workforce safety
• Initial production prioritized to:
o Electrified products
o Higher margin products
o Vehicles with low inventory
• Production levels to be aligned to consumer demand
SUPPLIER READINESS
• Global supplier webinar conducted Apr 15
• Each of ~4,500 supplier manufacturing locations
surveyed for:
o Start-up technical readiness
o Compliance with COVID-19 operational checklist
• Readiness confirmed for all plants
Q1 2020 RESULTS |May 5, 2020 19
C O VI D - 1 9 S U M M A R YPAN DEMI C TO I MPAC T Q 2 ; S WI F T AC T I ONS TAKEN TO MI T I GATE EF F EC T , WH I LE
PR O TECTI N G EMPL O YEES AN D GR O UP; F Y 2 0 2 0 C O S T S AVI N GS I N EX C ES S O F € 2 B
• Ensuring ongoing safety and well-being of our employees and communities remains top priority
• Swift actions taken to safeguard profitability and preserve liquidity, cost savings in 2020 expected
to be >€2B
• Based on internal stress test analysis, including the benefits from the actions taken to reduce costs
and cash burn, sufficient liquidity beyond 2020, even with a 50% reduction in 2020 industry
volumes in each region compared to prior year
• Production resumed in Italy and China, plans in place to phase-in production at all plants as
jurisdictions permit, Latin America production phase-in to begin May 11, North America
beginning week of May 18
• Given prolonged impact of pandemic on industrial and commercial activities, impact on Q2 ‘20
results will be more significant than Q1 ’20
• FY 2020 Guidance withdrawn
• Continue to progress on proposed merger with Groupe PSA, with transaction expected to close
at end of 2020 or early 2021
May 5, 2020 Q1 2020 RESULTS | 20
APPENDIX
Q1 2020 RESULTS |May 5, 2020 21
S U P P L E M E N T A L F I N A N C I A L M E A S U R E S
FCA monitors its operations through the use of various supplemental financial measures. These and similar measures are widely used in the industry in which the
Group operates, however, these financial measures may not be comparable to other similarly titled measures of other companies and are not intended to be
substitutes for measures of financial performance as prepared in accordance with IFRS as issued by the IASB, as well as IFRS adopted by the European Union.
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.
FCA’s supplemental financial measures are defined as follows:
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is
computed starting with Net profit/(loss) and adding back Net financial
expenses, Tax expense/(benefit) and depreciation and amortization expense
Adjusted earnings before interest and taxes (“Adjusted EBIT”) excludes
certain adjustments from Net profit/(loss) from continuing operations
including: gains/(losses) on the disposal of investments, restructuring,
impairments, asset write-offs and unusual income/(expenses) that are
considered rare or discrete events that are infrequent in nature, and also
excludes Net financial expenses and Tax expense/(benefit)
Adjusted net profit/(loss) is calculated as Net profit/(loss) from continuing
operations excluding post-tax impacts of the same items excluded from
Adjusted EBIT, as well as financial income/(expenses) and tax
income/(expenses) considered rare or discrete events that are infrequent in
nature
Adjusted diluted EPS is calculated by adjusting Diluted earnings/(loss) per
share from continuing operations for the impact per share of the same items
excluded from Adjusted net profit/(loss)
Industrial free cash flows is calculated as Cash flows from operating activities
less: cash flows from operating activities from discontinued operations; cash
flows from operating activities related to financial services, net of
eliminations; investments in property, plant and equipment and intangible
assets for industrial activities; adjusted for net intercompany payments
between continuing operations and discontinued operations; and adjusted
for discretionary pension contributions in excess of those required by the
pension plans, net of tax. The timing of Industrial free cash flows may be
affected by the timing of monetization of receivables and the payment of
accounts payable, as well as changes in other components of working
capital, which can vary from period to period due to, among other things,
cash management initiatives and other factors, some of which may be
outside of the Group’s control.
Q1 2020 RESULTS |May 5, 2020 22
RESULTS FROM CONTINUING OPERATIONS
THREE MONTHS ENDED MAR 31
2020 2019
COMBINED SHIPMENTS (1) (000 units) 818 1,037
CONSOLIDATED SHIPMENTS (1) (000 units) 796 1,000
NET REVENUES 20,567 24,481
ADJUSTED EBIT* 52 1,067
OF WHICH RESULT FROM INVESTMENTS 42 58
ADJUSTED EBIT MARGIN 0.3% 4.4%
NET FINANCIAL EXPENSES 213 244
PROFIT/(LOSS) BEFORE TAXES (869) 720
TAX EXPENSE 825 212
NET PROFIT/(LOSS) (1,694) 508
ADJUSTED NET PROFIT/(LOSS)* (471) 570
DILUTED EARNINGS/(LOSS) PER SHARE (“DILUTED EPS”) (€) (1.08) 0.32
ADJUSTED DILUTED EPS* (€) (0.30) 0.36
INDUSTRIAL FREE CASH FLOWS* (5,074) (270)
K E Y P E R F O R M A N C E M E T R I C S
(1) Combined shipments include shipments by the Group's consolidated subsidiaries and unconsolidated joint ventures, whereas consolidated shipments
only include shipments by the Group's consolidated subsidiaries
* Refer to definitions of supplemental financial measures and reconciliations to applicable IFRS metrics included herein
€ million, except as otherwise stated
Q1 2020 RESULTS |May 5, 2020 23
K E Y F I N A N C I A L M E T R I C S *
4.4%5.7%
7.2% 7.1%
0.3%
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
1,0671,527
1,959 2,115
52
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
0.360.59
0.810.97
(0.30)
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
(270)
754 178
1,451
(5,074)
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20
ADJUSTED EBIT € million
ADJUSTED EBIT MARGIN
ADJUSTED DILUTED EPS €
INDUSTRIAL FREE CASH FLOWS € million
RESULTS FROM CONTINUING OPERATIONS
* Refer to definitions of supplemental financial measures and reconciliations to applicable IFRS metrics included herein
Q1 2020 RESULTS |May 5, 2020 24
RE C ON C I L I AT I ON OF N E T P ROF I T / (LO S S ) TO ADJUSTE D E B I T
Q1 2020 Adjusted EBIT excludes adjustments primarily related to:
(1) Impairment expense primarily as a result of review of business and operations to take into consideration the estimated impacts and effects of the COVID-19 pandemic, including the
estimated impact on the macroeconomic environment, the market outlook and the Group’s operations
RESULTS FROM CONTINUING OPERATIONS
THREE MONTHS ENDED
MAR 31 2020
DEC 31 2019
SEP 302019
JUN 302019
MAR 31 2019
NET PROFIT/(LOSS) FROM CONTINUING OPERATIONS (1,694) 1,578 (179) 793 508
TAX EXPENSE 825 352 440 317 212
NET FINANCIAL EXPENSES 213 221 280 260 244
ADJUSTMENTS:
IMPAIRMENT EXPENSE AND SUPPLIER OBLIGATIONS (1) 643 11 1,376 113 42
RESTRUCTURING COSTS, NET OF REVERSALS 20 (41) (1) (8) 204
GAINS ON DISPOSAL OF INVESTMENTS (5) (8) – (7) –
BRAZILIAN INDIRECT TAX – REVERSAL OF LIABILITY/RECOGNITION OF CREDITS – – – – (164)
OTHER 50 2 43 59 21
TOTAL ADJUSTMENTS – CONTINUING OPERATIONS 708 (36) 1,418 157 103
ADJUSTED EBIT 52 2,115 1,959 1,527 1,067
€ million
Q1 2020 RESULTS |May 5, 2020 25
DILUTED EPS TO ADJUSTED DILUTED EPS
DILUTED EPS FROM CONTINUING OPERATIONS (1.08) 1.00 (0.11) 0.50 0.32
IMPACT OF ADJUSTMENTS, NET OF TAXES, ON DILUTED EPS 0.78 (0.03) 0.92 0.09 0.04
ADJUSTED DILUTED EPS (0.30) 0.97 0.81 0.59 0.36
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING FOR DILUTED EPS (000) 1,568,001 1,573,810 1,571,155 1,570,180 1,569,868
NET PROFIT/ (LOSS) TO ADJUSTED NET PROFIT/ (LOSS)
THR EE MO NTHS END ED
MAR 31
2020
DEC 31
2019
SEP 30
2019
JUN 30
2019
MAR 31
2019
NET PROFIT/(LOSS) (including Magneti Marelli results and net gain on disposal) (1,694) 1,538 (179) 4,652 619
LESS: NET PROFIT/(LOSS) – DISCONTINUED OPERATIONS – (40) – 3,859 111
OF WHICH: GAIN/(LOSS) ON COMPLETION OF MAGNETI MARELLI SALE, NET OF TAXES – (40) – 3,809 –
OF WHICH: NET PROFIT MAGNETI MARELLI (1) – – – 50 111
NET PROFIT/(LOSS) FROM CONTINUING OPERATIONS (1,694) 1,578 (179) 793 508
TOTAL ADJUSTMENTS – CONTINUING OPERATIONS (per Page 24) 708 (36) 1,418 157 103
TAX IMPACT ON ADJUSTMENTS (2) (34) (5) (54) (22) (41)
NET DERECOGNITION OF DEFERRED TAX ASSETS AND OTHER TAX ADJUSTMENTS (3) 549 – 77 – –
TOTAL ADJUSTMENTS, NET OF TAXES 1,223 (41) 1,441 135 62
ADJUSTED NET PROFIT/(LOSS) (471) 1,537 1,262 928 570
R E C O N C I L I A T I ON O F N E T P R O F I T / (L O S S ) T O A D J US T E D N E T P R O F I T / (L O S S )AN D D I L UT E D E P S T O AD J US T E D D I L UT E D E P S
(1) Reflects results of Magneti Marelli for each respective period up to its deconsolidation on completion of the sale transaction on May 2 2019
(2) Reflects tax impact on adjustments excluded from Adjusted EBIT noted on Page 24
€/share
€ million
(3) Write-down of net deferred tax assets in Italy and Brazil, primarily in relation to tax loss
carry-forwards in each respective country
Q1 2020 RESULTS |May 5, 2020 26
R E C O N C I L I A T I O N O F C A S H F L O WS F R O M O P E R A T I N G A C T I V I T I E S T O I N D U S T R I A L F R E E C A S H F L O WS
THREE MONTHS ENDED
MAR 31
2020
DEC 31
2019
SEP 30
2019
JUN 30
2019
MAR 31 2019
CASH FLOWS FROM OPERATING ACTIVITIES (2,820) 4,368 2,343 3,052 699
LESS: CASH FLOWS FROM OPERATING ACTIVITIES –DISCONTINUED OPERATIONS
– – – 63 (371)
CASH FLOWS FROM OPERATING ACTIVITIES –CONTINUING OPERATIONS
(2,820) 4,368 2,343 2,989 1,070
LESS: OPERATING ACTIVITIES NOT ATTRIBUTABLE TO INDUSTRIAL ACTIVITIES
(5) 15 13 17 29
LESS: CAPITAL EXPENDITURES FOR INDUSTRIAL ACTIVITIES 2,327 2,902 2,152 1,953 1,376
ADD: NET INTERCOMPANY PAYMENTS BETWEEN CONTINUING OPERATIONS AND DISCONTINUED OPERATIONS
– – – (265) 65
ADD: DISCRETIONARY PENSION CONTRIBUTION, NET OF TAX 68 – – – –
INDUSTRIAL FREE CASH FLOWS (5,074) 1,451 178 754 (270)
€ million
Q1 2020 RESULTS |May 5, 2020 27
OUTSTANDING
MAR 31 2020CONTINUING OPERATIONS 9M 2020 2021 2022 2023 2024 BEYOND
5.4 BANK DEBT 2.6 1.1 0.8 0.4 0.1 0.4
6.7 CAPITAL MARKETS DEBT 1.5 1.2 1.4 1.4 1.3 0.0
0.4 OTHER DEBT 0.4 0.0 0.0 0.0 0.0 0.0
1.7 LEASE LIABILITIES 0.3 0.2 0.2 0.2 0.2 0.6
14.2 TOTAL CASH MATURITIES (1) 4.8 2.5 2.4 2.0 1.5 1.0
12.3 CASH, CASH EQUIVALENTS AND CURRENT DEBT SECURITIES
6.3 UNDRAWN COMMITTED CREDIT LINES
–CASH, CASH EQUIVALENTS AND CURRENT DEBT SECURITIES INCLUDED WITHIN ASSETS HELD FOR SALE
18.6 TOTAL AVAILABLE LIQUIDITY
D E B T M A T U R I T Y S C H E D U L E
(1) Excludes accruals and asset backed financing of <€0.1B at Mar 31 2020
Figures may not add due to rounding
€ billion
Q1 2020 RESULTS |May 5, 2020 28
RESEARCH AND DEVELOPMENT COSTS – CONTINUING OPERATIONS
THREE MONTHS ENDED MAR 31
2020 2019
RESEARCH AND DEVELOPMENT EXPENDITURES EXPENSED 320 310
AMORTIZATION OF CAPITALIZED DEVELOPMENT EXPENDITURES 318 347
IMPAIRMENT AND WRITE-OFF OF CAPITALIZED DEVELOPMENT EXPENDITURES 295 16
TOTAL RESEARCH AND DEVELOPMENT COSTS 933 673
R E S E A R C H A N D D E VE L O P M E N T C O S T S A N D E X P E N D I T U R E S
RESEARCH AND DEVELOPMENT EXPENDITURES – CONTINUING OPERATIONS
CAPITALIZED DEVELOPMENT EXPENDITURES 677 605
RESEARCH AND DEVELOPMENT EXPENDITURES EXPENSED 320 310
TOTAL RESEARCH AND DEVELOPMENT EXPENDITURES 997 915
€ million