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 ’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


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.


€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.


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)


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


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



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


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.



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


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)



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

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