Operating Performance

Operating Performance

  2013 2012(*)
(€ million)FiatFiat excluding ChryslerFiatFiat excluding Chrysler
Net revenues 86,816 35,593 83,957 35,566
Cost of sales 74,57 31,324 71,701 31,117
Selling, general and administrative 6,689 2,896 6,763 2,998
Research and development 2,231 1,151 1,85 1,037
Other income/(expense) 68 24 (102) (76)
TRADING PROFIT/(LOSS) 3,394 246 3,541 338
Result from investments 97 103 107 110
Gains/(losses) on disposal of investments 8 8 (91) (91)
Restructuring costs 28 38 15 63
Other unusual income/(expense) (499) (507) (138) (107)
EBIT  2,972 (188) 3,404 187
Financial income/(expense) (1,964) (989) (1,885) (817)
PROFIT/(LOSS) BEFORE TAXES 1,008 (1,177) 1,519 (630)
Income taxes (943) (736) 623 418
PROFIT/(LOSS) 1,951 (441) 896 (1,048)

(*) Figures previously included in the 2012 Annual Report have been restated to reflect application of the amendment to IAS 19. Restatement resulted in a reduction in net profit of €515 million (€7 million increase in net loss for Fiat excluding Chrysler), reflecting a €273 million increase in operating expense (€17 million increase for Fiat excluding Chrysler), a €244 million increase in financial expense (€8 million decrease in financial expense for Fiat excluding Chrysler) and a €2 million decrease in income taxes (€2 million decrease for Fiat excluding Chrysler).

Revenues

Group revenues totaled €86.8 billion in 2013, an increase of 3% over the prior year (+7% at constant exchange rates – “CER”). On a regional basis, revenues in NAFTA were up 5% to €45.8 billion (CER +9%) on the back of higher volumes. LATAM reported revenues of €10 billion, down 10% in nominal terms (CER +1%). APAC was up 48% to €4.6 billion (CER +54%), driven by strong volume performance. Revenues for EMEA were down 2% to €17.4 billion (CER -1%), mainly reflecting volume declines in Europe during the first half. For Luxury Brands, revenues increased 31% to €3.8 billion (CER +34%), with Ferrari up 5% and Maserati more than doubling its revenues to €1.7 billion on the strength of new models introduced during the year. Components revenues were in line with 2012 at €8.1 billion (CER +4%).

Trading Profit

Trading profit was €3,394 million, down 4% over the prior year in nominal terms, but up 1% at constant exchange rates. For 2013, R&D amortization was €0.3 billion higher. NAFTA reported a trading profit of €2,220 million (€2,443 million for 2012, IAS 19 restated), a 9% decrease in nominal terms (CER -6%), with positive volume and pricing more than offset by higher industrial costs, including content enhancements for new models, and increased R&D amortization. LATAM posted a trading profit of €619 million (€1,056 million in 2012, IAS 19 restated), a 41% decrease in nominal terms (CER -33%) primarily attributable to input cost inflation, an unfavorable production mix and a lower result in Venezuela. APAC increased 38% to €358 million, driven by strong volume growth. In EMEA, losses were reduced by one-third to €470 million, mainly on the back of improved product mix and cost efficiencies. For Luxury Brands, trading profit increased 36% to €535 million, with Ferrari up 9% to €364 million, and Maserati tripling from the prior year’s level to €171 million. For Components, trading profit was 16% higher at €201 million (CER +21%).

Income from investments

Income from investments totaled €97 million (€107 million for 2012) and primarily reflects the Group’s share of the profit or loss of investees recognized using the equity method (€87 million in 2013 and €94 million in 2012). Included in that figure are: the result from investments in EMEA (€145 million in 2013; €160 million in 2012), in APAC (‑€39 million in 2013; -€5 million in 2012), mainly related to the Group’s share of losses of the Chinese JV attributable to industrial costs associated with new product launches, the investment in RCS MediaGroup (‑€34 million in 2013; -€68 million in 2012) and other investments (€20 million in 2013; €18 million in 2012).

Net gains on disposal of investments

Net gains on disposal of investments totaled €8 million. For 2012, there were net losses on disposal of investments of €91 million, which related to the write-down of the investment in the SevelNord joint venture.

Restructuring costs

Restructuring costs of €28 million for 2013 consisted primarily of provisions for Other activities, partially offset by a reversal in restructuring charges previously recognized for the NAFTA region.

Other unusual expense

Other unusual expense of €499 million included approximately €390 million in asset write-downs associated with the rationalization of architectures relating to the new product strategy, particularly for the Alfa Romeo, Maserati and Fiat brands, as well as asset impairments related to Teksid’s Cast Iron business. In addition, there was a €56 million write-off of the carrying value of the Equity Recapture Agreement Right following the 1 January 2014 agreement to purchase the minority remaining equity stake in Chrysler from the VEBA Trust2. Other unusual items for the year included a €115 million charge related to the June 2013 voluntary safety recall and customer satisfaction action in NAFTA and a €43 million net charge related to the devaluation of the Venezuelan bolivar (VEF) relative to the U.S. dollar. Those charges were offset by recognition of a €166 million gain following amendments to Chrysler’s U.S. and Canadian salaried defined benefit pension plans.

2 The UAW Retiree Medical Benefits Trust, a Voluntary Employees’ Beneficiary Association, is an independently administered trust established to pay health care benefits for retirees from Chrysler.

EBIT

EBIT totaled €2,972 million for the year (€3,404 million for 2012, IAS 19 restated). Net of unusuals, EBIT was down 4% year-over-year to €3,491 million (€3,648 million for 2012, IAS 19 restated).

Net financial expense

Net financial expense totaled €1,964 million, an increase of €79 million over 2012. Excluding the gains on the Fiat stock option-related equity swaps (€31 million for 2013, at their expiration, compared to €34 million for 2012), net financial expense was €76 million higher, largely due to a higher average net debt level.

Profit before taxes

Profit before taxes was €1,008 million (€1,519 million for 2012, IAS 19 restated), €511 million lower than the prior year due to the €432 million decrease in EBIT and higher net financial expense.

Income taxes

Income taxes were a positive €943 million, including a positive one-off of €1,500 million from the recognition of net deferred tax assets related to Chrysler. Net of this item, there was income tax expense of €557 million (€623 million for 2012), of which €244 million for Fiat excluding Chrysler primarily related to the taxable income of companies operating outside Italy and employment-related taxes in Italy.

Net profit

Net profit was €1,951 million (€896 million for 2012, IAS 19 restated). Excluding unusual items and the positive deferred tax impact, there was a net profit of €943 million for the year (€1,140 million for 2012, IAS 19 restated). On the same basis, Fiat excluding Chrysler reported a net loss of €911 million (loss of €787 million in 2012).

Profit attributable to owners of the parent

Profit attributable to owners of the parent totaled €904 million (€44 million for 2012).

 

The breakdown of EBIT by segment3 was as follows:

 Trading profit/(loss)   Result from investmentsUnusual income/(expense)EBIT
(€ million)20132012(*)201320122013201220132012(*)
NAFTA 2,220 2,443 (1) - 71 48 2,290 2,491
LATAM 619 1,056 - - (127) (31) 492 1.,025
APAC 358 260 (39) (5) (1) - 318 255
EMEA (470) (703) 145 160 (195) (194) (520) (737)
Luxury Brands 535 392 - - (65) - 470 392
Components 201 174 5 2 (60) (11) 146 165
Other activities (67) (85) (13) (52) (87) (12) (167) (149)
Eliminations and adjustments (2) 4 - 2 (55) (44) (57) (38)
Total Fiat Group
3,394 3,541 97 107 (519) (244) 2,972 3,404

(*) Figures previously included in the 2012 Annual Report have been restated to reflect application of the amendment to IAS 19. The impact on trading profit and EBIT for each segment is, where applicable, reported in the notes to the following tables. 

3 See “Fiat Group’s activities” and Note 34 – “Segment reporting” in the Note to the Consolidated Financial Statements.