Fiat Group and Fiat Auto Development Plan

Transcription

1 Fiat Group and Fiat Auto Development Plan Presentation to Government, Local Authorities and Trade Unions Palazzo Chigi August 3, 2005

2 The Fiat Group An industrial Group focusing on automotive activities of which of which 2004 Revenues manufactured in Italy sold in Italy Group: 46,703 million 46.2% 33.4% Fiat Auto: 20,539 million 67.7% 50.3% 2004 Investments (IAS/IFRS) of which R&D Group: 3,953 million 1,803 Fiat Auto: 2,282 million 990 Headcount at of which in Italy of which South and Islands Group: 179,771 * 83,320 30,957 Fiat Auto: 50,947 33,887 19,787 (*) including Fiat Powertrain and Sevel Val di Sangro Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 1

3 Financial Highlights 2004 Group targets achieved Strategic freedom regained after the GM settlement Leadership and organization changes Last year of net loss for the Group Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 2

4 2005 Strategic Development Powertrain Technologies industrial business unit set up Maserati acquisition to extend reach of Alfa Romeo brand into high-end sports market Alliance between Iveco Finance and Barclays to strengthen financial services to Iveco customers New LCV cooperation agreement between Fiat, PSA and Tofas in Turkey Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 3

5 2005 2Q Operations update (under IAS/IFRS) Significant operating improvement on flat top-line Group revenues at 12.1bn in line with Q2 04, but Auto revenues up 2.4% to 5.0bn helped by currency and better channel mix Group trading profit at 360mn, doubled from 2004 improved performance by all businesses, except for components Fiat Auto loss sharply reduced from 238mn to 88mn Net income at 217mn (+ 463mn), including 254mn net after-tax unusual items Net industrial debt down 0.9bn to 9.2bn Solid cash position at 7.3bn after payment of debts for 0.5bn Pro-forma for conversion of mandatory convertible and Italenergia Bis put yields: Net industrial debt to Group equity at 0.44:1 Positive 35mn Q2 net income without net after-tax unusual items 2005 financial objectives confirmed Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 4

6 2005 Sectors Automobiles Difficult market particularly in the first half of the year Launch of new products concentrated in the second half of the year Thorough rationalization of costs in non-essential activities Agricultural and Construction Equipment Revenues up 5% in US$ terms Weak environment in Latin America CE market stronger than AG; US better than Europe Commercial Vehicles Revenues up 2-3% Sound order portfolio Rationalization underway Components Revenues up 5-6% Business Solutions Rationalization and focusing on activities of service/support to the Group Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 5

7 Agricultural and Construction Equipment (profitability comparision with 2004) 2,500 2,000 CATERPILLAR Operating result [us$ million] 1,500 1,000 JOHN DEERE 500 AGCO Revenues = US$2 bn ROS [%] Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 6

8 Commercial Vehicles (profitability comparision with 2004) 1,600 DAIMLER 1,400 1,200 Operating result [us$ million] 1, VOLVO SCANIA PACCAR 400 MAN Revenues = 2 bn ROS [%] Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 7

9 Operating margin targets confirmed [under IAS/IFRS, before unusual items] Operating Margin 2004 Achievements 2005 Targets 2007 Targets Automobiles (4.2%) (1.5%) excl. restructuring of up to 320 mn 2-4% 6-6.5% excl. CNH 4.7% restructuring of ~ 50 mn 10% >4% excl. Iveco 4.2% restructuring of ~ 30 mn 7,5% Components 2.6% ~3% 5-7% Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 8

10 Group financial objectives confirmed [under IAS/IFRS] 2004 Achievements 2005 Targets 2006 Targets 2007 Targets Group Revenues Sales CAGR of 6% Group Op. Income/margin (a) Group break-even ROS of 5-6% Group Cash Flow (b) Negative cash flow before exceptionals significantly reduced Net industrial cash flow of ~ 2.0 bn due to exceptionals (c) Positive Group operating cash flow Group Net Income Positive net income due to unusual items Net income in excess of 700 mn Net income of bn EPS 1.25/1.55 (d) Group Net Industrial Debt 1:1 net debt to Group equity No more than 1:1 net debt to Group equity (a) (b) (c) (d) Before unusual items Cash Flow from operations Incl. Italenergia Bis: 1.8 bn; Real estate: 0.2 bn; GM settlement net of assumed Powertrain debt: 1.0 bn On a fully diluted basis Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 9

11 Fiat Auto Development Plan Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 10

12 Product Range Plan Commercial launches Product range renewal started in 2003 FL = Facelift New models MY = Model Year Punto FL Stilo FL N. Panda Barchetta FL Idea Multipla FL Ypsilon Musa 166 FL 156 sedan and Sportwagon FL GT Crosswagon Q4 GTV FL Spider FL 147 FL Punto FL Van Stilo MW FL Van N. Panda Van Stilo MW Van Strada FL Doblò Cargo MY Multipla Van FL Scudo FL Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 11

13 New Product Range Expected production start-up New models Models not yet announced Product portfolio enrichment FL = Facelift MY = Model Year Future C Segm. New A Segm. (500) Future MPV Croma SUV Grande Punto Multipla MY D200 Panda FL Idea FL Minicargo Panorama Grande Punto FL Croma FL Doblò Panorama FL SUV New C/D segment Ypsilon FL Specialty Phedra MY Musa FL GT FL Future C Segm. Future high-end range 159 Sedan Brera 159 Sportwagon Brera Spider 159 sedan and SW FL Brera FL Brera Spider FL Idea Van Future Scudo Future C Segm. Van Future MPV Van Doblò Cargo FL Future Ducato Grande Punto Van Minicargo Panda Van FL Grande Punto Van FL Strada FL Idea Van FL Multipla Van MY Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 12

14 Plants Mirafiori L 0 / L 1 MPV families and high-end range vehicles confirmed Production of current Punto continuing Grande Punto production (subject to agreement with Local Authorities execution) Melfi Production of Grande Punto started Cassino Pomigliano Termini Imerese Production of Croma started Production of current Stilo continuing Production of future Fiat C Segment model confirmed Production of Alfa 147 and Alfa Gt confirmed Production of Alfa 159 sedan started Production of Alfa 159 Sportwagon confirmed Ypsilon production confirmed Sevel Val di Sangro Production of future Ducato confirmed Tychy (PL) Production of Seicento Production of Panda Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 13

15 Fiat Auto Investments [under IAS/IFRS] Total Total investments [ million] 2,150 2,500 2,450 2,450 9,550 of which R&D [ million] ,580 of which painting systems [ million] 150 Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 14

16 Fiat Group Investments Total Total investments [ million] 4,300 4,300 4,400 4,700 17,700 of which R&D [ million] 1,700 1,970 1,930 1,870 7,470 Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 15

17 Production Capacity of Italian Plants 2005 Working days Shifts Daily capacity Mirafiori 3 S 1,200 Melfi 6 days 3 S 1,400 Cassino 2 S 1,100 Pomigliano 2 S 840 Termini Imerese 2 S 580 Sevel Val di Sangro 2 S 800 Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 16

18 Adjustment of Production Capacity H 2 O Paint Shop 2005 production capacity of Fiat Auto plants in Italy at approximately 5,900 cars/day The Ministerial Decree no. 44/2004 requires painting systems to comply with new regulations on emissions in atmosphere by October 31, 2007 Fiat Auto will invest approximately 150 million on painting systems to: make them compliant with new regulations ensure at the same time a production capacity aligned to market demand Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 17

19 Production Capacity of Italian Plants 2005 Vs Working days Shifts Daily capacity Working days Shifts Daily capacity Capacity Mirafiori 3 S 1,200 3 S 1, Melfi 6 days 3 S 1,400 6 days 3 S 1,400 = Cassino 2 S 1,100 2 S 1, Pomigliano 2 S S 840 = Termini Imerese 2 S S Sevel Val di Sangro 2 S S 1, Total vehicles/year 1,430,000 1,365,000-65,000 equal to vehicles/day Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 18

20 Manufacturing Footprint From 2007 production footprint based on: Industrial assessments: More efficient utilization of production capacity Cost competitiveness Platform convergence Optimization of investments Labor aspects: Manpower utilization On this basis: One model allocated at Mirafiori plant in 2008 Fiat new A segment car (500) to be produced at Tychy plant Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 19

21 Market Forecast Western Europe Passenger cars Decrease in demand expected in 2005 (- 1.5% vs 2004), partially recovering in 2006 Modest growth expected in following years (+ 0.4% CAGR) to 14.6 million units at end of period Light Commercial Vehicles Overall stable market at approximately 1.9 million units Italy Passenger cars Decrease in demand expected in 2005 (approximately - 5% vs 2004), slightly recovering in 2006 Slight but steady recovery at 1.5% per year starting from 2007 (demand at approximately 2.3 million units in 2008) Light Commercial Vehicles Stable demand at approximately 215 k units Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 20

22 Current Manpower Utilization per Plant Mirafiori 71% 85% 85% >100% Melfi >100% >100% >100% >100% Cassino 91% 95% >100% >100% Pomigliano 95% >100% >100% >100% Termini Imerese 54% 89% 91% 80% Sevel Val di Sangro 100% >100% >100% >100% Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 21

23 Fiat Auto and Fiat Powertrain Technologies The Fiat Auto Development Plan goes alongside the Product Development Plan of Fiat Powertrain Technologies FPT integrates all Fiat Group expertise in the design of engines and transmissions. Some applications of excellence are already being manufactured: Gasoline FIRE engines family Multijet Diesel technology Robotized transmission Innovative applications are being developed, in particular: New v Turbo gasoline FIRE engine (fuel optimization and lower emissions) production planned at the Termoli plant from 2007 New 1.6 diesel 4-cylinder engine (fuel optimization and lower emissions) with production start-up from 2007 at the Pratola Serra plant M40 transmission for light commercial vehicles (new high torque six-speed transmission to replace PSA trasmissions) at Termoli from 2006 Under study: Multiair Technology with electronic valve control to optimize fuel consumption and to lower emissions (available from ) Small engine (two or three-cylinder) with low environmental impact (available from 2010) Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 22 Applications not yet announced

24 Compressed Natural Gas (CNG) Engines Fiat Auto Strategy Particular importance is given to CNG powered vehicles: Environmental friendly technology (CO 2 and NO x emissions reductions) Fiat Auto leading presence in the CNG market (50%+ market share in Europe in 2004), with the widest range of models (Punto, Multipla, Doblò) and light commercial vehicles (Punto Van, Doblò Cargo, Ducato) Additional investment programs in CNG technology: 1.2 FIRE engine on Fiat Panda (end of 2006), CO 2 target: less than 105 g/km (-35% vs current 1.2 gasoline engine) CNG application for new 1.4 FIRE Turbo engine Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 23

25 Plan The execution of the plan calls for: Profitability of the Fiat Group in line with stated objectives Financing and grants for R&D and innovation initiatives Extraordinary grants for specific programs (Mirafiori) FINANCIAL RESOURCES Competitiveness (costs) and Quality Flexibility (volumes and plant utilization) Productivity (stick to tack time) Right-sizing of business governance costs OPERATING CONDITIONS Shared objectives Dialogue and consultation with Trade Unions SUPPORT Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 24

26 Fiat Investments and Government Grants Total Fiat investments [ million] 22,415 Total government grants [ million] 643 of which, capital investment grants [ million] 594 of which interest subsidies [ million] 49 of which R&D and Innovation [ million] 8,847 of which R&D and Innovation [ million] 205 Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 25

27 Initiatives to be Funded Promptly examine new financing requests out of the State owned Cassa Depositi e Prestiti and make projects approved by the Italian Government s economic agency CIPE on July 29th, 2005 operational as soon as possible Support new R&D projects which will be submitted to MIUR (Ministry of Education, University and Research) and MPA (Ministry for Productive Activities) through subsidized loans and capital grants, and finalization of past years projects Within the framework of Sustainable Mobility Project, readily pass into law measures reastablishing incentives for the purchase of CNG vehicles (Law 403/97), of the new CNG Plan of the Ministry for the Environment, and of a new plan to replace existing coach park Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 26

28 Development Plan The execution of the plan calls for : Profitability of the Fiat Group in line with the stated objectives Financing and grants for R&D and innovation initiatives Extraordinary grants for specific programs (Mirafiori) FINANCIAL RESOURCES Competitiveness (costs) and Quality Flexibility (volumes and plant utilization) Productivity (stick to tack time) Right-sizing of business governance costs OPERATING CONDITIONS Shared objectives Dialogue and consultation with Trade Unions SUPPORT The implementation of the Plan will ensure continuity to the manufacturing activity in the plants in Italy. Fiat Group and Fiat Auto Development Plan - Palazzo Chigi August 3, 2005 Slide 27